4 Ways To Save Money On Car Insurance For Teenagers

With hundreds of auto insurance companies offering a variety of coverage options, shopping for a policy for your teen is often a confusing ordeal. The amount you pay for car insurance for teenagers not only depends on your car, how they drive and where you live, but also on the type of coverage you buy. While factors beyond your control can increase your insurance bill, you can still reduce annual premiums in many ways. Here's how.

1. Increase the deductible.

Your deductible is the amount you agree to pay for a claim before your insurance company begins to pay. This amount can range from $100 to as much as $500. If you're willing to increase your deductible, you can significantly reduce your yearly premium. For example, if you raise your deductible from $100 to $500, you can reduce your collision cost by 15 to 30 percent. Of course, the amount you save depends on your insurance company, so be sure to check with your independent insurance agent.

2. Inquire about discounts.

You can also save money by taking advantage of various discounts. If you buy your auto and home insurance policies from the same company, you may qualify for a 5 to 15 percent discount. In addition, if you insure more than one car with the same company, you can save up to 15 percent. Also, some companies may offer an additional discount of up to 25 percent if your teenager's grade point average is a 3.0 or higher or if they've completed an approved driver's ed course.

You can also reduce your insurance rates by 5 to 10 percent if your car is equipped with security features, such as an alarm system or an electronic tracking device. In addition, with air bags and automatic seat belts, you may qualify for a discount of up to 30 percent. So, make sure that you inquire about these safety and security discounts. Check with your agent if you qualify for any discounts.

3. Maintain a good driving record.

Insurance companies often review your driving record for the past three to five years when determining your insurance premium. So, if your teenager maintains a good driving record with no claims, tickets or violations, you'll benefit from reduced rates.

4. Reconsider your coverage.

If you have an old car, consider dropping collision coverage. There comes a point when its book value is less than the cost of repairing your vehicle. Remember, your insurer will only pay the car's book value if it gets totaled. So, you're better off without collision coverage if your car is old. Check the National Automobile Dealers Association (NADA) Official Used Car Guide for the current value of your car.

You'll save money on your teen’s auto insurance policy if you keep these four tips in mind.