Why a Young Driver Will Increase Your Insurance
September 29, 2015 / Sara Davis / Learn About Auto Insurance
Having your child turn 16 is an exciting time, and it is one that comes with new responsibilities and cares. Yet, there is also a great deal of additional worry as well. While you might not have to go to the grocery store as often, since you'll have a willing driver on hand, this also means your child will be out on the road. This can make many parents uneasy.
But all nervousness aside, there are duties that you ned to do in order to make sure your children are fully prepared to drive. One of those tasks is making sure they are insured as drivers. This needs to be done right away, as they will probably be operating the family vehicle on the big day. Once new drivers are behind he wheel, it is mandatory for them to be covered on insurance.
"There's no way around it - adding a teen to your auto insurance policy will raise rates."
Adding a driver to your insurance plan can be a costly adjustment and you need to know some of the factors that play a role in setting that price. If you have a child who is about to be added to your insurance policy, then consider the following:
- Your Insurance Will Go Up: There is really no way around this. Adding a teen to an insurance policy is going to increase your rates. According to DMV.org, this is because teens are higher-risk drivers. No matter what type of insurance policy you are taking out, greater risk means higher costs, so it is only natural new drivers would bring the cost up. But this doesn't mean you have to panic. Make a plan and set a budget so you can afford the new rate. Having insurance is worth the cost, and though it might seem daunting to be paying a new price, being covered will bring you peace of mind.
- Boys Are (Generally) More Expensive: Believe it or not, boys cause rates to increase more than girls do, according to Forbes. If you have boys you may find this a bit unfair, but that is the reality. It is important that you encourage them to drive safely and avoid getting any tickets or into any accidents in order for those costs to come down. But there are other ways to bring the rates down as well.
- Good Grades Can Make A Difference: Gender is not the only contributing factor when it comes to setting new insurance rates for your child - grades can play a role as well. Children who have better grades are often considered to be more responsible, which goes a long way when forming driving habits. According to NBC News, grades are one way that parents can negotiate prices with auto insurance companies. Another way is to have a device in the car that monitors speed and behavior, which many insurance companies consider to be advantageous, as your child is seemingly paying by the rules.
- Choose Your Vehicle Wisely: It is no secret that the type of car you drive affects insurance costs. This is as true for adults as it is for first-time drivers. If you are considering purchasing a new or used vehicle for your child, then take into account safety features and performance histories. Insurance companies are likely to give a lower rate for cars that are statistically safer and require less maintenance than those that don't.
- Look At Your Options: Just because you have a current insurance policy doesn't mean you can't seek out other options. Get several different quotes from various carriers about what a new family plan would cost you. Many people feel that once they have an insurance policy in place they are stuck with it, but this is not the case. You can often switch your policy at any time, and new carriers are typically welcome to have new business. If it is cheaper and makes more sense for you to start a new plan with your new driver, then by all means look into it.
Having a new driver in the family is a rewarding step, but safety and costs must always be considered. Make sure your child has the right kind of coverage and that your insurance costs aren't going to put you in a bind.