Posted in News on June 23, 2018

A teenager gaining a learner’s permit or driver’s license comes with much excitement but also many stresses. Those concerns include more than worrying about how well the teen will drive or making sure he or she follows the rules of the road. With a new driver in your vehicle, you’ll be looking at changes to your Montana auto insurance policy as well.

Teenagers are four times as likely to get into car accidents as adults due to their lack of experience – and car insurance rates for teenagers show it. To cover the increased potential for accidents, you’re looking at a potentially hefty increase to your auto insurance bill once your teenager gets behind the wheel.

When Your Teen Needs Auto Insurance

By Montana law, teens with a Traffic Education Learner’s License or those driving with their leaner’s permits and a licensed driver in the car do not need their own insurance policies. This changes once your teen earns his or her license and starts to drive alone. After that point, teenagers need an insurance policy that meets the same minimum requirements as any other Montana driver:

  • Bodily injury: $25,000 per person and $50,000 per accident
  • Property damage: $10,000 per accident
  • Uninsured/underinsured motorist: $25,000 per person and $50,000 per accident

Insurance requirements start once your teenager earns his or her First-Year Restricted License and starts driving, with or without a licensed adult in the vehicle, depending on the stage of their license.

Teenage Auto Insurance Rates

Because of the increased risks of new drivers, teenagers have some of the highest insurance rates across all age groups. For the same policy, a driver in the 16- to 19-year-old group may pay $2,999 while someone in the 20- to 24-year-old group may pay $2,040, dependent on the type of coverage. The average insurance rate continues to drop for older age groups.

For one-car families, a teenager can increase the bill by about 44%. Families with more cars can expect higher increases.

Keeping Costs Low

Though teenagers often insist they need their own vehicles, having one brings much greater insurance costs, especially if you put them on a separate policy. Adding your teen to your own policy will save much more money, as will sharing vehicles among the family.

Other ways to reduce the cost of your teen’s insurance rate include:

  • Raise deductibles to lower premiums – Increasing your deductible can save you money on your insurance rates. However, this means you’ll have to pay more out of pocket in the event of an accident. Consider your emergency budget before changing your deductible.
  • Share vehicles – Your teen’s classification on your insurance policy affects the rates. If the teen is an “occasional” driver, you’ll save money as opposed to if he or she is the “main” driver.
  • Practice – The more time your teen spends driving, the more familiar he or she will be with it and will be less likely to be in an accident. Practice with your teen in a variety of road types, times, and weather conditions to prepare him or her for driving alone.
  • Investigate discounts – Your insurance policy may offer discounts if your teen has completed driver’s education classes or maintains a B average in school.
  • Be involved – Don’t just let your teenager go off on his or her own once he or she has a license in hand. More involved parents help reduce teenager’s chances of getting tickets and engaging in risky driving. Consider setting up a driving agreement to make rules for your teen using the car without supervision.
  • Make smart vehicle choices – SUVs and larger trucks can be harder to maneuver for new drivers and are more likely to have roll-over crashes; smaller vehicles don’t offer as much protection in accidents; sports cars can encourage reckless driving. Having a mid-size sedan for your teen is one of the best vehicle types for learning drivers.

Though insuring a teen driver can be expensive, ways exist to keep costs down. Careful policy selection and encouraging good driving habits can save money and help keep your new driver safe on the roads.

If your Teen gets in an Accident…

If you’re insured teen has recently been involved in an auto accident, it’s best you consult with an experience car accident attorney. Contact our law office today if you’d like a free case evaluation today.