Most parents probably start thinking about their kids getting behind the wheel once they hit double digits. It happens earlier for some parents – 14 in South Dakota – and later for others – 17 in New Jersey. Before your young adult can be let loose on the roads, you’ll need to find them auto insurance, even they only have a junior license. (Learner’s permits are usually covered under the parent’s insurance, but check with your provider to be sure.)
Finding car insurance for your teen is not for the faint of heart. Some parents consider leaving their children off of their policy, but this can have big consequences. If there is a problem and the insurance company finds out, the best case scenario is that you’ll owe back premiums, the worst case is that they will drop your coverage and leave you to deal with the cost of the accident.
Depending on location and state laws, insurance premiums can sometimes double or triple once a young driver is added, especially if they have their own car. “Calling your company first to see what the difference in your rate will be should be the first step.” says Neil Richardson of The Zebra, a comprehensive comparison website for car insurance. It will establish a baseline for your search.
Different states have different regulations, but one option can be to put your teen on their own policy. “If the rate for their own separate policy is less than the amount it will cost to add them to your policy then you will want to cover them separately. If the rate to add them is less than getting a separate policy then adding them is the best solution.” adds Richardson. Check with your state government to find out the rules.
The type of car can make a big difference. A sedan will cost less to insure than a sports car. In addition, If the value of the car is low enough, consider dropping the collision (damage to your car by accident) and comprehensive (damage to your car due to other means, like theft) coverage. Depending on the appraised value, yearly premium, and deductible, you may end up paying more to insure the car than the price to simply replace it.
Driver’s Education classes can serve a dual purpose and be worth the extra fee. “Our daughter took a class that included 6 hours of behind-the-wheel instruction so that she could get her permit and junior license early. That, combined with a good discount for good grades, reduced her insurance cost by 20%.” said Russ H. of Howell, NJ. Check with your company to see if they offer a Good Student Discount and the minimum grades are required.
Don’t forget to try the usual tricks to lower car insurance like bundling homeowners or renters insurance, looking for discounts with clubs or professional organizations, taking advantage of anti-theft devices, and low mileage discounts. It’s important to check for these every year, but especially important when facing the added cost of a teen driver. Always ask for any other discounts, usually the insurance company will help by suggesting anything that you might have missed.
Once you have the best quote possible from your company, a last step might be to shop around. Many car insurance companies have websites that offer quotes and others, like TheZebra.com will compare options for you. If you find a better price, you can either choose to change to a new company or see if your company will match or beat it. Keep in mind, no amount of insurance will calm your nerves the first time that you see your child drive off on their own.