If you are considering purchasing separate car insurance as a teenager, you should be aware of the positives and negatives this option offers when compared to staying on your parents' plan. For the most part, there are relatively few benefits to obtaining your own insurance. However, if your goal is to set yourself up for benefits in the future, obtaining your own plan can be worth the added cost and hassle.
Con: Difficulty Obtaining Insurance
Teen drivers are statistically the most dangerous on the road. There are a number of factors that lead to this statistic, including the fact that teen drivers are inexperienced and more likely to be distracted. Because of these problems, car insurance companies like to tie a teen driver into a plan with his or her parents. The philosophy behind this step is simple: insurance companies feel drivers are more likely to be cautious if they are responsible to their parents. Further, car insurance companies cannot exist by insuring only risky drivers. Instead, they must have a balance of good drivers and risky drivers. It is easier for an insurance company to supply coverage to a teen if there is another, less risky driver also on the plan.
If you do succeed in finding a carrier to provide your car insurance, you should be aware of high costs. As a rule, car insurance companies raise costs and keep them high for any driver under the age of 25. Aside from this factor, you will be missing out on the advantages of grouping. Your parents are aware that paying for two cars to be insured on one plan is cheaper than paying for two plans. You will miss this benefit entirely, and you will end up paying substantially more to be on your own plan than you would simply reimbursing your parents.
Pro: Build Your Credit
One positive result of having your own car insurance at a young age is the ability to establish a payment history for yourself. Paying to insure your own car is a big financial step. It is something many individuals do not do until several years later in life. Starting early can help you build your credibility so you will be eligible for other opportunities at a young age. For example, you may find that you can obtain lower renter's insurance costs if you have been paying your own car insurance for years.
Pro: Reduce Future Costs
When you are on your parents' plan, your parents will benefit from your good driving record. The account as a whole will maintain a positive balance. After that, when you do eventually obtain your own insurance, you will still have no payment record and no history of credits versus debits to an insurance account. On the contrary, if you start young with your own insurance, you will establish a record early. You can then benefit from car insurance savings later in life that may at least partly offset the expense you took on as a teen.
How can I get my own auto insurance as a teenager?
If you wish to obtain your own auto insurance policy as a teenager, you will have to shop around for insurance companies willing to extend you a policy. Teen drivers are the costliest to insure, and many insurance companies would prefer to keep you on a plan with your parents. Research auto insurers that offer specific lines for new drivers. You can still expect to pay more than you would if you shared a plan with your parents. However, you can ask for discounts if you own your vehicle in your name, have a job or routinely get good grades in school.
Why is car insurance for teenagers so expensive?
Car insurance for teenagers is the most expensive type of auto insurance to secure. The expense comes from the fact that teen drivers make more claims than other groups of people. Insurance companies must charge more based on these statistics. The high charges are intended to make sure that the insurance company can afford anticipated claims from a teen driver. In order to reduce your insurance costs as a teen, stay on your parents' plans, look for good student discounts and take a safe driver class. Many insurance companies offer large discounts to teens who have gone to driving schools prior to getting their licenses.
Are there any ways to get cheap car insurance for teenagers?
There is no real option for cheap car insurance for teenagers. However, there are some discounts you may be able to take advantage of. First, it is best to group a teen driver's plan with his or her parents' plan. Then, ask about good student discounts. Most insurance companies will provide at least a small discount for students getting good grades in school since these individuals are likely to be safer drivers. Be sure to have a teenager take a safe or defensive driving class prior to getting a license. Turn in forms from these classes, such as those offered at the Department of Motor Vehicles, for a discount.
What is good student car insurance?
Good student car insurance offers a discount to teen drivers with good grades. Many insurance companies offer this discount. The driver simply submits copies of school records or report cards in order to receive the benefit. Insurance companies use demographic research to determine how much they should charge. They have discovered that students with good grades tend to have fewer claims than those not performing well in school. As a result, they reward those students with good grades with lower rates. The insurance system as a whole operates with this type of reward system. For example, individuals who are married or have children may also be eligible for discounts.