Tips for Keeping Teen Driving Insurance Rates Low

Even though teens are considered the highest risk group of drivers according to Rand Corporation study OP189-2.1, there are still ways to keep teen driving insurance rates low. Teen driving insurance rates can often be reduced if the right auto insurance reduction techniques are used.

Teens who drive incur insurance charges that can sometimes be quite costly for either themselves, or the auto insurance policy holder they are registered under.. This article will discuss four ways that can help reduce teen driving insurance rates including 1) safety precautions, 2) vehicle characteristics, 3) insurance factors and 4) driving techniques.

Safety precautions

A November, 2008 State Farm Insurance media release claims automobile crashes are the leading cause of death among teens. (2) In light of this, it would make sense that safety precautions taken by the teen and/or within the car the teen drives can reduce teen driving insurance rates.

A number of safety precautions can be utilized to demonstrate safety to insurance providers and potentially lower the cost of teen driving insurance. Some of these methods include the following:

• AAA membership can lower insurance cost
• Establish safe driving record
• Document and report educational achievements
• Driver education classes
• Wear seat-belts

The reason an American Automobile Association (AAA) membership can lower insurance rates is because it can reduce costs for the insurer through the roadside assistance program and other assistance benefits of the membership. What's more, a Premium AAA membership for a second driver can be as low as around $35.50 according to AAA. If the cost of the membership is more than offset than a reduction in teen insurance then the membership ma be worth while.

Automobile characteristics

Driving a low cost, low risk automobile can lower teen driving insurance rates in two ways. 1) By making the insured vehicle value lower and 2) by reducing statistical probability of accident damage costs.

Several additional automobile characteristics are widely documented as having beneficial affects on driving insurance rates because they lower the cost of claims for insurers and reduce the probability of claims being filed with the insurance company. Below are a few automobile characteristics and/or techniques that may lower teen vehicle insurance rates.

• Avoid insuring expensive and sports/high power model vehicles
• In multi-vehicle families, insure the most 'teen friendly' model
• Install a car alarm and/or other safety features
• Anti-lock brakes, tire width, air-bags, vehicle collision test ratings

Insurance factors

1. Increase the insurance deductible

Increasing insurance deductibles is a common method of lowering insurance rates and it can lower rates. However, before increasing the deductible it may be wise to set aside the deductible amount into a auto maintenance account in case it is ever required.

2. Refer to State insurance requirements

Each U.S. State have jurisdiction over car insurance requirements within that State. For this reason there is variability in minimum insurance requirements among the States. By referencing State insurance requirements teen drives can better assess their insurance needs in relation to the lowest cost requirements.

For example, in a State where the teen's vehicle and/or most area vehicles are below or at par with the minimum State auto liability insurance requirements, it may make sense to insure the vehicle at the State minimum to avoid redundant cost and insurance. The following link lists minimum insurance requirements by State.

3. Insure teen as second driver

Insuring a teen as a second driver can be advantageous when the primary driver has a good driving and insurance profile because the vehicle is already insured under the first driver's policy and insurance profile. Moreover, the primary insurance holder's insurance profile allows the insurance company to charge less for the second driver (4) because 1) the driving time is statistically lower when two drivers are insured and 2) if the driving time for the teen is not reduced, the primary driver may be insured for another vehicle making the total insurance funds received from the insured similar to if only the teen had been insured under the second vehicle.

4. Miles driven

Reducing and/or accurately informing the insurance company of the amount of miles to be driven by the teen may affect insurance rates because of the correlation between driving time and insurance claim probability. Thus, if a teen is only going to be using the vehicle for a limited amount of driving be sure to document that with the insurer for any potential insurance reductions.

Driving techniques

It is rather obvious that avoiding accidents can be a good thing, but being aware of the fact accidents can result in insurance increases may serve as motivation to do so. Avoiding accidents can be achieved using a number of techniques, several of which are part of the training with driver's education courses and include the following:

• Defensive driving
• Staying under the speed limit
• Being aware at intersections
• Not talking on cell phones
• Staying alert and focused on the road

Thus, driver education has multiple benefits because it is not only looked upon favorably by insurance companies thereby potentially lowering teen vehicle insurance rates, but also reduces risk and educates the driver for life which can 1) lead to accident free or reduced driving, 2) life long insurance savings and 3) roads that are little less dangerous and a little safer.

Sources:
1. http://www.rand.org/pubs/occasional_papers/2007/RAND_OP189.pdf
2. http://www.statefarm.com/about/media/media_releases/unlicensed_teendrivers.asp
3. http://insurance.lovetoknow.com/Average_Cost_of_Car_Insurance_for_a_Teenager
4. http://www.doityourself.com/stry/teeninsurancewreck
5. http://www.compuquotes.com/five-ways-lower-your-auto-insurance-premium.html