Adding a teen driver to your car insurance policy can increase your premium by 50 percent to 100 percent, but there are ways to reduce your cost.
Insurers are offering a variety of teen-focused programs and teen driver discounts that may lower your car insurance rates.
Driver safety programs
In some states, driver's education classes are a license prerequisite. In others, it's optional. Either way, your car insurance provider may offer a discount for teens who complete these basic traffic safety courses. Teens who complete the online course at DriversEd.com receive teen discounts of up to 10 percent, according to the Oakland, Calif.-based firm whose $99 course is available in all 50 states.
In addition, car insurance firms may offer other programs that will get you a teen discount, says Justin McNaull, director of state relations for Heathrow, Fla.-based AAA. To encourage teen drivers to get more practice time on the road, State Farm offers the Steer Clear Safe Driver Discount Program. It includes 20 practice drives that young adults take with their parents, and those age 16 to 24 who complete the free program qualify for a teen driver discount on car insurance of up to 15 percent.
Some insurers offer online defensive driving programs that, when completed successfully, result in a reduction in the car insurance premium collected for teens. Graduates of the teenSMART driver safety program -- approved for insurance premium discounts by AAA, Allstate, American Commerce and Liberty Mutual insurance providers in selected states -- receive teen driver discounts that vary by insurer. But Advanced Driver's Education Products and Training Inc., in Elk Grove, Calif., says the savings may be hundreds of dollars above the $119.95 cost of the 10-hour multimedia course.
There are also day-at-the-track programs. Taught by driving and safety professionals, and even race car drivers, these closed-road programs usually last four hours and offer behind-the-wheel simulations of accident-causing situations.
Westfield Insurance, based in Westfield Center, Ohio, offers a teen driver discount of 10 percent if the person completes the Honda Teen Defensive Driving Program run by The Mid-Ohio School in Lexington, Ohio. "Other insurance agencies may offer a discount on a per-case basis," says Mid-Ohio School spokesman Jesse Ghiorzi.
Monitoring devices
When it comes to teen driving, some insurers are getting high-tech by offering discounts for parents who install basic systems such as CarChip, a device made by Davis Instruments Corp. that reads and stores data from your car's on-board computer, according to product literature. Some pricier GPS-based systems gather real-time driving data and location tracking and include in-car video cameras activated by risky driving, such as sharp turns or sudden breaking.
In an informal survey of car insurance firms, Bankrate found that these systems range from a flat fee of $140 to $1,400 with additional monthly service fees. Before you buy any system, check with your insurer as some may offer these systems for free or at a discount for using them.
School smarts
While not a driving program, many insurers offer additional, varying discounts for teens who maintain a 3.0 grade point average in school. Check with your car insurance company first before you sink time and money into any teen-driver safety program. Many car insurance carriers require you to use an approved program or provider, and some offer vouchers or discounts to pay for the program, several car insurance companies say.