It's an inescapable truth: Your insurance premiums will go up - and may even double according to Bankrate - when you add a new, inexperienced driver to your policy. Insurers take a risk when covering new drivers, and though they adjust premiums accordingly, they also recognize that some new drivers are less likely to have accidents than others. And for those that meet select criteria, they offer discounts.
Grades and premiums can go hand in hand
Teens who earn good grades tend to be more responsible than those who don't, and insurers theorize they're less likely to take reckless chances behind the wheel. If your teenager maintains a B average, he may qualify for a discount on his insurance. If your new driver is in college, he must be enrolled full time for at least 12 credits per semester. His good grades may save 15 to 35 percent on your premium, depending on your insurance company and your state.
Your new driver attends school away from home
Insurers are aware that young adults who attend school away from home might not take the family car with them. Let your insurance company know if this is the case. Most impose some restrictions, such as that the new driver must attend school at least 100 miles away from home, but most companies will insure your young driver for less than the full yearly rate if he's only behind the wheel on holidays and during the summer months. Don't remove him from your policy altogether in an attempt to save money. Odds are he's going to ask you for your keys over Christmas break. This discount isn't available for older students, and the cutoff is usually age 23.
Driver safety courses lower rates
Safe-driving courses, programs, and classes can lower premiums. Some insurers offer classes on their websites. Your new driver can watch a class or take a test online, resulting in a financial break for Dad and Mom. Other insurers may require that your teen register for and attend a driving school. Even if there is a fee for the class, you'll save far more on reduced insurance coverage than the school costs you.
Technology is your friend
Not all first-time drivers are teens. You might qualify for discounts on insurance even if you're insuring your mother who's finally getting her driver's license. Whether your new driver is 16 or 60, ask your insurance company about monitoring devices. Allstate offers one called Drivewise. It fits under the dashboard and generates a driving report showing how many times Mom hit the brakes hard or how fast your teenager was driving. Some insurance companies slash premiums up to 30 percent in exchange for good reports.
Ask about safe driver refunds
New drivers of all ages can benefit from accident forgiveness policies like the one Liberty Mutual offers. Your premiums won't jump after just one fender bender, but don't expect the same if a second incident occurs. Some companies award long-term safe drivers with discounts. If your new driver stays on the road for a few years without mishap, your premiums should drop, or you'll receive a refund for a portion of the higher rate you were initially required to pay.
What's he driving?
Don't tweak your premiums by dropping your liability coverage, since it pays for the other car's damage should your new driver cause an accident. Instead, if you bought your teen a $2,000 car, you might not want to carry comprehensive or collision coverage. These coverages pay for damage to his vehicle. If you can pay out of pocket for repairs or for a new cheap car, there's no need to pay increased premiums for coverage you don't really need.
While you're deciding on wheels for your teen, keep in mind that a new car comes equipped with a few safety devices and extras that can earn you a discount and give you peace of mind. Anti-lock brakes and air bags have long been acknowledged as safety features, but new developments can affect insurance premiums as well. Look for collision-avoidance systems, lane-departure warning systems and adaptive cruise control for potential savings on your insurance premium.