13 Tips for Adding a Teen to Your Auto Insurance Policy

Your little baby is all grown up … and he/she wants your car keys.

Many parents dread allowing their teen to drive a car on his or her own. But if you’ve determined that you can’t, in fact, lock your teen in the house indefinitely, then you should probably consider making the appropriate preparations for their driving lives. This includes obtaining the necessary auto insurance for them.

But there are certain ways you can minimize the price tag of that new premium. With that in mind, here are 13 ways to reduce the cost of your teen’s auto insurance.

1. Compare policies. Don’t assume that your current auto insurer has the best rates for teen drivers. Get quotes from several car insurance providers and see which one has the lowest premiums.

1. Look into multi-policy discounts. On the other hand, many major insurance companies give discounts to policyholders who have more than one type of coverage with the carrier. If you have home, life, and other insurance policies through one provider, it may be cheaper to purchase your teen’s auto insurance policy from the same place.

1. Look into safety courses. Most auto insurers give adults a discount for taking a driver’s safety course. And many of them will do the same for teenagers who take similar classes — either in person, via DVD, or online.

1. Encourage good grades. Almost every auto insurer provides some sort of "good student" discount for young drivers (usually for As and Bs). Studies show that better educated drivers tend to be involved in fewer auto accidents.

1. Get a safe car. Make sure your teen is driving a vehicle with a solid crash-test rating and/or the latest in safety equipment and technology. The safer a car is, the lower the cost will be for its auto insurance premium.

1. Get an old car. Generally speaking, late model or older vehicles have lower auto insurance rates than new ones. So tell your teen to swallow his or her pride and get over not having a "brand new" ride.

1. Get a "low-target" car. Some cars are stolen more often than others, and their corresponding auto insurance rates reflect that. But the most-stolen vehicles may not be the flashiest or the most expensive; they’re usually popular because of the value of their individual parts.

1. Add your teen to your policy. Many times, putting a teenage son or daughter on an adult policy is more cost-effective than buying the teen his or her own coverage. It’s also wise to make the teen the primary driver on the vehicle in your household which is the least expensive to insure.

1. Raise deductibles. Keep in mind that deductibles can be manipulated to reduce the overall premium cost. Therefore, you may consider designating a $1,000 deductible for your teen rather than one closer to $500 or $250.

1. Forego non-required insurance. Most states only require liability insurance for teen drivers. In other words, you don’t have to purchase comprehensive or collision coverage for a teenager’s vehicle — especially if it is old and not worth much.

1. Look into college-related discounts. If your teen is enrolled at a college more than 100 miles away from your home and does not have a vehicle there, you may be eligible for a significant discount. Ask your insurance agent or company about this possibility.

1. Stress safe driving. Make sure your teen recognizes the link between a good driving record and low insurance costs. As illogical as it sounds, your teenager may embrace this reasoning better than the "stay safe" admonishments they’re accustomed to hearing from parents and authority figures.

1. Explain how traffic tickets impact insurance rates. Just as steering clear of accidents can keep insurance rates down, so can avoiding traffic citations. Make sure your teen understands the consequences of traffic tickets. Otherwise, enterprising teens who don’t want to get into trouble may choose to pay any tickets they get without telling you — which, of course, will boost your insurance rates.