Ways To Lower Teen Car Insurance California Rates
Posted on: 11Feb,2016
In this day and age, car insurance and teenage drivers can be an expensive combination to pay for. According to the III (Insurance Information Institute) adding a teenage driver to your current auto insurance policy could cause up to a 50% increase in your premium rates. In fact, it could even double them. This is primarily attributed to the disproportionately higher rate of accident occurrence among teenage drivers. In the 15 to 19-year old age group, the leading cause of death is automobile accidents.
As a result, insurance companies are charging the highest rates for teenagers than any other demographic. So parents with teenagers who are about to become drivers have every right to be concerned about the impact that this is going to have on their auto insurance premium rates. Fortunately, there are a few things that can be done to help lower those rates once your teenage daughter or son has been added to your policy.
Why Teenagers are charged such High Premium Rates
Instead of judging teenagers as people, insurance companies tend to see them as future potential problems that they will have to deal with. When it comes to calculating premium rates, the greatest determinant factor is the amount of risk that the driver presents. According to the III, teenage drivers are generally less inexperienced, are involved in more accidents and drunk driving incidents, and are less responsible than older drivers. Since they do not have a home to pay for and a family to feed, their insurers are less eager to insure them. So they charge more to compensate for that.
Age discrimination also plays a part in the higher premium rates that are charged. Premium rates based on age is one of the most blatant forms of discrimination there is today. Car insurance companies use age as the sole criteria for pre-judging a teenage applicant when in reality, they should be basing those rates on the individual driver’s performance. So a teenager driver is penalized automatically from the very beginning. While it would be fairer to charge a flat rate that increases whenever there is a negative infraction, insurers just charge everyone more to cover any potential losses.
Tips for Lowering Your Teenager’s Rates
Taking all of the above into consideration, parents with soon-to-be-driving teenagers have every right to be concerned about the impact this is going to have on their auto insurance premium rates. Fortunately, there are several things you can do in order to lessen that impact on your policy rates. Consider the following:
Drop your collision and comprehensive coverage on any vehicles that have a low market value – you may be spending more on your premiums for an older vehicle than what your insurer would pay you if it got totaled in an accident.
Encourage your teens to get good grades in school – most insurance companies today offer good student discounts for those college and high school aged teens that can maintain a “B” average or better. Additionally, college students must take a minimum of 12 credits to qualify for the discount.
Increase the deductible amounts on your collision and comprehensive coverage – if you can afford the financial impact later should an accident occur, increasing your deductible on your collision and comprehensive coverage will significantly lower your rates. It will also make you think twice about filing a smaller claim that would jeopardize your claims-free discount.
Inquire about other discounts for teenage drivers – some insurance companies offer discounts for teens that have enrolled in a driver safety program. In most cases there will be a class they can enroll in, a driver-safety book they can read, or a DVD they can watch. Plus, there is a test that they will take to ensure they have passed the course.
Purchase a safe used vehicle for your teenager – you can save money on your premium rates by having your teen drive a safer vehicle. Before you purchase a vehicle for them, check the online safety ratings of different ones at the Insurance Institute for Highway Safety website.
On a closing note, these are the primary things to do. However, one thing you don’t want to do is lower your liability coverage.