Driving Insurance for Young Drivers

There are no bargains on driving insurance for young drivers.

Not surprisingly, young drivers stand-out as the highest risk group for auto insurance companies. Approximately eight out of ten newly licensed drivers tangle in a minor traffic accidents within the first year after licensing, and auto accidents remain the leading cause of death among young adults aged 19 to 25. Although most states and provinces have imposed severe restrictions on teen-age drivers, they remain at-risk because they lack experience and judgment. Consequently, driving insurance for young drivers costs up to four times more than similar coverage for experienced adults.

Save a little on driving insurance for young drivers.

The laws require that all drivers carry liability insurance—coverage for bodily injury and property damage. You can save considerably on your premiums if you insure your teen-ager just for liability. Of course, you take a calculated risk, because you trade protection of your vehicle for lower premiums. If your teen-ager drives the family vehicle and you are making monthly car payments to a lender, you will have to comply with the lender’s insurance requirements. Your premiums easily may double.

Most auto insurance companies offer some discounts on driving insurance for young drivers, reducing their premiums if they maintain good grades, and often cutting the payments if they drive just to and from school and work. Many companies will protect your rates by asking you to pay a little bit extra for “first accident forgiveness,” a provision in the policy which anticipates the likelihood of a young driver’s first fender-bender and protects you against an automatic increase for that first “learning experience.” Just as importantly, because your young driver will work with your insurance company for a very long time, you may want to arrange for “vanishing deductibles”—a provision that reduces your deductible for every six months your teen stays out of an accident.

The experts’ advice on paying for driving insurance for young drivers

Human nature dictates that we value that for which we must work. Several studies indicate that young drivers behave far more responsibly when they must pay for their own car insurance, because they understand just how much goes into keeping them on the road. Both insurance experts and developmental psychologists very strongly recommend that parents either make their teens pay for their own car insurance or reach an agreement to split insurance costs 50/50.