Authored by Deborah Dera in Insurance
Published on 10-09-2009

Your 17 year old child is suddenly ready to drive. Now you have to add him to your insurance policy or find him insurance of his own. The problem? His age. The cost of car insurance for new drivers is astronomical, especially if they’re teen drivers. Statistics are against them when it comes to accidents and moving violations and car insurance companies view them as risks from the very start. So what can you do to minimize the cost of car insurance for your teen?

Understand the Statistics

As a parent you believe your child is perfect, can do no wrong, and will be the most responsible driver on the road. There’s no problem with that mindset but keep the following facts in mind as you look for car insurance:

• 16 & 17 years old drivers are involved in more motor vehicle crashes than any other age group
• New drivers are more likely to perish in a serious motor vehicle accident than drivers of any other age group
• Drivers between the ages of 15 and 20 have caused more than $40 billion dollars worth of auto accidents – including cost of cleanup, insurance payouts, and more
• In 2006, more than 30% of young teens killed in car accidents had been drinking and were over the legal drinking limit
• Teen accident rates increase as the number of passengers in the car increases

Pay for Driving School

Think raising a teenager is rough? Wait until you’re ready to teach him how to drive. Your best bet is to send your child to a behind-the-wheel driving school for his initial driving lessons. This is a great idea for a couple of reasons.

First, you won’t have to deal with the stress associated with teaching your child the most important details he needs to learn to prepare for his driving test. You won’t yell at each other while driving (causing a dangerous distraction) and your household will be less tense during the nerve-trying learning process.

The second benefit is that some insurance companies offer discounts to teen drivers who have taken a formal behind-the-wheel driving course. Insurance recognize that a formal driving education means your child is more likely to understand certain laws and driving regulations that the average driver takes for granted and, as such, may forget to “cover” during a home driving course.

Encourage Good Grades

The next thing you need to do is continue to encourage your child to get great grades in school. Many insurance companies recognize how hard teens have to work to get great grades and many offer “good student discounts” for those who remain on honor roll. These discounts are usually renewable every year your child remains in school full-time, including during his formative college years. You’ll have to send proof of his grades in order to get a discount, the percentage of which varies from company to company.

Don’t Buy a New Car

Considering the statistics noted above, buying a new car for your child should seem like a bit of a waste. If that’s not enough to discourage you, consider the cost. Most insurance companies charge high rates for teen drivers and if you purchase a brand new car you’ll be forced to carry comprehensive (for theft or vandalism) and collision (for crashes) on that car, especially if it’s leased or financed. The rates for those coverages, especially with a teen driver behind the wheel, are high enough to make your stomach turn.

Buy your teen a used car and let him get used to driving on his own without the fear of scratching up a brand new automobile. If he does well, consider helping him buy his first brand new car within a year or two. There’s really no reason to rush and your wallet will thank you for your patience.

Buying car insurance for 17 year olds doesn’t need to be a hassle and it doesn’t need to break the bank. Use as many methods possible to reduce the rate of coverage and you’ll all be much happier when your teen hits the road.

Source:

• Rocky Mountain Insurance Information Association