My auto insurance prices doubled overnight once I had a teen driver. I took 4 steps to keep it under control.
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Jennifer Sisson
- After our car insurance premiums doubled, we looked at how much each provider would cost our family.
- Agents are often able to get lower rates — some of my quotes dropped significantly.
- My son's car is only worth $3,000, so we're saving money by only having liability coverage on that one.
I didn't realize how cheap car insurance was when my kids were small. My husband and I paid around $75 to $85 a month for two cars. Then our oldest hit 15 and began to drive.
Upon adding a teenage driver to our insurance, our premium more than doubled overnight. Fast forward two years, and now our second child is ready for his learner's permit. We're bracing for another premium rate hike.
Thousands of US households are facing the same challenge — you want your kids to learn to drive while under your roof, but insurance for teens is expensive. And while that is unlikely to change anytime soon, we used a few tricks to keep our premium as low as possible.
See Insider's picks for the best cheap car insurance for teenagers »
1. I shopped around — and looked at the overall cost
After years of being a loyal GEICO auto insurance customer, I was shocked that my friendly gecko didn't have the best rate for our teen driver. I got quotes from multiple carriers and eventually went with Allstate's car insurance, as they offered the best bundle with our homeowners insurance policy.
Once I had to change the homeowners policy, we shopped again, and Progressive homeowners insurance ended up as the cheapest. Insurance companies don't always reward customer loyalty, so I have no qualms about shopping for new insurance anytime our situation (location, cars, or drivers) changes.
I noticed that when comparing various policies, sometimes the quoted price can be deceiving. For example, Progressive charges a large payment upfront, making the monthly payments deceptively lower. Some companies assume you'll make a lump-sum payment and quote accordingly, while others bake the monthly installment fee into the price. I had to look at the total premium for the six-month policy to get an apples-to-apples comparison.
2. I got internet quotes, then asked an agent
I thought I could cut out the insurance agent and get a cheaper rate by requesting quotes online. After I received each quote, an agent from the company contacted me via email to say they had additional discounts that the online system failed to apply.
I called a few agents to see if they could improve my rates, and to my surprise, they all did. One quote went from $446 per month to $380. Another went from $397 to $360.
I'm not sure what magic buttons insurance agents push behind the curtain, but they can make adjustments to your rates that websites can't. In the future, I won't click the "buy" button on an internet quote until I see if an agent can pull some strings to get me a better price.
3. I paid attention to the high-cost items
As I was adjusting the coverage to my quote on one site, I noticed that each option was labeled with how much it affected the premium. The add-ons I was cutting to save money (like a rental car after an accident and higher deductibles for comprehensive car insurance) only amounted to a few dollars per month.
The biggest factors in my premium were the cars I had and the type of coverage I chose. I opted for comprehensive coverage with high deductibles on our main vehicles because we can't afford to replace them if they were totaled. I know that coverage is driving up our premium, but the fact that both our Tacoma and our Odyssey were relatively cheap to insure helps. My son's car is worth $3,000, so that car has liability auto coverage only.
One agent noted that it worked in our favor to have the most expensive driver (my teenage son) driving the least expensive car, as premium rates take both the risk of each driver's demographic and the value of the cars into account.
4. I learned how different companies treat teen drivers
When my son got his permit and I added him to the quote, the variation between companies was striking. Adding him to a State Farm auto insurance or GEICO policy didn't change the premium much at all. An agent said because my son would be driving under my supervision, he didn't count toward the policy premiums until he had a license.
Others were more punishing — the Liberty Mutual car insurance quote went up by $140 a month. Progressive went up by $116, though they offer a teen driver discount for customers of a year or more.
Obtaining affordable auto coverage for teens will never be cheap, but by employing these strategies you can minimize the damage that car insurance does to your budget. Driving vehicles that are cheap to insure, opting for liability-only coverage when you can, getting the help of an agent, and teaching your teen to be a safe driver will have the biggest downward influence on your premiums.