If you have a son or daughter who will soon be of driving age, and you’ve done even a little research on the impact of adding them to your car insurance portfolio, you’re probably still in a state of shock. Because one out of every two young drivers is likely to have a claim-producing accident or incident within their first two years behind the wheel, insurance companies pass those actuarial realities on to you in the form of outrageous policy premiums. Compounding the problem is the fact that automotive repair costs have gone through the roof over the past decade, which increases the average cost of each accident or incident. This “perfect storm” of compounding costs means that you’re well served to investigate every possible avenue for car insurance premium savings.
We’ll briefly cover seven tips for saving money on your young driver car insurance policy.
1. Bundle up to weather the financial storm. I’m referring to bundled policy elements, which is an insurance industry term that simply means having more than one policy or service with the same insurance company. By bundling your policy needs with the same company, such as insuring both your home and your car with them, you can often save up to 25% off of your combined premium costs.
2. Get a multi-car insurance discount. If you don’t bundle disparate policy needs with the same insurer, at least insure all your vehicles with the same company. This will save an average of 20%.
3. Make sure Junior gets good grades. Short of doing his homework for him or her, you should do everything you can to make sure your young driver gets solid grades in school. The required grade point average varies by insurer (it’s usually a 3.2 to 3.5 or better), but once your son or daughter meets the threshold, you’ll begin saving up to 15% on their insurance premium.
4. Be a safe, conservative driver yourself. Two benefits here: first, you’ll set a great example for your young driver. Second, remaining accident-free and ticket-free will lower your overall risk profile, which will impact every premium on your account. Safe drivers save money.
5. Remain a loyal customer. Most insurance providers reward a long tenure with them as your car insurance provider. It varies by car insurance company, but remaining with them for anywhere between 3 and 5 years will often garner a loyalty discount of up to 15%.
6. Maximize your safety options. Make sure your young driver’s car includes daytime running lights, anti-lock brakes, lane-control assistance, and anti-theft devices. The discounts available for these packages vary, but you want to give your son or daughter every safety advantage available.
7. Research any affinity group memberships you have. Memberships in veterans groups, Elks or Masonic lodges, and the like, can often be worth 10% off your policy premium.
Following these seven tips will help you save the maximum amount possible on your car insurance policy.