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Wednesday, August 12, 2009

8 Teen Auto Insurance Mistakes

Do you have a teenager who drives, or one who will soon? Then you'll probably find out that adding a teen to your car insurance policy is sort of like balancing a valuable vase on a tiger's head: it'll probably end in an accident, and it'll probably be expensive. (Lesson number one: don't balance vases on tigers.)
The bad news: you have a teenager eager to get behind the wheel – and recent RateWatch data shows that adding a teen driver to your auto insurance policy costs over $2,000 a year on average.
The good news: auto insurance rates are coming down, so this is the perfect time to shop for policy savings. It can cost even less if you manage to…



Avoid some of these common mistakes






  1. Let your kid get bad grades: Were you aware that a "good student" discount could take as much as 10–15% off the price of your car insurance policy? You are now. Some parents pay their children to maintain a B average or better; this discount will have your children paying you instead.


  2. Buy a new car for your child:All of those safety features will get you auto insurance discounts, right? They might, but it costs more to insure a new car – for you and your teen. Find a safe, used car and save on car payments and insurance.


  3. Skip in-car driver training with your kid: Let the driving school do it. Right parents? I mean, that's why you pay them the money! Not so. No matter what your state legally requires, the more time you spend in the car teaching your teenager to drive, the better.


  4. Don't set a curfew: Part of raising a child is letting them take responsibility, so there's no reason to impose limits. Well, not exactly. Even if your city doesn't have a curfew for teen drivers, you should consider it. Statistics show that teenage driving deaths rise dramatically from 9 pm to 6 am. And if you remember your own youth, you'll agree that there's no good reason for teens to plan trips past 9–10 pm.


  5. Don't worry about packing the car with friends and distractions: The most common cause of teen accidents is driver distraction – either from a car full of friends or a cell phone that's blowing up. It gets even worse with loud music, texting and taking pictures with a cell phone.


  6. Speed, drink and don't wear your seatbelt: It amounts to telling your teen the law is optional. If your child gets a ticket, restrict access to the car. If it's something serious – like a DUI – take away their driving privileges.


  7. Lower your deductibles or keep them the same: A low deductible means your auto insurance company will pay more if there's an accident. Raise it, and you could knock a lot off your premium. Dropping collision coverage on your teen's car can also save money. Just remember that you'll have to pay more for repairs in both cases, so calculate your savings before making the switch.


  8. Let your teenager drive a small, old car: If you saw mistake number two and thought you could avoid it by getting your teen an older compact car, you're probably wrong. If it's not a safe car, you won't qualify for safety discounts.


  9. You said there were only eight mistakes!: Well, I lied. That's right; I said it: I lied. I'll let you in on a little secret: there are probably way more than nine, or even ten! But do you know the biggest one of all? (Drum roll, please.) Not shopping around to compare rates! Insurance.com data shows the average difference between the highest quote for adding a teen and the lowest quote is over $2,000 a year. Failing to compare auto insurance rates can be a very expensive mistake.