A frequently asked question is – how can we save money on our insurance cost with youthful drivers (drivers under 21) still in our household? Though most actuarials (that’s the fancy name the insurance companies call the “bean” counters that come up with our insurance rates) have calculated the probability of a youthful driver getting into some kind of accident – and that probability is pretty high!! Because the likelihood is high there are two specific coverages on your insurance policy that are most affected – the liability and collision coverages.
We NEVER recommend reducing liability coverage – especially with a youthful driver in the household – we actually recommend you ADD more liability coverage with an umbrella policy (we will discuss this in another post). So the other area to focus our attention on is the collision coverage. Collision coverage pays to have the vehicle repaired if in a accident that is the fault of the driver (unless you live in a no-fault state – then there is a whole set of other rules). So here’s some practical ways to keep costs down when you have a youthful driver in your household;
- Put them in the right car – having them as the “primary” driver on a vehicle that you don’t need to carry “collision” insurance - will cut down on your insurance costs. Generally this would be an older vehicle – that if the car was in a accident and a total loss – the actual value of the car being so low would not be such a large financial loss.
- Driver safety courses – most insurance companies provide additional discounts if the student takes a driver safety course. Please contact your agent to find out what courses qualify for discount with your insurance carrier.
- Be sure they have good grades – “good student” discounts are offered by most carriers – and this can be a sizable discount – so find out from your agent what the qualifications are and share them with your youthful driver.
- Tracking devices – recently I heard that some carriers are offering discounts if you have a tracking device installed in the vehicle of the youthful driver. This device wirelessly sends the driving habits of the youthful driver to the insurance company so they can determine the “risk” this youthful driver brings to the household.
- Lock them in their rooms
- that’s right if all else fails, lock them in their room and don’t let them get their license!! Of course we don’t recommend this – well at least provide them some food and water if you choose this option!!
Hopefully you can use some of these suggestions to save some money on insurance premiums if you have a youthful driver in your household. We would love to hear your thoughts and any ideas you’ve used to save on insurance cost with young drivers. Feel free to leave those comments below.
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