Is your teenager about to get a driving license? This worries so many parents because they fear they will have to pay excessive insurance costs, which is true. When a teenager is added onto an insurance policy, the rates rise by 20% at least. In some cases, the increase in rates is as much as 200%. Why is this so? Because with teenagers, the chances of an accident are three times greater.
What should you do in such a situation? You can try banning your child from driving your car or get them a bus pass but psychological experts say that when you do not let your child drive, most of them will rebel against you. This is going to hurt your relationship, which is not what you want. A much better solution is to let your child learn to drive, but ensure that you are signing up for a flexible and affordable policy. Here is what we suggest:
Let your child get a permit
There are many insurance providers who do not add a new driver onto the policy until they have a license. Instead of not allowing your child to drive, you can let him get his permit but keep it longer. With most insurance providers, this should not affect your rates. However, some do increase the rates even for this, so find out beforehand.
Now if your child drives with a permit and damages your car, you will be covered and will not have to pay excessive charges.
Your teenager can have a license, but not drive you car
Some insurance companies offer a feature called driver exclusion. Under this policy, your teenage child is not considered when your premiums are determined, but you have to agree that he is not going to drive your car. Should this happen, you may not get coverage, but at least you do not have to pay the high premiums associated.
There may be an extra fee or surcharge involved if you choose this option.
Maybe your child qualifies for a good student discount
Many teenage drivers are eligible for discounts and you should try to snag as many as you can. The most common of these is the good student discount. This money-saver can reduce premiums by 12%.