Car insurance companies, regardless if its a fair judgment or not, consider teenagers as a high-risk demographic when it comes insuring them. Teens are considered to have a lack of driving experience which would mean that they lack the ability to make reasonable decisions under stressful situations and they are unaware of the hazards of irresponsible driving habits. As a result, they are more likely to be involved in car accidents, and thus more likely to file claims. In order for insurance providers to cover the high risk nature of teens for, they must charge higher premiums. Not all rates are high for teens, sometimes auto insurance Calgary may be offered at reasonable rates.

But this does not mean that you, as a parent, are powerless to keep your rates from rising. If you take the right steps, you can purchase coverage for your teenager without draining your bank account. We'll explain how below.

Don't Fear An Immediate Increase In Your Rates

If your son or daughter has recently reached the age at which they can earn a learner's license, there's little to fear regarding your insurance rates. Your insurer is unlikely to apply a substantial increase.

The reason? New drivers are required to enter a graduated licensing program during which they gain more experience, and acquire new skills behind the wheel. At the beginning level of the program, an experienced driver (e.g. the parent or guardian) is required to accompany them in the vehicle. For this reason, auto insurance companies consider the risk of an accident to be minimal. Consequently, they often choose not to raise the policyholder's rates when a teenager is added to a policy.

Informing Your Insurer About A New Teen Driver

Even though your insurer is unlikely to increase your premiums, you must inform them that your teenage son or daughter will be driving your vehicle. Your policy likely includes a clause that requires you to disclose any change that affects your driving circumstances. If you fail to notify them, and your teenager crashes your vehicle, your insurer may refuse to cover costs related to property damage and medical bills.

3 Quick Tips For Cutting Your Teenager's Insurance Rates

Consider the factors that influence your own premiums. The type of vehicle you drive, your living address, the average number of miles driven, and your driving record all play important roles in determining your rates. So too do the coverages you purchase.

Some of these factors will also apply to your teenage son or daughter. For example, he or she will likely live under your roof, and drive relatively few miles using your vehicle. There are a few additional measures you can take to keep your teen's rates (essentially, your rates) from skyrocketing.

1. Consider dropping collision and comprehensive coverages. As your vehicle ages, these coverages become increasingly expensive given the value they offer. The chances of totaling your car are small. Meanwhile, the cumulative premiums you'll pay for collision and comprehensive can easily exceed the amount you'll receive in compensation from your insurer. If you intend to keep these coverages, at least consider raising your deductibles.

2. Communicate the importance of maintaining a high grade point average. A lot of insurance companies award discounts to teen drivers who maintain good grades. While your son or daughter may lack the financial resources to pay their portion of your premiums, they can help keep them low.

3. Encourage your teen to enroll into a driver education course. When your son or daughter "graduates" from an approved course, your car insurance company is likely to apply another discount. Why? Because passing a driver education course suggests your teenager has learned safe driving skills. This in turn implies fewer claims.

Staying Alert For A Better Deal

We've saved the most important tip for last. Whenever your circumstances change (for example, adding a teen to your insurance policy), take the opportunity to solicit quotes from competing insurers. Rates between auto insurance companies typically vary. A lot of consumers are surprised to find they can enjoy lower rates with the same coverage at a different insurer. When you add a teenager to your policy, you'll find that rates can vary by an even wider margin.

Research prices. You want the most cost-effective coverages for you and your family, so it is in your best interest to compare multiple quotes from different insurance providers. You may be paying unnecessary costs for your premium if you neglect to shop around for the best prices.