Teen Car Insurance Basics

Passing the driving test and holding a brand-new license is the highlight of a teenager's life. However, car insurance is a necessary responsibility that comes with driving freedom. Teenage drivers need to learn the simple basics of teen car insurance, but don’t overwhelm them. Teenagers cannot control the statistical risk of their age group, but that does not mean your child needs to add to the risk. Parents need to focus on what the teenager can control and work on driving safety with their teen.

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Discuss with your teen the aspects that affect the insurance premium. Explain to your teen how the make and model of the vehicle, the age of the vehicle, and the safety features of the vehicle all contribute to the insurance rate. The make and model determine the base rate for the insured vehicle. Vehicles falling into the luxury or sports car classification carry higher premiums than sedans or sub-compact models. The age of the vehicle directly influences the premium amount. Older vehicles often carry lower premiums than their newer counterparts due to lower replacement cost of the vehicle. Liability premiums will not fluctuate based on the age of the car, because Liability does not repair or replace the insured's vehicle. Optional safety features lower premiums through discounts for features such as side-impact airbags. Similarly, auto insurers often offer discounts on Comprehensive coverage for vehicles that have alarm systems.

Be open with your teen about the costs associated with insurance so that they become comfortable and knowledgable with all of the important issues surrounding it. This will help them along the road to better driver safety and understanding driver coverage.