When it comes to auto insurance, rates increase typically when you have an at-fault accident, but the largest increase can be when you add a young driver to your policy.
Now days for many families, turning 16 is a rite of passage for getting a vehicle to drive. The cost of adding your son or daughter to your auto policy might invoke sticker shock. So, how do you make the premium as affordable as you can so you do not dash the exuberance of your offspring?
The first thing is to be a good role model when that teen is in the vehicle with you. Do not text and drive. Do not use the phone unless absolutely necessary. Obey all traffic signals. Do not run red lights and always drive defensively. Make sure the young driver understands the rules of the road and is not influenced by peers in the vehicle with her or him. This will hopefully result in good driving habits and lessen the possibility of accidents and driving violations that would cause the rates to sky rocket.
If your teen is a good driver, there are discounts available to reduce the rate charged. These are available by company, and may not be applicable to your company.
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The first discount is driver’s training credit and is applicable to drivers under 21 who complete an approved course that combines classroom instruction and behind-the-wheel training. The discount, applicable to the vehicle your teen is rated on, can be up to 15 percent of the liability and collision premiums. Again, that varies by company.
The second is the good student discount. This discount is generally applicable for a driver between the ages of 16 and 24 who maintains a “B” average or better. There is other criteria by company, such as in the top 20 percent of his/her class, or in the top 20 percent of all scores on an ACT or SAT exam. You would have to ask your company if this discount is applicable to you, but it is generally up to 20 percent off the premium for the coverages noted above.
The last is the teenSMART program which is endorsed by several companies and can result in a significant discount. This program is a six-hour computer education program that has shown to be effective in helping teen drivers learn to drive responsibly. The discount can be up to 20 percent of the premium of the vehicle the teen operates. Not many companies offer this discount. You can search this on the internet and contact an agent that represents one of the companies listed. Some of these discounts can be stacked.
After you get the sticker shock, shop around to get the best price. You may be surprised by how much you can save. You might even kick some of the savings back to your teen.
Dave Pushman is the former regional vice president of Geico in Macon and is now an independent insurance agent with Tidwell and Hilburn Insurance. He can be reached at email@example.com.