Understanding Insurance Policies

Posted on: 28 July 2020

Whether you have a newly licensed teen driver in your home or you are setting up car insurance coverage for an older teen, two facts remain. You want to make sure your teen has the coverage he or she needs behind the wheel, and you don't want to overpay. Unfortunately, if you're making any of these common teen auto insurance mistakes, you could be leaving a lot of money on the table.

Overlooking the Make and Model

If you're in the process of shopping for a car for your teen, take a close look at safety features included with each make and model you explore. The car your teen ends up driving can have a major impact on insurance rates. Cars with more safety features (such as lane-departure alert and even rearview cameras) tend to be less expensive to insure than cars without these features. For your teen's first car, it can pay off to stick to something safe and sensible.

Putting Them on Their Own Policy

A lot of parents/guardians assume that adding their teen to an existing auto insurance policy will result in higher rates. And while it's true that your rates will likely increase when you add your teen, the reality is that you'll actually end up paying more if you open a separate car insurance policy for him or her.

Ignoring Money-Saving Discounts

Buying car insurance for a teen driver is expensive due to the statistically higher risk of accidents and claims that teen drivers have. Still, car insurance carriers are always offering opportunities for parents and teens to save on coverage, often in the form of special discounts. One common discount is known as a "good student" discount and usually applies to teens who are enrolled in either high school or some sort of college/university at least part-time and have an average "B" grade. Make sure you're researching and taking advantage of all the discounts available to you and your teen.

Failing to Choose a Smart Deductible

You can lower your monthly payment by increasing your deductible to the amount that you're comfortable with. If you're currently paying for a low deductible on your teen auto coverage, take a look at increasing it slightly to see how much you could save each month.

There's a lot to keep in mind when it comes to buying insurance for a teen driver. By avoiding these common mistakes, you can maximize your savings while making sure your teen driver is properly protected behind the wheel.

To learn more, contact a car insurance company.