For a teenager, getting your driver's license is a step towards being independent. As a parent, it is stressful and worrisome time. Especially, when they find out how much their insurance premiums are going to increase!
It is no secret that teenage drivers are higher risks behind the wheel. In 2010, a third of teen deaths were motor vehicle related(1). The insurance companies recognize this and price the policies accordingly. Below are a few tips to help cushion that premium increase as well as increase your coverage in the case of an incident.
1. Educate Them: This is arguably the most important one when you have a new driver in the household. Teach them the best practices when driving. Have them pledge to not use their cellphone when driving. Make sure they don't have too many friends in the car which can lead to a distracted driver. These are just a few ways help protect your kids. There are even courses that insurance carriers will recognize and give a small discount for.
2. Good Student Discount: This is a popular discount that almost every carrier offers. If your children have a 3.0 or higher GPA, you will receive a discount on the vehicle they are assigned to.
3. The No-Text Pledge Discount: A few carriers offer this discount if your child signed a "No Texting While Driving" pledge.
4. Vehicle Assignment: Assign your child to one of your safer and cheaper vehicles. Insurance companies will rate accordingly, especially if those vehicles have built in safety features. It's important to note, you want to be honest with the insurance company about which vehicle your child is driving. If they are rated under the mini-van, but get in multiple accidents with the sports car, the insurance company might have some questions.
5. Accident Forgiveness: More and more companies are offering this coverage now. We always recommend it as an endorsement if it's not included on your policy, especially when you are bringing in a young driver. Teenage drivers make up less than 7% of drivers, however they are responsible for more than 20% of the accidents(2). This coverage will allow you a mulligan so your premiums won't go up at renewal.
6. Umbrella Policy: Auto repairs and medical bills are becoming more and more expensive. With teens causing a fifth of the accidents(2), it's smart to consider an umbrella policy to increase your liability limits. Depending on what your current liability limits are, you might have to increase them to qualify for an umbrella policy.
7. Increasing Deductibles: This is another way to save some money, but it's important to note that you will be taking on more of the costs if someone in your household is in an at fault accident.
(1) https://www.dosomething.org/us/facts/11-facts-about-teen-driving
(2) https://www.safetyinsurance.com/driversafety/tips_statistics.html
Fenix Risk Management is an independent insurance agency proudly serving families & businesses in Georgia, Alabama, North Carolina, South Carolina, Tennessee, and Florida.
Vik is an adviser at Fenix Risk Management.
Note: the opinions expressed in this blog are that of the author, not of any other individual or organization referenced.