Does Your Teen Need Car Insurance?
Purchasing teenage car insurance sounds like a good idea if you do not want to stay on your parents’ plan. However, there are positives and negatives to consider before doing so.
While it kind of defies logic, taking out a teenage car insurance will cost you more. However, there are many benefits for your future.
Now, let’s start with a short list of pros and cons.
Pro: It builds credit scores
As anyone who had to take out a huge loan can tell you, credit scores are very, very important, and you build them by establishing a good payment history. A car insurance at a young age is a great way to do so.
This way, when you finally do need to take out a loan, you will get rates that are significantly lower than what they offer to those who do not have a good credit score. Besides, your car needs to be insured, so the money is definitely not wasted.
Con: It is actually difficult to obtain
Statistically speaking, teen drivers are not the safest bet for insurance companies. On average, they are inexperienced, very likely to be distracted, and tend to cause car crashes. This leads to insurance companies preferring to have teen drivers tied into a plan that their parents have.
The reasoning behind this is simple. They believe that teen drivers are going to pay more attention and try to be cautious if their parents are also the ones taking a hit from a crash. This causes the teen driver to be responsible to their parents. Also, as you can imagine, if they insure a driver who then causes a crash, an insurance company takes a financial hit. Therefore, they cannot really survive if they insure too many dangerous drivers. What they need to do is insure enough good drivers to offset the risk they take while insuring riskier ones, in this case, the teens.
Pro: Reduces your future expenditures
This is not always the case, but if you believe in yourself and are going to drive safely, you can benefit from a good driving record. If you stay on your parents’ plan, it will not be wasted either, because their premiums will go down. However, if you plan on setting yourself up for future, this could be a good choice. Just like building credit so that you can have better rates on loans, you can build your driving record to get better rates on insurance.
Con: It is expensive
While teenage insurances are difficult to get, that is not the only issue they have. Even if you find an insurance company that will offer you their services, the costs are going to be high. While not mandated, almost every insurance company around will raise both the cost and the keep for a car insurance for any driver that is younger than 25. Also, if your family owns more vehicles, having multiple cars on the same plan is a lot cheaper than paying separate plans.
If after reading this you are still choosing to get teenage car insurance, this is what you need to know.
How can a teenager get auto insurance
If you desire to have your own car insurance policy as a teen, you will have to look around for a company that is willing to offer it to you. However, there are car insurers that have specific plans for new drivers and can make it an easier process altogether. If you have one of those nearby, do not hesitate to ask for a discount as there is a chance that they will allow it if the vehicle is owned by you and you have a job. You can also try to ask for a good student car insurance.
What is a good student car insurance?
Some car insurers offer discounts to teens who routinely get good grades in school. You will need to submit copies of school records and your report cards and you will probably receive the benefit of this discount. Note that insurance companies that offer this discount do not actually do so to reward good students. The actual reason is much more down to earth. Demographic research has shown that students with good grades tend to be more attentive and have fewer claims than those who are not performing that well in school.
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