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Ways to Cut Auto Insurance Cost for Teen Drivers

Your 16-year-old is about to get their license and you’re afraid of what that might do to our auto insurance rates. Most parents know that boys boost costs more than girls; by 92% compared to 67% respectively. You’re right to be worried; your auto insurance premiums are likely to skyrocket when your teenager starts driving. But a few key moves can help you cut costs significantly.

Encourage your teen driver to get good grades. Most insurers offer a big discount for young drivers who maintain at least a B average in high school or college.

Get a safe car. Having your child drive a safe car will help you sleep easier and keep your auto insurance rates under control. Check safety ratings at the Insurance Institute for Highway Safety.

Raise your comprehensive and collision deductibles to at least $1,000, which lowers your premiums and prevents you from filing small claims that could jeopardize a claims-free discount. Add some more money to your emergency fund so you’ll have the cash to pay the deductible if anyone in your family does have an accident.

Drop collision and comprehensive coverage entirely on older cars that are worth little more than the deductible. You may be paying more in premiums than you could ever get back from the insurer even if the car is totaled. Look up your car’s value on Kelly Blue Book.

Tell your insurer if your child goes away to college. If your child goes to school more than 100 miles away and doesn’t take a car, you can usually get a big break on your premiums but still have coverage when he or she comes home for vacation.

Ask about other discounts for teenage drivers. Some insurers offer discounts for driver-safety programs, cutting costs if the kids take a special defensive driving class in addition to Driver’s Education Classes. Ask your Independent Agent what your kid needs to do to qualify.

Multi-policy discounts. You’ll usually get a break on your auto insurance and your homeowners insurance if you keep both policies with the same company. You may get an additional discount if you include an umbrella policy, which provides extra liability coverage beyond your auto-insurance limits and can be particularly valuable when you have a teenage driver.

Shop around. Some insurers offer much better deals than others for teenage drivers, so it’s important to compare costs. The insurance company that offered the best rate for you and your spouse may have some of the highest rates when you add a teenager to the policy (and it’s almost always better to add the child to your policy rather than have them get their own policy).

You can get price quotes and personalized service from an Independent Insurance Agent like TCIA who work with many companies.

One thing you don’t want to do in an attempt to reduce your premiums is skimp on liability coverage. I would recommend liability limits of at least $250k per person, $500k per accident and $100k for property damage (or a policy with a “combined single limit” of $500k, when available, which doesn’t limit the coverage to $250k per person involved in the accident). Young drivers are more likely to have accidents, and lowering your liability limits could leave you on the hook for tens of thousands of dollars in expenses if your child does hit another car or injure someone

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