It is scary enough to have your teen behind the wheel without having to worry about how much your car insurance rates are going to increase. Even if your teen isn’t going to be driving at all, many car insurance companies require you to put all licensed drivers in the family on your policy. Teens are notoriously the most expensive to insure and it is no surprise since they are also notorious for being the worst drivers.
In cases where you only have partial custody of your teen driver, talk to your car insurance company about the situation. Some car insurance companies will only make the custodial parent insure the driver whereas other companies will make both parents pay full insurance.
If you really don’t want to cover your teen on your car, then you will need to put a named exclusion into your policy. A named exclusion designates that a specific driver will not be covered in any incidents. Be careful before you put this exclusion in your insurance policy; if your teen does end up driving your car, you will not have any coverage if an accident occurs. Instead, check your state laws about whether your teen driver can take out a policy on his/her own vehicle. Not all states allow this because they may prohibit minors from owning property or entering contracts. Even if it is allowed in your state, it will still be cheaper for you to insure the teen through your insurance than taking out a separate policy.
Almost all car insurance companies will offer some discounts for teen drivers. If your teen gets good grades, this can save you about $200 a year on your premium. There are also driving classes which teens may be able to take in order to get an extra discount. If your teen driver is only using the vehicle while home from college and you can show that the college is far away (100+ miles away), then you should also be able to get a discount.
A few car insurance companies are getting creative with ways to minimize risk with teen drivers. You can opt to install a device in your car which monitors your teen’s driving, such as speeding or forgetting to put on the seatbelt. While these devices are pricey, they can help keep your teen driver safe and also offset some of the costs of car insurance premiums. Since the devices are helpful in preventing accidents, they will help keep your car insurance rates low in the long run.
Also make sure that your teen is driving the cheapest car to insure. Avoid any of those flashy cars which your teen probably really wants and instead opt for the safest models. You can ask your car insurance company which cars are the cheapest to insure. As your teen proves him/herself as a good driver and the rates go down, then the reward can be a chance to drive the car that he/she really wants.