While most teens are excited about getting their drivers’ licenses, the cost of insurance may cause sticker shock for mom and dad. This is especially true for parents with a history of accidents or moving violations.
Fortunately, you can lower the cost of auto insurance for teens by taking advantage of a variety of discounts — even if your own record isn't spotless. Here are some of the most common discounts insurers offer for younger drivers.
Defensive Driving Discounts
Successfully completing a defensive driving course can reduce the costs of insurance by 5 to 10% for new drivers. Depending on the insurance company, those savings could add up to $600! Here are the average three-year savings you can expect from major insurers when you take an Aceable defensive driving course:
Geico: $400
State Farm: $600
Allstate: $300-600
Travelers: $320
Nationwide: $200
Worth noting: Defensive driving courses are available to drivers of any age and also help remove points on a license and avoid premium spikes after a moving violation. Every state is a little different, however, so be sure to check with your local DMV on the specific benefits of defensive driving in your area.
Distant Driver Discounts
If your son or daughter is heading off to college, you may qualify for a distant driver discount. Also known as a distant student discount, many insurers will cut your insurance costs while your child lives on campus. While criteria may vary according to the insurer, in most cases the student must attend a school 100 miles from home. Generally, eligible students are under age 23.
You may also consider temporarily removing your child from your auto insurance policy. In this scenario, you exclude your child from the policy completely during the school year and add them back during the summer. This can save you up to $2,500 per year, but keep in mind your teen can’t drive again until you add them back to the policy.
University, Alumni, and Military Discounts
Many insurers offer discounts from college alumni organizations, sororities, fraternities, and honor societies. Check your membership materials for information, or ask your insurer directly.
Likewise, many insurance companies offer special discounts to those who defend our country. If your child has enlisted, ask about their eligibility. If your child is currently deployed, notify the insurance company. Rates should decrease when an active-duty soldier is not currently driving a private vehicle.
Pro Tip: Aceable offers a military discount on driver's education courses, too!
Merit Discounts
Most insurance companies offer "good student" discounts for good grades. Many insurers also offer apps that track driver activity, including hard braking and cell phone use. As a bonus, knowing that their driving is being monitored by an app may be the incentive your teen needs to stay safe on the road.
Compare Prices for the Best Deals
While every parent wants the best insurance deal for their teen driver, it pays to shop around. When investigating insurance options, make sure you are comparing apples to apples. That is, all coverage options should be the same on any policy you compare. This will protect you from sacrificing your current level of coverage for a lower price. Ask for every available discount, and make your decision based on the best overall outcome for your family.