What You Can Do Now to Save Money on Car Insurance for Young Drivers

Posted by admin | Posted in Car Insurance Minnesota | Posted on 24-05-2010

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If you are insuring a teen driver, you know that teen drivers are more expensive to insure than a older drivers. This is true even if the teenager has a perfect driving record. You’ll spend more to insure teens than almost any other driving group. This is because teen aged drivers are proved to be far worse than the average in every statistical loss category. Insurance companies are statistically aware , and thus charge teenaged drivers higher premiums.

Actuaries do risk calculation for insurance companies . They get get upset thinking about teen drivers, and it’s not for nothing . Their company must pay the claims against any of their customers . Insurance companies want the business, from young drivers, because the auto insurance business is very competitive. A young driver they can secure as a customer now may stay with the company for their whole life.

That can’t change the fact that however badly they want a lifetime revenue stream , their chances of paying on a claim because of young mr or miss are much greater. That means one thing to the software used to set the insurance rates; said rates have to be higher to offset the increased risk level .

Here are some easy ways to help find cheap auto insurance for your young driver .

Select the Proper Vehicle

This is very important . Cars are priced differently by insurance companies, because many characteristics affect the likelihood that you’ll be involved in an accident. Things that influence how your car is priced by insurers include engine size, theft probability, safety features and safety rating, and price. Ask your insurance agent what you can expect to pay for insurance before you purchase a vehicle . For example, a new BMW can cost around $5,000 a year to insure in California. On the other hand, an ‘88 Camry will cost about 75% less .

Keep deductibles high and coverage low –

Keeping deductibles highand coverages low works very well to make sure you’ll pay as little as possible . You do not want to file a claim for minor damage to your vehicle anyway. With nearlly all companies, submitting a claim will trigger a rate increase, so be careful about doing so. Set your deductibles as high as possible, typically about $1,000. Make them higher and you’ll pay less for your insurance.

Avoid monthly payments –

Pay your premiums either bi-annually or annually – Most insurance companies have discounts if you pay a whole year’s premium in advance. At the very least you should save the fees many charge when you pay monthly. Look into the possibility of getting a discount for having the premiums automatically deducted from your checking account.

Examine your coverages -

Make sure to keep your comprehensive and collision coverage low on your car if you can. If the vehicle is financed, the lender may have minimum coverages they’ll allow. That is another reason to drive a fairly cheap car. You or your teen can have low or even nonexistent collision coverage.

Be careful about taking your coverage too low on medical and liability, though. Healthcare costs are extremely high. A relatively minor injury could cost 30,000 – 50,000 in medical expenses. In addition, vehicles are extremely expensive to both purchase and repair . A modern small car, such as a Honda Civic can top $20,000 and many luxury cars can easily reach 4 times that. You could be staring at bankruptcy or a serious financial problem if your teen is involved in a wreck where someone is badly hurt and/or driving expensive vehicles.

Take advantage of all your available discounts –

Insurance companies offer discounts for having different kinds of insurance with them, For example if you get motorcycle insurance with a particular company, insuring your car with them will likely mean that you’ll pay less for both the motorcycle insurance and the car insurance than you would if you purchased either insurance policy from separate companies.

Compare rates among different companies –

This is a big one, Different companies view different risk factors differently. Also, different companies have different expense and business structures. That means no two companies will price cars the same . What’s more, insurers will set different premiums in every situation. For instance, if company A is cheaper than company B for a particular driver driving a particular car, in a particular city, that doesn’t mean they will automatically be less expensive for a different driver in a different set of circumstances.

Complete a safe / defensive driving course –

Insurance companies will grant discounts for teenagers that have completed defensive driving courses. Note that that does not mean you’ll pay lower rates because you spent the weekend at Skip Barbour or went through the Richard Petty Experience the last time you were in Vegas .

These strategies will save you money when getting cheap car insurance for a young driver. There is no excuse not to save money, if you know what to do.

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