Why are auto insurance rates so high for my teen driver?

Traditionally, new drivers pay much higher rates than more experienced drivers on the road. There are discounts, however, for new teen drivers that might help you save some money on your auto insurance policy.

The first step towards getting low rates is to ensure that your teenage driver understands how their driving affects insurance rates. We will discuss all of these below- however feel free to download the following:
Download The Free Teen Driving Contract

Teen driving rates are typically high because teenagers do not have as much experience on the road. Car insurance companies reward drivers who have been driving for over 3 years as they are typically less likely to get into an accident. Your teen will most likely see a reduction in their car insurance rates after about 3 years from their licensing date if they maintain a clean driving record of course.

In the meantime, while they may not qualify for an Experienced Driver discount, most insurance companies also reward new drivers who qualify for a Good Student discount. For example, our partner company Travelers offers a Good Student discount which can typically save a new driver up to 10% on their auto insurance if they maintain an A-B average. The qualification requirements for this discount may vary from one car insurance company to the next.

Another more obvious way to save money as a parent of a teen driver is to talk with your teenager about the impact that traffic tickets and accidents can have on their car insurance. One speeding ticket or other traffic violation could spike their rates 20-40%. Talk with your teen driver about not only the safety issues involved with careless driving, but also the financial aspect. Some parents require their teenager to pay for their own car insurance- or a portion of it. If your child is working and can chip in- this is a great way to get them to understand the financial impact of their driving on their car insurance.

Avoiding accidents is not just common sense- it is money well saved. If your teen is deemed to be ‘at-fault’ for a car accident, they may be subject to a major increase in their car insurance rates. Not only this- but after a few years of never filing a claim, they may be eligible for a claims-free or accident free discount.
Shopping for Your Teen’s First Car?

When shopping for a first car for your teenager it is always wise to choose a well- rated, dependable car to ensure that your teen is safe on the road. A car that has a high National Safety Rating might also help you save some money on their car insurance. Also, some features offer additional discounts including:

* Auto Alarm Discount- Save 30% or More
* Anti-Lock Brakes Discount- Save 5% or More
* Air Bag Discount- Save 5% or More