How Will my Teenage Driver Affect my Car Insurance

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How Will my Teenage Driver Affect my Car Insurance

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It's was an exciting day for my fifteen year old son, as he just finished the driver's training classroom, passed his permit test, and was ready for his first driving lesson.

From the back seat on the ride home, my wife reminded me of a little something I had completely forgotten about.

"Do we need to call our insurance company?"

Young males are the highest risk category for having an accident, so I wasn't looking forward to seeing what having my son become a driver would do to our insurance rates. But, I knew it needed to be done so we called up our agent and had him gently tell us the damage.

What our insurance company told us was much better than what I thought I'd hear:

No Insurance Change, Yet: Until he gets a driver's license, there is no change required to our insurance. The view of our insurance company is that while he only has a permit, a licensed driver MUST be in the front passenger seat which offsets the risk of the new driver. I'm told this varies by insurance company, so if you have a new driver you will want to call your agent to verify how they handle this situation.

Good Student Discount: If our son makes the B honor roll or better, we get a 25% discount on the insurance increase due to him being listed as a driver of our vehicles. He got straight As his Freshman year, and this is just one more reason to keep those grades up.

Safe Driver Course Discount: Our insurance company has a safe driver course that our son can take online. It only takes a couple of hours, and there's a short quiz afterwards. If he passes, we get another 10% off the insurance increase we would incur when he gets his license.

If we add them together, that's a 35% potential discount.

Our insurance will increase about $800 per year when he gets his license. If we can get the full discount, that would knock it down to $520 per year, or an increase of $43 per month. 

While having our son behind the wheel will hit our pocketbook, it's not as bad as we thought. By investigating now, we have almost a full year to plan, save, and alter our budget to handle the increased monthly expense.

Does your insurance company offer any discounts for teen drivers? How much did it save you?

Related Links:

Do Kids Worry About Price?

What Age Should Kids Get a Cell Phone?

Taking Care of Delayed Expenses

Travis Pizel, debt management plan customer with leading provider of debt relief, CareOne Services, Inc. Travis Pizel

Travis is a contributing writer for the A Straight Talk on Debt blog. He is also a very active member of the CareOne community forums. Travis is currently enrolled in a CareOne Debt Management Plan (DMP). Travis candidly shares his personal journey to pay off his debt and the tips he's learned along the way. As a father and husband he provides a unique perspective on balancing debt, finances, and family in Minnesota. You can also read more from Travis on the Enemy of Debt blog, where he is a featured blogger. Compensated Blogger for CareOne Debt Relief Services.

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  • More proof that the cost of living is higher in Canada! I just made that same phone call yesterday  to our auto insurance company (quite a coincidence!) just after our second daughter passed her road test. Our insurance is going to increase by $55.71 per month. This is for a young female, so I'm surprised that our insurance will be higher than yours - for a young male. Perhaps we need to do some shopping around.

  • @Prudence - shopping around never hurts for sure....which reminds me, it's probably about time to do that again.  I'm always looking for cheaper rates - but to be honest, we've been with our current car insurance company for YEARS.  They're not the absolute cheapest....but they are competitive and they give us a loyalty discount for being with them for so long.  We once almost switched to a discount insurance company.....but then I was in an accident who used that same company and they were a *NIGHTMARE* to deal with because they didn't have any physical agents in the area.  There's something to be said for being able to walk into their office and talk to someone.  :)

  • Ha when my son got his license our insurance went up $112 a month for the first year!!!!!!! I live in NC.

  • @Wehiggins - that's a pretty steep increase!  Once our son gets a job, he will be responsible for paying for his car insurance.....teach them right off the bad that driving isn't free!

  • The insurance company wants $3,000.00 for my 18 year old son, he is just starting to drive- this is crazy!!!!!!!

  • Wow, ralphons...that's CRAZY!  I don't know what the difference is, but our insurance is not going up nearly that much.  Maybe it has something to do with the type of car he's being associated with on the policy?

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