Teen drivers have a lack of experience that can mean a higher risk of filing auto insurance claims. If you have a new driver in your home, it is very important to ensure that person has adequate car insurance. This helps to provide more financial stability if an accident occurs.
There are a variety of factors to consider when choosing a policy. Among them is the amount of deductible that your teen should have on his or her policy.
Who Is On the Policy?
It is very common to list teens as part of a parent's car insurance policy. This is the most cost-effective option for coverage. It lets the teen be a part of a larger policy, reducing overall costs. If this is the case, the teen's policy will match that of their parents. That means the deductible selected will be the same for the teen as it is for the parents. If the teen is financially responsible for the deductible, be sure it remains affordable to his or her income.
In many situations, you may have a vehicle driven strictly by the teen. If that vehicle is in the teen's name, then the auto insurance policy may need to be, too. This means the teen will need to select features that represent their needs. In particular, the teen should consider an affordable deductible. If there is an accident, the teen must pay this amount first – and teens likely have less disposable income to cover these costs than adults do.
For example, imagine a teen is an accident causing $1000 worth of damage to a car. The car insurance policy has a deductible of $250. This means the teen must pay $250 first, and the car insurance policy will pay the other $750. As a result, the teen should ensure they can afford this deductible amount when they enroll in coverage.
Choosing a Deductible and Costs
One important factor to consider is the impact of a lower deductible on insurance costs. Where the deductible is lower, the premium costs for the policy will often be higher. Conversely, raising your deductible can help reduce your premium costs. So, it's critical to finding a balance that is right for everyone involved. Specifically, teen drivers need to find a balance that fits their budget.
Fortunately, most teen drivers can find affordable auto insurance coverage. Most car insurance providers can work with teens to find the right level of coverage for their needs. If you have questions about this process, contact a Dean Heckle & Hill agent today!