Car insurance is expensive enough when just paying for a policy that covers you and your spouse. If you add kids to that equation, the monthly price tag goes through the roof. Some estimates indicate that adding children to an auto insurance policy can increase the premiums by between 44% and 62%. Some quick math will tell you that a bump like that is an expensive pill to swallow – almost as bad as paying an unfair parking ticket. Anything that you can do to limit that increase and keep your insurance down in the affordable range will be a great help to your budget.
Pick a Car Wisely
The path to affordable insurance for your child starts when you choose a vehicle for them to drive around in. While you probably aren’t inclined to spend a fortune on their vehicle anyway, it will help your insurance if you can keep the vehicle as affordable as possible. A small, inexpensive car will be the best choice for low premiums because they are seen as safer to drive and cheaper to fix.
You definitely want to avoid picking an SUV or a sports car of any kind. SUV’s have had rollover problems in the past, and sports car contain too much power for an inexperienced driver to handle. Since claims by teenage drivers with these kinds of vehicles are more common, the insurance companies raise the rates on those who drive them. Stick with a compact car that already has some miles on it and you will be able to limit the damage on your premiums.
Instead of starting a new policy for your child, add them to your existing insurance policy. Assuming you have a good driving record, your child will have a slightly lower premium because of your positive influence. Be sure to speak with your insurance agent in advance of adding your child onto the policy to find out if there is any other discounts they can offer you for keeping it in the family.
While your child obviously needed to go through driving school to obtain a license, you can go a step further to lower their rates. Enroll your child in a defensive driving course and make sure to note that on their insurance application. Anyone can lower their rate by taking such a course, but the savings is more significant for a young driver. Other factors that can influence the insurance rates for your kids include –
- Gender – Boys are seen as riskier than girls, and have a higher premium as a result
- Age – An 18 year old will cost less to insure than a 16 year old that just got their license
- Amount of driving – If your child only drives to school and back, you may be eligible for a low mileage discount on their portion of the policy
As always, make sure to shop around when adding your child to a policy. If your current insurer will not give you a discount for the family, find one that will. As long as you make sure you are comparing policies that offer the same coverage, shopping around online is the best way to save your money and get the best deal.