Why is the increase so large? Because teen driving statistics and accident rates are alarmingly high. Many different factors must be calculated and priced into the premium-setting equation by the insurance industry: health care expenses; property damage assessments; emergency services; lost wages; and continuing care for disabled victims.
However, if you are eligible, the following discounts may be available to help trim your auto insurance bill.
- Principal vs. Occasional Driver – Insurance companies want to identify a principal driver (the person who drives the car more than half the time) and occasional drivers for each insured vehicle. Occasional driver status may cost less. However, if a family has three cars and two parents, the teen may be seen as the principal driver of the third car. Another potential cost-saving option is to designate your teen as the principal driver of the oldest car.
- Driver’s Education – Some states require insurance companies to offer premium discounts of as much as 10% for teens who finish a driver’s education course. Thus, it may pay to ascertain if your state is one that offers this type of discount.
- Honor Roll Student – Investigate whether any insurance companies in your area offer a discount if your child is an honor roll student. In some states, a discount is available, so it may be worth checking.
- Nonresident Student – If your teen is a student living away at school without a car, he or she may qualify for a discount of 10% or more (in some states). To be eligible, the student must typically attend a school located at least 100 miles from the primary residence.