Why is Car Insurance for Teenagers So Expensive?

Reader Question: I recently got some insurance quotes for my teenage daughter, and I was shocked at how expensive it was compared to my current coverage. Why is car insurance so high for teenagers?

If I had a dollar for every time I heard this question, it would probably cover a steak dinner for two, including a nice bottle of wine. Fortunately, there's a very easy answer to this question. Teenagers are terrible drivers and a menace to society. :-) Just kidding.

Seriously though, teenage drivers do have a much accident rate than any other single demographic. In certain comparisons, teens are three times as likely to have an accident. After all, teenage drivers are just learning how to drive.

Because of the higher accident rate, teenagers also result in more damage and liability claims than other demographics. So car insurance companies compensate (usually) by charging higher premiums to cover teenage drivers.

How to Save on Teen Policies

Despite the fact that car insurance is usually more expensive for teenagers, but there are still some things you can do to save money on the policy. Here are some ways to save on coverage for teen drivers:

• Compare the cost of adding them to your (parent's) policy versus getting their own individual policy. In most cases, it's more affordable to add a teenager to your current car insurance policy.
• Ask about discounts for good grades. Many companies will offer such discounts, because they feel good grades are a sign of a more responsible youth. There is some logic to that. Sometimes, this discount can be as high as 25% off the premium amount, which is significant.
• Teach your teenager about safe and responsible driving. And, perhaps more effective, explain to them what happens if they get speeding tickets and other driving offenses. Their insurance premiums will skyrocket, and serious offenses such as DUI can result in the loss of a driver's license.
• The type of car your teenager drives will also affect the cost of the policy. Commonly stolen vehicles (such as the Honda Civic) and high-performance sports cars will cost more to insure than other "insurance friendly" models.
  

Getting car insurance for teenagers can be more costly than coverage for adults, but there are things you can do to save money on the policy. It's also important to get quotes from multiple insurance providers, so you can compare the cost and coverage of each policy. This is key to getting the best deal. You can use the box at the top of this blog to get started.

Related articles:
How Do I Find Car Insurance Online?
How Much Auto Coverage Do I Need?

How to Compare Auto Insurance Quotes Online

Auto insurance can be downright confusing. That's part of the reason we publish this blog in the first place, to help you make sense of your insurance options.

But there's one thing that has gotten a lot easier over the years, and that's comparing insurance quotes. In fact, there are nearly a dozen websites online today that allow you to compare auto insurance quotes from several companies at once, just by filling out a single web form.

It's hard to remember what life was like before the Internet. Ten years ago, if you wanted to compare quotes from a handful of insurance companies, you'd have to spend a lot of time on the phone or driving around time. But not anymore. By using the one of the big insurance shopping websites, you can receive auto policies and quotes from several providers. And you don't even have to pick up the phone -- at least, not until you've chosen a company and want to move forward.

But not all of these sites are created equally. Generally speaking, insurance sites come in two types. There are the websites of the insurance companies themselves (such as Allstate.com), and then there are what I refer to as "shopping" websites. Here's the main difference:

• When you visit a site owned by an auto insurance company, you can't really compare quotes or policies. You can only gather information from that particular company.
• But when you visit an insurance shopping website, you're able to compare offers from several different providers at once. These are the sites I recommend using when comparing quotes for auto insurance policies.

There are several of these shopping websites online today, with new ones joining their ranks every year. They all have their strong and weak points. But there's one that I recommend above all others, and that's InsureMe.com. Their website is simple to use, and it lets you compare auto insurance quotes from some of the biggest names in the industry.

You can get started here: Shop and Compare multiple Car Insurance quotes for free.

Once you click on the link above, you'll need to indicate the year, make and model of the car you want to insure. Then you'll be asked some questions about how you use the car, including the estimated yearly mileage. You can also get discounts on your auto insurance for having an alarm system on the car, keeping it in a garage at night, and other things. The website will ask you about these things as well.

After the basic information above, you'll be asked how much comprehensive and collision coverage you want. The website will tell you what the most common options are, which is really helpful. You may also want to read this article on how much coverage you need to purchase.

Other Places to Compare Auto Insurance

I've given you my pick for the best website to use. I've even included a box at the top of this blog you can use to compare quotes from auto insurance providers. But in the interest of making this a well-rounded and objective article, I'd like to give you some more websites to check out. Here are some other sites you can use to get insurance quotes online:

• InsureMe.com (recommended, see link above)
• Esurance.com
• InsuranceQuotes.com

So let's summarize what we've covered in this lesson. The Internet makes it very easy to shop and compare car insurance policies. There are two main types of websites -- the ones owned by individual insurers, and the "shopping" websites like those listed above. I recommend using the shopping sites, because it's the only way to truly compare quotes from different auto insurance companies.

I hope you've found this guide to auto insurance helpful. Good luck.

How Much Auto Insurance Do I Need to Buy?

This is one of the most common questions among first-time car buyers. How much auto insurance do I need to buy? The answer, as usual, is that it depends. I'll offer some suggestions on how much insurance in just a moment. But first, let's talk about the different types of auto insurance coverage you can buy.

Liability -- This is the one type of coverage that drivers are required to have by law. Each state has a minimum requirement. So in order to find out how much auto insurance you may need, you'll first need to learn what your state requires in the way of liability coverage. Liability covers other people that may be injured through some fault of your own (their car damage, their hospital bills, etc.).

Liability also provides some degree of coverage for you, in the event that you are sued. You should start here when determining how much auto insurance you need, because this component is mandatory.

Comprehensive -- This form of auto insurance would reimburse you for expenses related to fire, theft, vandalism, or damage to your car from natural causes (hail, lightning, tree limbs, etc.). In other words, it protects you from damages other than those caused by a collision. And that brings us to the next type of auto insurance coverage.

Collision -- This is the part of your auto insurance that covers damages resulting from an accident, when you are the one at fault.

There are other types of coverage you may be offered by an insurance company, but the three listed above are the most common.

How Much Insurance is Enough?

Now that you know the different types of coverage, we can revisit the primary question we started this article with. How much auto insurance do I need to buy? We talked about the minimum coverage you are required to have by law (liability). This covers you and others when you are the one who causes an accident. So this is your starting point when determining how much insurance you need, because it's also a requirement for registering a car in most states. You simply have to have liability, plain and simple.

You should be able to find your state's minimum requirement by doing an Internet search. A handful of states don't have a legal requirement for liability insurance, but most states do. You can do a search on the Edmunds.com website to get started, or you could do a Google search such as: "Arizona auto insurance +how much liability required" ... plugging in your state, of course.

Some states also require you to have personal injury protection (PIP), also known as medical payments coverage. This would cover your medical expenses in the result of injuries from an auto accident. An insurance company can tell you what's required in your state, and you can also look it up on your state's DMV website or the official state website.

This brings us to the optional forms of auto insurance coverage. Here is where it becomes a matter of personal preference. How much comprehensive and collision coverage you choose should be partly based on the value of the car you are insuring. If you have an expensive car, you would want more coverage. On the flip side, if you're driving a low-value car, you might not need as much of these coverage types -- if any.

So, how much auto insurance do I need to buy? To answer this question, you must start with the minimum amount required by your state, because there's no getting around this. Then you should choose an appropriate amount of collision and comprehensive based on the value of the car.

Bonus Tip: Another good way to figure out how much auto insurance you need is to get an online quote from a provider. You can use the box at the top of this website to get started. When you get an online quote for insurance, the website will walk you through the various choices discussed in this article. Then you can figure out what that would cost you in premium payments each month.

How Do I Find Car Insurance Online?

How do I find car insurance without wasting a lot of time and energy? It's a common question among insurance shoppers, and it's also the topic of today's blog post.

I can answer this question with two words. Online quotes. The best way to find car insurance these days is to use the Internet. In the "old days" before we had the Web, you only had one option for getting auto insurance. You had to drive down to your local insurance office and take whatever they gave you. But not anymore. The Internet allows you to get multiple quotes at once, which helps you compare costs and coverage.

So that brings us to the next logical question. How do I find car insurance online? There are literally thousands of websites online today that offer quotes for auto insurance. Some of them do a great job, while others are best avoided entirely.

We have longed recommended the InsureMe website for two simple reasons -- it's easy to use, and it helps you get quotes from multiple car insurance providers at once. You fill out the form online (just once), and then you get quotes and other information from such providers as Nationwide, Farmers and Unitrin Direct.

Here's how it works:

• Click on the auto insurance quote link at the top of this blog.
• Enter the information requested on the InsureMe website.
• You'll then receive quotes from multiple providers.
• You can compare the cost and coverage to choose the best policy.

How do I find car insurance quickly and easily? It's a question that many people ask, and with good reason. The Internet makes the process easier than ever, while giving you access to a broader range of insurance companies and products. Get an online quote for your next car insurance policy, and you'll be glad you did. Good luck with your search.

Related article:
How Much Auto Insurance Do I Need?