At The Oaks Agency, One of the most common questions our clients ask us is how to save money with teen drivers. Teen drivers are five times more likely to have driving incidents than other drivers and pay three times the premium. And that is if they have a clean driving record! If your teen has a speeding ticket or accident then “forget about it!” Those rates are going through the ceiling.
When you start wondering if you need to take out a second mortgage on your home to pay for your teen’s auto insurance than call us!
Is it worth the cost of the insurance or should I just drop my child’s insurance?
The only time it is a good idea to drop a licensed driver’s insurance policy is if the driver surrenders her license back to the state (and this really is not a good idea). When you are licensed to drive you have a legal responsibility to be insured. This is why your local DMV is always asking for proof of insurance. To drop insurance is costly in at least two ways. If you get in an accident while uninsured than the damages and liability from that incident is your sole financial responsibility to pay (think wage garnishment). Second, when you try to get insurance in the future you will deal with rate increases that can be up to 100% increase due to a lapse in coverage. This is very costly.
Insurance is not about the lowest premium. It is about protecting your financial assets when calamity comes your way. When it comes to teen drivers there are a few tricks to help you save money.
- Consider putting your teen with a different insurance carrier. The rates between insurance carriers can be drastic – even saving you 50% from one quote to the next. Be mindful that many insurance carriers will not let your family split your auto insurance like this so it is important to make sure your current auto carrier is okay with finding a different insurance company for your teen before you even get started.
- Good grades equal savings. Your teen’s good grades equal savings with most auto insurance carriers. Send in your report cards and see the premiums drop.
- Consider purchasing an auto for your teen that you can easily replace. This translates into older autos. If you don’t have comprehensive and collision coverage on the auto then your premiums drop significantly. Letting your teen learn to drive in a vehicle that is easily replaced and not of high monetary value is a definite money saver. Do not skimp on liability coverage! This is not the place to save money.
- Finally, consider making your teen an occasional driver on a vehicle rather than the primary driver. This means not buying a vehicle for your teen but letting him use your vehicle on occasion.
It is easy to see why having a licensed professional help guide you in protecting your assets is so important. Call us at (314) 456-1149 or (314) 258-1107 and ask for Israel or Greg. We will be glad to help.