Did you know that according to the CDC car accidents are the leading cause of teen deaths in the United States? It is quite an alarming statistic given that most or all these deaths are preventable.
The fact that young drivers are responsible for a large number of fatal auto accidents is the reason why insurance companies typically charge higher premiums for this demographic.
In fact, adding a teen driver to your existing policy in Michigan can translate to a rate hike of about 56.6 percent according to a 2015 study.
If you think that the situation is bad in Michigan, think again. Michigan is actually the third most favorable state for young drivers coming just behind New York with its 52.3 percent rate hike and Hawaii with its16.83 percent rate hike after adding a teen driver. Still, a 56.6% rate hike is quite high. Fortunately, you can do the following to find a cheap car insurance for young drivers in Michigan:
Useful Tips for Cheap Car Insurance
- Explain the Risks
You need to talk to your teen driver about the relationship between car accidents and the cost of insurance. Young drivers often forget that car insurance is part of the costs associated with owning a vehicle. Explain to him/her that a driving infraction or being involved in an accident typically drives the cost of insurance up.
- Include Your Teen on Your Policy
Adding a young driver to your policy might translate to a premium hike of over 56 percent in Michigan, but it’s still cheaper than letting them buy their own coverage. If you insure your inexperienced growing child’s vehicle with your insurance provider, you may also qualify for multi-vehicle insurance discounts.
- Increase Your Liability Insurance
State minimums for liability insurance might not be enough to completely protect you from lawsuits in case your teen driver is involved in an accident. Today, most vehicles are worth over $15,000 and medical bills for injuries sustained can easily go beyond $20,000 for a single person. Should your teen driver be found negligent in the accident and the damages are far greater than your insurance limits, you might find yourself being held financially liable and could be sued for the amounts not covered by your insurance coverage.
- Assign the Teen Driver to the Right Vehicle
Find out from your insurance provider how drivers are assigned to vehicles. Some insurance providers may assign the most expensive driver to insure (which is usually the teen driver) to the most expensive vehicle to insure. Whenever possible, assign the teen driver to the vehicle that’s least expensive to insure.
However, such an arrangement has no exceptions and your young driver must always drive the vehicle that’s assigned to him/her, even in case of an emergency. If the young driver is involved in an accident while driving an unassigned vehicle, penalties may be imposed and your premiums might increase.
- Good Grades Discount
Students that have higher grade point averages tend to be better and more responsible drivers. It is why insurance companies often give car insurance discounts to students that maintain at least “B” average in school.
- Increase Your Deductible
You can save between 10- 20% on your premium if you go from a $250 to a $500 or even a $1,000 deductible. You can use your savings to increase your liability insurance.
- Get an Umbrella Liability Policy
A personal umbrella policy provides you with an additional layer of liability protection. It typically kicks in once you reach the limit on the underlying liability coverage in your condo, renters, homeowners, or auto policy. For between $150 and $300 a year, it is possible to buy up to a $1 million umbrella liability policy.
- Is the Young Driver Going Away to College?
Once your young driver has gone away to school, you may be eligible for lower premiums, but only if he/she leaves the car behind. Insurance companies typically lower rates for students that attend school at least 100 miles away from home that doesn’t have a vehicle on campus.
- Shop Around
Insurance companies in Michigan often differ in how they price their policies for young drivers. So, take the time to research prices so that you can find the best one for both you and your teen.
Auto insurance for new young drivers can be a rough terrain to navigate if you don’t have the right information and advice. Fortunately, the information provided here is all the guidance that you need. Put it into action and you will definitely find the right insurance coverage for your young driver.