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As much as you’ve been waiting for this moment, you’ve been dreading it, too; your teen has passed the state driving test and is now an officially licensed driver. You no longer have to taxi him or her to school, to practice, or to friends’ houses.

But, your newfound convenience isn’t without concern. Of the many things you worry about with your young driver, including your child’s safety, high on the list is the cost of insuring your teen. So, let’s take a look at what goes into teen car insurance rates so you can better understand what may be awaiting you.

Do Teenage Drivers Increase Car Insurance Rates?

In most cases, yes. After all, you’re extending your coverage to another driver, and that typically costs more. And, not just any driver, but an inexperienced one.

Ask for Discounts for Your Teen Driver

Its true teen car insurance rates can be pricey, so be sure not to overlook opportunities to save. Your independent agent can help you better understand potential discounts that may be available to you. Here are a few common ways to save on teen car insurance, but these can vary by carrier:

  • Driver’s education: Knowledge is power so many insurance carriers will provide a discount if a newly licensed driver takes a driver’s education course.
  • Good student: Most insurance companies provide a discount for students who have at least a B average.
  • Electronic monitoring: Some insurance companies offer a discount if you adhere to safe driving habits as verified by an electronic monitoring device that plugs into your car’s diagnostic port.
  • Away at school without a car: If your young driver attends a boarding school or college more than 100 miles away, be sure to tell your insurance company. There is typically a large credit for this while still providing coverage when she’s home.

What if I Don’t Tell My Insurance Company About My Teen Driver?

The consequences of not informing your carrier of a new driver can vary by state and carrier. However, the end result may be financially devastating.

In the best case scenario, if your teen causes an accident, the insurance company may decide to cover the claim. However, it may also charge you for back premium, billing you for the extra cost of insuring your teen, dating back to when his license was first issued.

Even if the carrier does agree to cover the claim, it may only do so according to the minimum liability limits of your state. This scenario could leave you severely under-insured, and you may have to pay for some of the costs out of your own pocket.

In the worst case scenario, the carrier may deny the claim entirely, leaving you responsible for all damages. That includes damage to all vehicles and property involved bodily injury, pain-and-suffering and loss of income. Is this something you are willing to risk with an inexperienced driver?

Handing your keys over to a teenager may be terrifying, but it also provides freedom for you both. With careful consideration of your insurance needs, you can enjoy this time as the rite-of-passage it is.

Posted 2:58 PM

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