Auto insurance for teens is generally expensive. On average, an 18-year-old motorist in the U.S. pays about three times more for auto insurance coverage than a 40-year-old motorist. Moreover, adding your teen driver to your auto insurance policy will likely increase your rates, says the Insurance Information Institute (III).
However, there are effective ways to potentially reduce the rates. Some common methods of reducing the cost of auto insurance are to eliminate optional coverage, increase deductibles, and decrease coverage limits. However, if you opt for these methods, your teenage driver may end being underinsured. You may end up spending more money if your teen is involved in an accident.
Relatively Low Minimum Auto Liability Coverage Limits Most states have set a minimum liability coverage limit. However, this minimum amount is usually inadequate. Imagine this, if your teen driver damages property or injures someone and the cost of the damage exceeds the policy's limit, you may have to pay the difference out of pocket, meaning you could potentially lose your assets, including your savings and home equity.
No Supplemental Coverage Some types of auto insurance coverage are optional. For instance, if your family vehicle is already paid off, you don't have to pay for collision coverage. However, what if your teen hits an object or another vehicle while driving your car? If you opted out of collision coverage, you would have to pay your vehicle's repair costs out-of-pocket.
Low Deductibles Higher deductibles typically mean lower premiums. However, if your teen is involved in an accident, you will have to pay the high deductible before the insurance kicks in and reimburses you up to the coverage limit.
The reason car insurance for teens is so expensive is that teens are more likely to engage in high-risk driving behaviors, says the Centers for Disease Control and Prevention (CDC). However, you can reduce the cost of insuring your teen without reducing your insurance coverage and thus exposing yourself to medical bills and high repair bills. Here is what you can do:
Cheap car insurance for teen drivers isn't always enough. If you're looking for a solid auto insurance policy that’s appropriate for your teen motorist, talk to the team at Tompkins Insurance Agencies. We can help.