3 Things To Know When Adding A Teen To Your Auto Insurance Policy

Many people know that adding a teenaged driver to an auto insurance policy can result in a significant increase in costs. Teen drivers are among the highest risk drivers, which is why it costs so much to insure them. However, many parents may be surprised when they get the quote for adding their teen, as the additional costs can be quite expensive. If you are ready to add a teen to your auto insurance policy, here are three things to know.

The Reason It Costs So Much

The first thing to understand is why insurance costs so much for teens. When insurance providers offer coverage to people, they base the rates on risk. People with low risks of causing accidents generally pay lower rates for insurance. As a result, they pay less because the insurance company has fewer risks involved. Teens cause high insurance rates because they cause the most accidents. Insurance companies protect themselves by charging high rates to people in high-risk categories.

Ways to Reduce the Costs

You can take a few steps to reduce the costs of insuring your teen. First, have your teen take a driving course. The course can teach them how to safely drive, and your insurance company might give you a discount for the completion of a course. Secondly, choose a car that is not worth a lot of money and have liability coverage only. Finally, limit the driving your teen does. If your teen does not drive much, they may qualify for a low-mileage discount. Your insurance agent can provide other tips if you ask.

Good Driving Habits Pay Off

The final thing to know is that your teen's auto insurance rates will not always be this high. If your teen develops good driving habits, they may avoid tickets and accidents. Over time, the teen's clean driving record will result in a decrease in premiums. Each year that your teen stays accident-free can help with the rates you pay. You can encourage your teen to drive safely to build a good record, and you can also hold them accountable for not using safe-driving habits.

While you can shop around for quotes, you may still end up paying more than you want. Teen drivers always cost more than other drivers, but the high costs will not last forever. If you are in need of auto insurance coverage, contact an auto insurance provider for more information.