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Have you been living in dread of your teenager’s sixteenth birthday? It’s a much-anticipated or much-feared day, depending on whether you’re the teenager or the parent. Many teens await their sixteenth birthdays with anticipation, looking forward to hitting the road. That driver’s license is a rite of passage. But when your teen driver gets that license, there’s something else they’re going to need (well, apart from a car). And that’s insurance.

You might have heard that insurance rates are often higher for teens. That’s because teens often like to toe the line of risky behavior and they have little experience driving, which makes insurance even more important. We’ll tell you what you need to know about insuring a teen driver so that you can get them the coverage they need – without breaking the bank.

When you’re insuring your teen driver, keep these things in mind:

  1. Add your teenager to your auto policy.

Instead of taking out a brand new policy for your teen, add them to yours. This will help keep the rates under control, especially if you have a good driving record and drive a safe, reliable car. You’ll also want to make sure to note which car the teen will be driving – the vehicle does have an impact on the insurance rates. As you can imagine, a safe, solid minivan will cost less to insure than a sports car.

  1. Up your deductible.

If you’re able to, you can raise your deductible, which is the amount you pay out of pocket before your insurance will step in to cover the rest. This will, in turn, lower your premium. Think about how much money you can access as a deductible and choose an amount that’s right for you.

  1. Quest for discounts.

Does your kiddo have good grades? If you’re the proud parent of a student with a good GPA, your insurance company will likely reward you with a discount. “Good students” are seen as being less of a risk. See, hitting the books and studying hard comes in handy sometimes!

If you have a slightly older teen driver who’s headed off to college, you might be able to get a discount if they’re going to school more than 100 miles away and they’re not bringing a vehicle with them. They won’t have so much time behind the wheel, and that’s where the discount kicks in.

These are just a couple possible discounts. Be sure to ask your agent about any others you might qualify for.

  1. Choose the vehicle carefully.

The car that your teen drives has an impact on their insurance rates, which we mentioned above. It might be better to go with a safe, reliable used car than to get them a new, shiny car. Yes, they might beg and beg for a new car that’s all fancy and such, but a nice, semi-indestructible used car might be better for your wallet in more ways than one. If you already have a safe car that you feel comfortable with your teen driving, all the better! Do it. The car should ideally be more than five years old and have four doors. Whatever car you end up getting for your teen to drive, make sure that it’s in good shape.

Other practical information: Only name one car for your teen to drive and don’t let them drive any other vehicles. The rule should be that they can only drive the car that they’re insured for. Keep the car in your name rather than switching it over to that of your teen driver.

  1. Send them to driving school.

You might meet with some very loud and stubborn resistance, but it’s a good idea to send your teen to driving school. Preferably one that’s approved by your insurance company – check with your agent to see if they have any suggestions. By having your young charge complete a course in driver’s ed you might get a discount on their rates.

  1. Pay for minor damages yourself.

“I swear, Mom and Dad, I didn’t see the mailbox there…It’s just a scratch, really…”

If there’s a minor snafu with the car, take care of the repair yourself rather than claiming it on your insurance. Any claim can make your rates go up, plus there’s your deductible to consider. If it’s something you can handle on your own, do.

Of course, we hope that you’ll never have to pay for damages of any kind, but just in case something happens…

  1. Consider a PLUP.

A what? A Personal Liability Umbrella Policy. Since that’s a bit of a mouthful, we’ll just call it a PLUP.

A PLUP provides an extra layer of coverage over top of the insurance that you already have. Your auto policy has a certain limit on it, but if an accident causes damages that exceed that limit, you’re left on your own to cover the rest. That’s where the PLUP comes in. The PLUP will step in where the auto policy stopped, covering the damages up to its limit.

Insuring your teen driver is something that you know you have to do. You might not look forward to paying the higher premium for your auto insurance, but you’ll be able to breathe easier knowing that your teen has coverage.

If you want to talk more about insuring your teen, please don’t hesitate to give us a call. If you’d like to get a free quote for your auto insurance, fill out our quote form and you’ll be on your way!

Contributor: Katherine Betts

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P.U.R.E. does not provide legal advice and does not have an attorney on staff.
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