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Teen Drivers: What’s the Deal?!

Written by Todd Clay. Posted in Research Last Updated: 01/29/2011

Why teen drivers have higher insurance premiums, tracking their driving activity, teaching them responsibility, and getting a lower rate when you add them to your policy.

Teen Driver: Behind the Wheel

Ever seen a scarier picture than this?

Nothing makes a parent cringe like the thought of their teen drivers.  Them getting behind the wheel of a vehicle, you not being there to control the situation – not to mention the huge jump your insurance premiums are about to take.

But, there are things that parents can do to keep their teen driver responsible and while the insurance increase is inevitable there are ways to make it more manageable.

Higher Rates for Teens

Statistics have shown that teen drivers have a higher chance of getting into an accident than any other group of drivers.  This is due to the lack of experience that teens have behind the wheel and teen drivers are more likely to engage in risky driving behavior – often to show off for friends.

Car insurance for teens is high for a reason. Because the likelihood of an accident with a teen driver is higher, the insurance companies charge a much higher premium to try and offset the cost of an accident if one were to happen.  The more premium that they can collect, the less money they will lose if the teen is in an accident.

Tracking Teen Drivers

Some insurance companies have started programs that allow parents to track a teens driving behavior.  This tracking is made possible by a tracking device that is attached to a teen driver’s vehicle, it can even be placed in such a way that the teen doesn’t know that it is there.  This device can track where a teen driver goes, any erratic and dangerous driver, and also if they go over the speed limit.

If a parent agrees to use a tracking device, the insurance company may decrease the premiums of the teen driver.  Of course, the availability of these programs are different from one insurance company to another, as is the cost of the device and any discounts that the insurance company would allow.

Making Teen Drivers Responsible

Pro-active parenting can go a long way in making sure that teen drivers act responsibly.  First, if you are planning on buying your teen their own car to drive, make them pay for at least half of the vehicle themselves.  Having to work and get the money to pay for something out of their own pocket makes anyone more appreciative of the item that they had to pay for.

With a teen, they are less likely to engage in behavior that could possibly damage or even destroy the vehicle that they had to buy.  It brings a whole different attitude than if you paid for the car and they did nothing to earn it.  It also makes them more likely that they will form the mindset that you will just buy them another one if they destroy the first one.

Make your teen driver pay for their own insurance also.  There is no unwritten parenting law that states a parent must pay for the insurance on their teen driver.  If a teen wants to enjoy the privilege of driving, they are going to have to learn sooner or later that they also have to pay to be able to have this privilege.  This is something that they should learn while they are living with you and you can help them.

Teen Driver on the Cheaper Car

With insurance the insurance coverage follows the vehicle, but insurance rates are based on both the vehicle that is being insured and the drivers on the policy.  With some insurance companies, they base the insurance rates on each vehicle according to which driver is driving it the most.  If your insurance company bases their rates this way, make sure that your teen driver is listed as driving the oldest and least expensive of the vehicles that you own – assuming your company will go for that. Your premium should be lower than it would be if the teen driver was assigned to the most expensive vehicle.

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Todd Clay

Todd Clay is a former insurance agent with the largest insurance company in the United States. He earned his Bachelor’s from the University of Texas. He's worked in several fields but has specialized in insurance, financial-related information, and technology. He blogs at Car Insurance Guidebook. Connect with Tood on Google+

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