About Auto Insurance for Teenagers

By Kenneth Black

  • Overview

    About Auto Insurance for Teenagers
    It is no secret--teenage drivers represent greater risks to insurance companies and therefore, they demand higher premiums. However, while teenagers may be charged more for auto insurance, there are things that can be done help teens obtain better rates. Understanding what may be required before shopping for auto insurance may be the key to saving hundreds of dollars each year.
  • Risks

    The Rocky Mountain Insurance Information Agency reports accident rates for teen drivers tend to be very high. In effect, the risk of having an accident for those aged 16 to 19 years old is three times higher than the risk for those who are 65 to 69 years old. This is despite that reaction times are generally slower for the elderly group. For more information, see additional resources below.
    The risk of accidents among teens are much higher.
  • Considerations

    First, it is important for teenage drivers to understand auto insurance companies are not trying to punish them. Rather, they are simply making a business decision. Second, for many, staying on a learner's permit for a longer period of time may be a good idea. Insurance companies often require no additional coverage for those on these permits because they are so restrictive in nature.

  • Types

    Teens who have gotten a full driver's license have several options. One is to get an individual policy, which is likely to be expensive. Another alternative is to add the teen to the policy of his parents. This increases the total premium but may not be as expensive as if the teen were covered by an individual policy.
  • Potential

    Some insurance companies offer discounts for taking driver's education classes or having good grades (see Resources).
    Driver's education courses are a great way to lower premiums.
  • Warning

    Insurance rates often rise if a driver has an accident. That's why it's vital for teen drivers to practice good driving skills and remain alert when behind the wheel. Most insurance policies do not offer perks, such as accident forgiveness, for new drivers.
  • Time Frame

    While higher auto insurance premiums may hit young drivers fairly hard, the passage of time provides some relief. Turning 25 is a milestone that often involves a reduction in rates. Another milestone is getting married. This also tends to lower rates, especially for males.
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