Adding a youthful or new driver to your auto insurance policy is a big milestone — but it can also cause a noticeable increase in your premium. Young drivers have less experience behind the wheel, which statistically makes them a higher risk to insure. Fortunately, there are several smart ways families can help manage these costs.
1. Take Advantage of the Good Student Discount
Most carriers reward students who maintain good grades. If your teen has a GPA of 3.0 or higher, makes the honor roll, or is in the top percentage of their class, you may qualify for a good student discount. Make sure to provide your agent with report cards to confirm the discount with the insurance company, as well on future renewals or when asked.
2. Enroll in Driver Training
Certified driver education courses not only help your teen build safe driving habits, but they can also reduce insurance costs. Most insurers offer discounts for completing state-approved driver training programs. In Pennsylvania, they must have both 6 hours of behind-the-wheel driver training and 30 hours of online or classroom instruction. Completion certificates are provided and required to be presented to verify the discounts when they are added to the policy.
3. Reconsider Buying Them Their Own Vehicle
It may be tempting to buy your new driver their own car, but insuring a separate vehicle — especially one that requires collision and comprehensive coverage — can dramatically increase your premium. Placing your young driver on an older, family-owned vehicle with liability-only coverage can be much more affordable. As an example, the collision premium on a vehicle might only be $200 before the new driver is added, but can jump up to $800+ when a newly licensed driver is added to the same vehicle.
4. Check the Insurance Costs Before Car Shopping
Not all cars cost the same to insure. Sports cars, luxury vehicles, and cars with expensive repair costs often carry higher premiums. Before buying, get a quote from us so you understand the impact on your policy. It is better to know the insurance premium cost before you find out the hard way!
5. Consider Telematics Programs
Many companies offer telematics or “safe driving” programs that track driving behavior through a mobile app or device. Good driving habits can lead to additional discounts over time, and it helps teens stay accountable.
6. Keep Them on Your Policy
It’s almost always cheaper to keep your teen listed on your family policy rather than purchasing a separate policy for them. Bundling all drivers and vehicles together usually results in more discounts. Multi-Car, Multi-Policy, Longevity, Better Insurance Scores for the parents, etc. all play into an overall lower cost.
7. Raise Deductibles Where Appropriate
If you’re financially comfortable covering a higher deductible in the event of a claim, raising deductibles on collision and comprehensive coverages for all or some of your vehicles can lower premiums.
8. Permit or License?!
Most insurance companies automatically cover a youthful driver when they are on their permit, but they must be added to the policy as a rated driver when they get their actual license.
Bottom Line: While adding a youthful driver will increase your insurance costs, planning ahead and taking advantage of discounts and strategies can keep the added expense manageable. Before making any changes, talk to your agent at Looker Wolfe & Gephart to explore the best options for your family!