Insuring Teenage Drivers

Insuring your teenage driver can be an expensive exercise. It is surprising how, suddenly, you find you have a teenage driver on your hands and need auto insurance coverage. You are probably worried about two things: safety and the cost of insurance.

Let’s look at safety first. Nowadays, in most states, teenage drivers have to go through a number of steps to get a full license. This is the Graduated Drivers License Program (GDL). It is usually a three stage program. First, the teenage driver is considered a supervised learner. At this stage, the new driver must wear a seat-belt, be alcohol free and accompanied by a licensed adult. This is followed by advancement to the unsupervised stage, but there are restrictions related to passengers and night driving. And, finally, comes driving with full privileges. This process takes six months to a year depending on the state.

Not all states require all three steps. However, there is evidence that teenagers are less likely to have accidents if they have gone through the full program and not violated any of the conditions. To me, this suggests that the program works best when parents actively support and enforce it. It also suggests that parents act in their teen’s interests and require the new driver to go through the three stages of the program even if the state does not make this mandatory.

So the GDL has reduced accident and accident related death rates among teenage drivers, which is comforting. However, teenagers are still the most likely group of drivers to have car accidents and this is reflected in the cost of auto insurance for young drivers. What can you do to lower that auto insurance cost?

Interestingly, even more care with driver education for your teenage driver can reduce the cost of insurance. One way to do this is through enrolling the teenager in a driving course that the insurer recognizes. Also, some insurance companies have their own safety materials and videos and may even give discounts to parents who are willing to supervise the use of these.

Education of another kind can see a lower insurance premium. Some insurance companies give discounts to teenage drivers with grade point averages of B or above. Insurance is all about risk, and the rational for this is that these relatively high achievers are assumed to be a lower risk in the long term.

While driver education measures do not impact the cost of insurance very much, increasing the deductibles on your car insurance will give you a clearly discernible cost reduction. What you need to remember is that should an accident occur, you have to carry more of the cost of repairs. Also, having increased your deductibles, you are probably not going to get any significant assistance from your insurance company in the event of minor metal to metal mishaps. So don’t report them and eliminate any excuse for the insurance company to increase your premium.

These sensible educational and fiscal measures will reduce the stress of having a teenage driver at the wheel.