Cheap Insurance For Young Drivers
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• If a student leaves home to go to school more than 100 miles away, the parents can get a policy discount because the teen driver is not around as much to drive.
• Intermediate size cars, sedans and other “low profile” vehicles will carry lower premiums than high-performance cars, sport utility vehicles and sports cars. If a teenager wants to drive a sports car, you have to go to a company specializing in high-risk policies. The premium can be double the normal rates.
• It is usually cheaper to put a teenage driver on the parents’ policy than it is to buy him separate insurance. Even if the teenager has his own car, including his coverage on the family policy might help get the multi-car discount—most companies offer 10 to 30 percent.
• However, if a teenager has his own car and doesn’t qualify for a good student or driver education discount, it may be better for him to have his own policy—especially if he has a bad driving record.
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• You can cut the cost of policy premiums by raising the deductible amounts or dropping collision, fire and theft coverage for the cars the teenager drives. Many agents suggest a deductible of $500 for collision, $250 for theft and other damage and dropping towing and labor coverage. This approach is especially applicable if you give a kid an older car.
• If a teenage driver is in an accident which is not judged another driver’s fault or gets a traffic ticket, the cost of your policy will rise, often dramatically.
A higher deductibles reduce the insurance company’s exposure. Small losses which do not exceed the deductible do not require a claim settlement, and large losses which exceed the deductible result in a smaller settlement.
Deductibles usually range from $100 to $500 per claim Other deductibles, ranging from as low as $50 to high as $1,000, are commonly available for collision coverage. A caveat: If you finance your car, the finance company may not let you have a high deductible.
Cheap insurance for young drivers
To determine whether a deductible works for you, compare a year’s premiums without to a year’s premiums with a deductible plus that deductible. The deductible total will be higher. But, if you go through the year without making a claim, you get to keep the deductible amount.
In most cases, insurance companies will structure premiums to encourage high deductibles. For example the cost of collision coverage with a $500 deductible can be as much as 45 percent less than the cost wit $100 deductible. In this scenario, a $500 deductible will pay for itself in premium savings in as little three years. A $1,000 deductible can pay for itself just a little longer than that. But both of these scenarios assume you don’t make any claims during that period.
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