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Home » Jobs & Money » Home / Health / Auto » Saving On Auto Insurance For Teenage Drivers

Saving On Auto Insurance For Teenage Drivers

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Insuring a young driver on your automobile insurance can be very expensive if you don’t know a few of the tricks.

For those of you just finding out, this may cost you upwards of $150 – $200 per month even with standard big name carriers.

There are a few things you can do to minimize the cost of adding a young driver to your policy.

The number one mistake you can make is buying your young driver a new or nearly new car.

Not only is this going to cost you more in insurance than it will in a car payment, but the chances of this new vehicle going unblemished are low with a young driver behind the wheel.

The best way to keep your insurance cost down would be to purchase a safe, older, high-mileage vehicle and carry liability-only insurance.

Think about this… with an older vehicle that costs only $3,000, you can afford to carry liability-only auto insurance. This allows you to save on the insurance premiums you otherwise would be paying.

For example, it is very realistic for you to save over $100/mo by having your young driver on a vehicle with liability-only coverage. After two years, you have nearly saved enough in insurance premiums to replace the car should it be completely totaled.

Additionally, if your child is a good student and enrolled in high school or college, they will likely receive a good student discount on their auto insurance. This can be huge and usually only requires a copy of their report card!

Also, if your young driver has taken a defensive driving course, the certificate of completion will likely give them a defensive driver discount on their coverage as well

The one mistake you must not make is failing to carry sufficient liability limits on your automobile insurance. Remember you can and will be held liable for what your child does behind the wheel of your car. You may encounter a situation where you child was not the one at fault but you are still held responsible for the actions of the other passenger in your vehicle.

Ask your insurance provider what he/she recommends for liability limits. The state minimums are not sufficient!

In Tennessee, for example, the minimum coverage for property damage (damage you cause to other vehicles) is $25,000. It wouldn’t take much to have a multi-car accident on the interstate and surpass this limit.

Increasing your liability limits usually only costs a few extra dollars per month.

You may also want to ask your insurance agent about an umbrella policy. An umbrella is an excess liability policy that kicks in in the event that you exhaust your liability limits on your home or auto coverage. I believe my umbrella policy costs me about $25 per month.

Take a few moments to review your coverage with your insurance agent or carrier. It may save you some money and play an even bigger role if you have a serious liability issue down the road.

David
David

I’m a Financial Consultant and Personal Financial Representative with experience in financial analysis, strategic planning, presenting, & financial advisory services.

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Filed Under: Home / Health / Auto, Jobs & Money Tagged With: auto insurance, car buying

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LynnetteWith input from Financial Advisors, (a Tax Accountant and an Investment Manager), I share helpful tips regarding money and finances -- including debt relief, insurance, budgeting, and investing for retirement. My goal is to help you save more, spend less, and invest for the future by sharing honest, tried & true budgeting tips and tools. When I'm not saving for the future and helping others save for theirs, you can find me at the corner of Good News & Fun Times as publisher of The Fun Times Guide (32 fun & helpful websites).

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AndreaI have been a certified tightwad striving for financial freedom since I became pregnant with my first child -- and I decided to find a way to stay home with him full-time. I enjoy sharing my personal experiences in my journey back to financial health and planning for a future -- which will include sending 2 kids to college and early retirement.

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