Ways to Reduce Insurance Costs for Young Drivers

If you have a teen or less-experienced driver in the household, you already know auto insurance can cost more for drivers with limited driving experience. Higher rates can remain until drivers reach their mid-20s with some insurers, or even longer, but there are a few ways to reduce the cost of coverage.

Some strategies target young drivers specifically, while others may apply to other family members as well, reducing the overall cost of coverage.

Good student discounts

Many auto insurance providers offer additional discounts for students with good grades. Often, you just need your school transcripts or report card to earn extra savings.

Student away-from-home discount

Some insurers also offer a discount for students away at school, such as college students. Here, insurers expect you to keep the vehicle at home rather than have the student take the vehicle to school with them. This limits the amount of usage by the young driver and also limits risk for the insurer.

Defensive driving course discounts

Many insurers offer discounts for safe driving courses or defensive driving courses. Approved courses may vary from one insurer to the next, but this type of discount is becoming more common and can add to your savings.

Low-mileage discounts

Fewer miles can mean less risk of accidents. Consider carpooling, taking public transportation, or even riding a bicycle now and then. You will save on fuel costs, but you just might earn an extra discount on your auto insurance as well.

Telematics

Low-mileage or low-usage discounts remain common, but many insurers now offer additional discounts based on driving safety measurements. Telematics discounts base savings on driving habits, collecting driving information from an installed device or from a mobile phone. Telematics looks at more than just miles driven, instead measuring driving speed, hard braking or cornering, and time of day among other rating factors to determine a discount based on driving safety.

Bundle up to save more

Most insurers offer additional discounts for bundling, which refers to purchasing more than one type of insurance policy from the same insurer. For example, many people purchase both home and auto insurance policies through the same insurer, earning an extra discount on one or more policies. Reach out to your agent or broker to find out if your insurer offers any additional discounts for bundling.

Choose vehicles carefully

The vehicle your teen driver chooses can affect your auto insurance premiums. For example, expect to pay more if an inexperienced driver is driving a 600-horsepower sports car. A family sedan with high safety ratings may be a better choice.

Increase your deductibles

The deductible is the part of the claim you pay, so by choosing a larger deductible you can often reduce insurance premiums. In effect, you are choosing to accept a larger risk. While this money-saving strategy can work for some households, it is also important to be certain the deductible amount you choose fits your family budget.

Add your teen to your policy

Most times, adding a teen driver to your policy provides a more affordable option when compared with a teen driver purchasing their own policy.

Review your coverage options with your agent or broker

When the time arrives to insure the young drivers in your household, contact us to discuss the best coverage strategy and learn which discounts may be available for your household.

Have any questions? We can help.

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