Cheap Car Insurance for High School Students

When your darling son or daughter starts driving, your auto insurance rates may rise even higher than your stress level. After years of playing taxi, relish the fact that the can kids drive themselves somewhere for a change. Don’t let skyrocketing auto insurance costs put a damper on your joy, either — try these tips to review your insurance coverage and make changes that will get you lower auto insurance rates.

Combine Coverage

Combining coverage is an easy way to keep insurance premiums low. Combine your teen’s car and any other family cars all on one insurance policy. Purchase homeowners, renters or any other required insurance from the same company to get a multi-policy discount. Also consider buying an umbrella policy — this coverage will make up the difference if your high school driver has an accident that exceeds the limits of your liability policy.

Car Choice

The car your teen drives is one of the factors that affects insurance rates. State Farm has a tool that evaluates different car models based on indexes for collision damage (comprehensive premiums), damage and theft (collision premiums), and liability insurance premiums. Each car receives letter grades according to how their premiums compare. For example, a Honda CRV scores an A, B and A. This means insurance companies charge significantly lower-than-standard premiums for comprehensive insurance, somewhat-lower-than-standard for collision, and significantly-lower-than-standard premiums for liability coverage. Another way to find cheap-to-insure cars is the Insurance Institute for Highway Safety’s list of top safety picks. Published each year, this list contains the top 60-or-so cars in various categories that have the best crash-test scores and consequently, the lowest insurance premiums.

Policy Changes and Discounts

Change your auto insurance deductibles to at least $1,000. This can lower rates substantially while also keeping you from submitting smaller claims that might cause you to lose your discounted rates from a claims-free history. Keep a little bit more cash in savings in case anyone has a traffic mishap.

Encourage your high school driver to get good grades to take advantage of the good student discount. Many insurance companies offer sizable discounts for kids who keep their grades at or above a “B” average. The discount also applies to any children in college, as long as they maintain 12 or more class units.

Ask your insurance company about other available discounts for your high school-age drivers. Some insurance companies offer programs teaching driver safety and will give you a discounted rate if your child participates. Other insurers may give discounts for third-party driver safety or defensive driving programs your child completes.

Drop Some Coverage

If you have older cars in the family, consider that they may not be worth much more than the insurance deductible. Even if the car is totaled, you will get less money from the insurance company than you will pay in premiums. If this describes your cars, it makes sense to drop comprehensive and collision insurance coverage.

Learner’s Permit

Some insurance companies will allow your teen to drive with her learner’s permit without being added onto your insurance. As long as you drive with her, she should be covered under your current policy, but call your insurance company to verify. Teens need all the driving experience they can get, so it might make sense to have them drive with a permit for a longer period — they become better, safer drivers and you save money.

Change Coverage Limits

Consider boosting your liability insurance limits to protect your family once your teen has been added to your insurance. This does not save money up front but could be the best thing you’ve ever done if your teen should cause an accident. The cost of increasing coverage limits may be much less than you realize — according to “The Insurance Maze: How You Can Save Money on Insurance…” by Kimberly Lankford, depending on your circumstances, changing liability limits from, say, 100/300/100 to 250/500/250, could cost you as little as $40 more per year.

How Important is Shopping Around?

Shopping around for auto insurance is a very important part of finding lower rates. The last five years or so have seen many changes in the way insurance companies assess risk, mostly because technology has provided improved methods for analyzing mass quantities of accident data. Insurers are able to fine-tune their quotes based on several characteristics of each driver. However, each insurer uses this complexity differently, and it is not uncommon to get quotes with a difference of $1,000 or more from different companies, using exactly the same driver profile.

Additionally, an insurance company that may be the cheapest for adult drivers might become the most expensive once a teen is added to the policy. Many people overpay for auto insurance each year because they do not make the time or have the desire to get new quotes. The quoting process has also improved with new technology, and many insurers provide online quotes in about 10 minutes at no charge. A 10-minute investment that could reward you with a three-or four-digit reduction in auto insurance costs sounds like a pretty safe bet, don’t you think?

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