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Teen Car Insurance: My Rates vs. My Parents’ Rates

By: Amanda LautieriNovember 26, 2014
Teen girl in car with father
Teen Driver with Father

When I got my driver’s license and my own set of wheels 15 years ago, it might have been the happiest day of my life—until my parents sat me down to talk about car insurance.

Sure, I knew about car insurance. I knew my parents made a payment each month to keep coverage in the event of an accident or some other damage. I didn’t know how much they paid or what affected the cost. In my view, the finances were left to the adults…or so I thought. It turns out I had a lot to learn about car insurance for teens.

Decision Time: My Policy or My Parents’?

Once I got my car, I realized I had to insure it. My parents gave me two options:

  •  I could buy my own car insurance policy
  • OR
  •  I could keep the car on their policy.

Either way, I had to pay my own expenses.

At first, I wanted my own policy, as I felt I wanted to be on my own. Yet, once I found out how much I would have to pay, I changed my mind—FAST. I found out that it was way more expensive to buy my own policy.

Here’s why:

Teen drivers are considered high-risk drivers. They’re take more risks and have more accidents on the whole than their parents, who have more experience and are generally considered lower risk.

So, I looked at my second option, which was keeping my car on my parents’ insurance policy and just paying the difference. Still, their rates would go up a little bit more, but my auto insurance would definitely be cheaper this way.

How I Saved Money

My insurance agent explained several ways we could save money on our monthly premiums. For example:

  •  I was eligible for a good student discount.
    • As a student, I was always somewhere between the A- and B-average range, so I saved money all through high school and even college.
  • My parents dropped my car’s coverage down to liability insurance only.
  • I completed driver’s education.
    • Driver’s ed taught me the rules of the road as well as gave me some behind-the-wheel training, and that paid off when I was trying to get cheaper rates.
  • My parents opted to increase their deductible so they could lower their premiums.
    • Our agent explained this is feasible for people who can reasonably afford the higher deductibles should an accident occur.
  • My parents took advantage of some of their own discounts.
    • For example, they have great driving records and were eligible for a good driver reward program.
    • Plus, they didn’t have previous auto claims or gaps in coverage, which are also rating factors when determining car insurance rates.

While it is difficult to get very cheap car insurance for teens, our insurance agent explained that if I kept a clean driving record (i.e., no traffic tickets or license suspensions) I could work toward even lower rates as I proved my ability to drive safely and stay out of accidents.

I took my agent’s advice and followed the rules of the road and now I have a solid driving record that I’ve used to help me find affordable rates for many years.

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