by Trevor Juntunen

Created on: August 16, 2009

Rates for teenage drivers are high because they do not have the same amount of experience behind the wheel. Many insurance companies will not run insurance scores, based on credit history, for drivers less than 19 years of age, causing them to be placed in the highest rated category. They do not own homes and normally not more than one car, so they do not qualify for these associated discounts. However, there are several things you can do to keep the rates low for your teenage driver.

The simplest way to have lower rates is to have them listed on the policy with their parents instead of having their own insurance policy. By doing this, the teenager benefits from their parent's insurance score, base rates for their age, group discount and possible multi-policy and multi-vehicle discounts. If you have more drivers than vehicles on the policy, you can place the young driver on the same car as an adult which can also provide more savings.

Having an older car that does not require full coverage would also help. Statistically, younger drivers have poorer driving records. This results in their age group having higher costs for comprehensive and collision coverage. When deciding which vehicle to let them use as their primary vehicle, look to the older car where the value might not warrant having full coverage. Or if you are out car shopping for your teenager, look at buying a used car versus a new one.

Maintaining a high grade point average can also qualify for a discount with some auto insurers. Normally this grade point average is a 3.0 or better. The correlation is that more responsible students make for better drivers. A driver's training course may also qualify for an additional savings.

If your young driver is going away to college without a car, inform your insurance agent. Many companies have an endorsement for a student away from home. This allows you to have the young driver listed on the policy, but reduces the cost since they cannot use the vehicle while they are away. Under state law you may still be responsible for your child while they are away at school. In cases like this involving no fault coverage, the young driver may still be able to collect medical benefits under the parent's policy, if injured in a car accident.

I have seen some articles recommend not listing a teenage driver on the policy. This could be viewed by an insurance company as a misrepresentation and may cause your insurance coverage to be void if there is a claim. When asked about other drivers in the household, be honest. If there were to be an accident, it would cost you a lot more out of pocket than having paid for the proper insurance coverage in the first place.

My perspective on personal auto insurance comes from working as a Michigan insurance agent. Insurance law does vary by state.

Learn more about this author, Trevor Juntunen.
Click here to send this author comments or questions.