How to Get Discounts on Your Teenager’s Auto Insurance

by Alexa Mason · 4 comments

You just added your teenage son or daughter to your auto insurance policy. You get the new bill a month later  — and your jaw drops when you see the increase in premium. Sound familiar?

Adding a young driver to your auto insurance policy can cost a whole lot. While many factors are used to determine your rate, your premium will certainly increase substantially. And the premium will be even higher if you insure your child on their own separate policy.

My experience as an insurance agent has taught me that most parents aren’t financially prepared for the increase in premium that comes with adding a young driver. Here’s what you need to know.

Why It Costs So Much

With no driving experience under their belts, young drivers are seen as high risk by insurance companies. This, coupled with the fact that they tend to be less responsible than older drivers, causes insurance companies to charge more.

How to Keep the Cost Down

In general, drivers under the age of 25 are considered young drivers and will cause your premium to spike when added to your auto insurance policy. However, there are discounts offered by various insurance companies that can help you keep the cost manageable.

Here are a few discounts that may apply to young drivers:

Good Student Discount: If your child maintains good grades (usually a GPA of at least 3.0), they’ll be eligible for the this money-saving discount.

Away at School Discount: This discount generally applies to college students who A. are under the age of 25, B. live at a campus more than 100 miles from home, and C. don’t take a vehicle with them.

Driver Training Discount: If offered, drivers under the age of 21 who have taken a driver training course will be eligible for this discount.

The car which your child is assigned on your auto policy will also affect your insurance premium. It’s best to ask your agent’s advice about driver assignments.

*Please note: Each insurance company has its own sets of underwriting guidelines. The above discounts are general regulations, but will vary by company.

If you’re on a tight budget and will soon be adding a young driver to your auto policy, you may want to think ahead and start putting some cash aside. And you should always check with your insurance company on what discounts are available.

Have you taken advantage of any auto insurance discounts for your teenage driver?

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{ 4 comments… read them below or add one }

Anne Short November 13, 2013 at 2:05 pm

Allied to driver vehicle assignment there is the question of operator status; occasional operator or primary operator.
If an additional ‘teen vehicle’ is not coming onto the policy (where the teen would be primary operator of) then some insurers may require that the teenager be designated as a primary operator of one existing car on the policy. If there are two existing cars, some insurers may designate the most expensive vehicle by default, regardless of use.

So, while adding a teen to a parent’s policy is generally an expensive proposition, insurers do indeed handle things differently. Notwithstanding, teenage coverage may be considered a ‘game changer’. For this reason, smart parents might take the opportunity to shop for an entirely new family policy. Base rate variations allow for some of the added expense to be absorbed by switching carrier at the time the teen comes onto the policy. Shop quotes anew for the family policy.

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Kostas November 14, 2013 at 11:46 am

Good bit of information you offered, Anne. Not sure I agree with the concept of the teen by default being named the driver of the most expensive vehicle. Sounds like it would be best to have their own vehicle prior to being added on. I knew adding on a teenager driver was costly it’s good to know that there are some discount available.

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Grinch November 14, 2013 at 2:03 pm

I ordered several information packages and software from our insurance company specifically written for teenage drivers and went over it with both my kids. We called our insurance company when our daughter went away to college last year without a vehicle. It dropped our rates while she was in school in the dorm. This year, we let her drive the truck to school (2 hours away). When we called the insurance company this time, our rates were raised substantially (teenager living in a college town). We also cancelled all of the extra coverage such as collision on the 22 year old Chevy. If she wrecks the truck, she’s back to riding a bicycle until she graduates and she knows this.

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property marbella November 15, 2013 at 8:17 am

A good system is one where young people pay more in insurance premiums. They are in bigger traffic accidents than older people. Of course you should check if there are discounts for well-behaved youngsters.

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