April 17, 2010

4 Tips To Teach Teens About Auto Insurance Quotes

It’s probably safe to say, a universal milestone in every teenager’s life is learning how to drive and getting a driver’s license. Oftentimes, passing the driving test is the easy part when compared to what comes next; calling around for auto insurance quotes and selecting suitable coverage. Below are four tips on how to approach the four major areas of teen auto insurance-premiums, deductibles, type of coverage (liability or full coverage), and discounts.

Auto insurance premiums are your out-of-pocket costs. Typically, auto insurance premiums are recalculated every six months and are billed on a monthly basis or, at a discounted rate, every six months. The key to premiums is not to get tripped up by them. Absolutely shop around for the best auto insurance quote, but be careful not to sacrifice sufficient coverage for a lower premium. Auto insurance premium costs are directly dependent on the amount of your deductible and the type of coverage selected. The deductible is the amount you pay out-of-pocket when your vehicle has been damaged by a collision or vandalism, or involved in a theft. Your car insurance deductible-usually ranging from $250 to $1,500-must be satisfied before your insurance company pays anything; the higher the deductible, the lower your auto insurance premium will be.

The key to deductibles is to choose an amount you can afford. Do not choose a $1,500 deductible because your monthly premium is lower. If you can’t afford the extra $30 to $40 a month for a lower deductible, you will not be able to afford a $1,500 deductible to fix or replace your vehicle. In addition to selecting a deductible amount, you also need to select the type of coverage you want-liability or full coverage. Essentially, liability covers damages caused to other people and their property; full coverage is an add-on to liability-comprehensive and collision. If you are financing a vehicle, you are required to have both; and do keep in mind that each state sets the minimum liability coverage allowed in order to be legally insured. All things considered, the key to electing a type of coverage is – if your vehicle is not a lemon – it’s probably best to elect what is known as full coverage.

The key to discounts is availability and eligibility. Discounts range from multi-car/line discounts, which are offered when more than one vehicle/insurance plan in the same household is insured, to driver training discounts, usually offered as a result of driver’s education courses. There are also good student discounts, which are offered based on grade-point averages. Teen auto insurance can seem overwhelming-from premiums and discounts to type of coverage and deductibles-but keeping these four tips in mind should simplify the process.