According to insurance company statistics, 16- to 24-year-olds (particularly males) are the riskiest drivers on the road; they are responsible for more accidents than any other age group. The claims resulting from these accidents cost insurance companies a lot of money in settlements. To minimize their own risk, insurance companies pass their costs on to you by charging higher rates for these drivers than for any other age group. As a result, you’ll want to look for ways to save on your insurance costs.
Unless your insurance company insists otherwise, you may be able to delay insuring your teenage driver until he or she gets a driver’s license. A learner’s permit restricts a teen to driving only when a licensed adult is in the car. Consequently, many insurance companies consider teens with learner’s permits as low-risk drivers and require little if any additional premium to cover them. Learner’s permits are good for 60 to 180 days, so if you’re not required to insure a teen with one, you can save two to six months’ worth of premium expenses.
Once your teen has a driver’s license, adding him or her to your policy will most often be your least expensive option. You may have discounts on your policy (e.g., multiple-car and safe-driver discounts) that reduce your rates; these discounts might not be available to your teen. Do, however, ask your insurance agent if your teen qualifies for any discounts on his or her own. For instance, some insurance companies honor driver-education and good-student discounts.
But if you drive a vehicle that’s particularly costly to insure, it may be better to buy your teen an inexpensive car and insure him or her separately. If the car you buy for your teen isn’t worth a lot to begin with, you may be able to waive the collision and other-than-collision (also known as comprehensive) coverage and save money on the premium.
The Insurance Experts at Henssler Financial can help you compare the numbers to see which route might be the best one to take: experts@henssler.com or 770-429-9166.
Disclosures
The following information is reprinted with permission from Forefield, a division of Broadridge Financial Solutions, Inc. This article is meant to provide valuable background information on particular investments, NOT a recommendation to buy. The investments referenced within this article may currently be traded by Henssler Financial. All material presented is compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. The contents are intended for general information purposes only. Information provided should not be the sole basis in making any decisions and is not intended to replace the advice of a qualified professional, such as a tax consultant, insurance adviser or attorney. Although this material is designed to provide accurate and authoritative information with respect to the subject matter, it may not apply in all situations. Readers are urged to consult with their adviser concerning specific situations and questions. This is not to be construed as an offer to buy or sell any financial instruments. It is not our intention to state, indicate or imply in any manner that current or past results are indicative of future profitability or expectations. As with all investments, there are associated inherent risks. Please obtain and review all financial material carefully before investing. Henssler is not licensed to offer or sell insurance products, and this overview is not to be construed as an offer to purchase any insurance products.
