Adding Your New Teen Driver To Your Insurance Policy? 3 Mistakes To Avoid

Most teens are incredibly excited on the day they receive their driver's license. Unfortunately, parents are not as excited for a few reasons. Not only will your teen be able to drive without your supervision, but you will also experience some financial changes that can be overwhelming. On average, adding a new teen driver to your auto insurance policy can increase premium rates by 78 percent. Because it is not only beneficial but also legally required, paying these higher rates is essential for insuring your new driver. Thankfully, there are options for saving some money on insurance premiums. Here are a few mistakes to avoid when adding your new teen driver to your auto insurance policy.

Not Considering a Separate Policy for Your Teen

Most parents will simply ask that their new teen driver is added to their existing policy. However, buying a completely separate policy for your teen may be a better option.

Premium rates may be less if your auto insurance company creates a policy just for your teen driver. Another benefit of having a separate policy is that you and your auto insurance rates will be protected if your teen gets a ticket or is involved in an accident. A separate policy can also help your teen establish themselves so they can get their own plan when they move out of the home.

On the other hand, there are benefits of adding your teen and their vehicle to your own policy. For example, many auto insurance companies do offer discounted rates for multiple drivers and multiple vehicles.

Of course, you will need to weigh out the pros and cons for each to determine which is the right solution for you.

Forgetting About Discounts

In addition to multi-driver or multi-vehicle discounts, your auto insurance company may offer other programs that can help reduce the costs of the higher premium rates.

If you are not already bundling your insurance policies, consider asking if you will receive discounts on the auto insurance rates by purchasing homeowners or renters and life insurance from the same company.

Some insurance companies also offer special discounts specifically designed for new teen drivers. If your teen gets good grades and is able to maintain these grades throughout high school and college, the insurance company may offer a discount.

Finally, if your teen enrolls in an additional driving class, such as a defensive driving or safe-driving course even after finishing driver's education, they may qualify for a discount.

Buying the Wrong Vehicle

Whether you are providing your teen with a vehicle you already own or you are buying a new/used vehicle solely for their needs, the wrong vehicle can increase insurance rates even more.

Safety is one of the most important factors to consider when providing your teen with a vehicle to drive. Make sure the vehicle has an anti-lock braking system, power steering, and Bluetooth technology. Other safety features to consider, which are found on newer vehicles, include blind-spot monitoring, backup cameras, front/side sensors, and collision warnings, and adaptive cruise control.

Avoid buying a high-end luxury automobile for your teen, though, even if you feel it is a good vehicle loaded with safety features. The higher value of these high-end luxury vehicles will only be more expensive to insure.

Sports cars, which can increase your teen's risk of speeding, and electric vehicles, which are more efficient but more expensive, are both more expensive to insure, so they should be avoided.

Auto insurance is important for your new teen driver, but you do not have to experience emotional and financial distress over higher premium rates. This guide will help you choose the most affordable way to insure your new teen driver.

For more information, contact an insurance agency like Bear River Insurance.