Available AAA Insurance Policies for Teen Drivers

My teenage son will be getting his driver\'s license next month. What is the best way to reduce the cost to insure him with AAA?

It’s upsetting to think that the #1 cause of death for teenagers is car accidents. Despite graduated licensing laws, driving restrictions, and a heightened awareness of the dangers, teen driving remains a risky and sometimes lethal proposition. From 1995-2004, car accidents involving teen drivers claimed the lives of 31,000 people, over 11,000 of which were the teen drivers themselves. Given these facts, the exorbitant cost of insuring a teen driver is not at all surprising. One insurance company that has spearheaded a number of awareness-raising campaigns about teen driving, AAA, is especially devoted to the safety of this demographic. In this post, we’ll discuss AAA’s policies as they relate to teen drivers.

Assigning Cars to Drivers

Before you add your teen to your AAA car insurance policy, you may first want to ask your agent how the company assigns drivers to cars. For instance, if you need to insure two vehicles and three drivers, some companies will assign the most expensive driver to insure (your teen) to the vehicle that costs the most to insure. Insurers do this in order to offset the inordinately high costs of insuring young drivers. If you have a brand new vehicle or a luxury car, your premiums would shoot through the roof if your insurer followed this practice. To combat this, you could buy your teen his/her own older car and assign him/her as the primary driver. Alternatively, you might also look for another insurer that allows you to choose the vehicle to which you assign your teen.

High-Deductible Policies

To minimize your premiums after you add a teen driver to your policy, you could try raising the deductibles on your AAA insurance. Higher deductibles can lower your premiums by as much as 35% in some cases. Using your insurance to make relatively small claims that you could afford to pay out of pocket will hurt you financially in the long run. For one, smaller deductibles will keep your premiums high. Secondly, repeatedly making claims, even small ones, will raise your future premiums. With a teen driver on your AAA policy, that could quickly make insuring him/her unaffordable.

Raise Your Liability Limits

Your teen may not have a dime to his/her name, but you certainly have your share of assets to protect. You have a home, retirement savings, investments, and other valuable assets that could be jeopardized by one accident liability judgment against your teen. Until your teen goes away to college and/or can purchase his/her own policy, think about buying a AAA car insurance policy with generous liability limits. If you’d like to insulate yourself against liability but don’t want to pay for it with your premiums, consider purchasing an umbrella liability policy for $1 million or more.