May 5, 2011

Teenage Drivers And Their Effect On Your Premium Rates

If you are the parent of young drivers your children will affect your automobile coverage. It is a fact of life. Teenage drivers will make your insurance premiums go up, and there isn't much you can do about it. However, there are certain things that can affect exactly how much your premiums will go up. Before you add a young driver to you insurance plan you should be aware of how your child will affect your rates. The following article will discuss three simple ways to lower your child's insurance rates.

For an automobile insurance company, a teenage driver represents a serious liability. As a rule, teenage drivers are the least experienced drivers on the road. Additionally, teenagers are known to be easily distracted and impulsive. While this is obviously not true for all teenagers, most insurance companies tend to judge teens by the company they keep, especially when it comes to automobile coverage.

Because teens represent a huge risk in the eyes of your automobile insurance company, your insurance premiums will likely skyrocket when you add a teen driver to your family auto insurance plan. With that said, there are steps that you and your teen can take to minimize the financial effect of teen drivers on insurance premiums.

The first way families with teen drivers can lower their premiums is to purchase a plan that rewards good grades. Many insurance companies reward honor-roll students with lower insurance premiums. Insurance companies believe that smart children are more responsible children, and therefore believe that good grades will transfer to good driving. If your child gets good grades you may be able to lower your family's insurance premiums.

Even if your child is not an honor-roll student, you should be able to lower your insurance premiums by having your child complete a driver education course. Many states mandate these courses by law, but in states that do not require drivers-ed, families can lower their premium by enrolling teens in a drivers-ed class.

The number of cars in your plan will also affect your rate. You can purchase additional driver coverage per car, or per plan. If you own a very expensive car, and add a teenage driver to your overall coverage, than your rates will go up significantly more than if you only add your new driver to one inexpensive car.

Obviously there are a lot of factors that affect how your automobile insurance company views your teen driver. Good grades and drivers ed are the best ways for your child to lower his or her insurance premiums. Talk with your child and your insurance agent to work out the automobile coverage plan that is best for you.