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Having to add a teenage driver to your car insurance policy will raise your rates. But you can control how much they'll climb.

Having teens drive a Camry rather than a Corvette, encouraging them to bring home report cards with straight A's, and urging them to keep their driving records clean can all have a major impact on rates.

They may not like the older car but for parents it is a more economical way to insure a teen.

There is a reason teenagers cost more to insure. New drivers are among the most dangerous on the road, racking up tickets and accidents at rates several times the rate of the average driver.

A teenager does not have to drive. Bicycles and bus passes are cheaper, if you live in a place where that's feasible.

But if it's not, here is what every parent needs to know about the cheapest ways to insure a teenager.

Yes, you have to insure your teen driver

Virtually every insurer will require that all licensed family members in a household be included on your policy, whether they drive your cars or not. You should let the insurer know when the child gets his learners permit, but typically the teen isn't listed (or your policy charged) until he or she is licensed.

If you are divorced and have only part-time custody of your child, you'll have to consult your insurance company. Each company has its own rules. The best case is that the parent with primary custody adds the new driver; the worst case is that both parents do.

The only way to avoid paying the premium for a teenage driver on your own car is a named exclusion. Through an endorsement to your policy, you and your insurer agree that the driver is not covered. Any claim caused by that driver isn't covered, either.

Your teen could insure his or her own car, but state laws governing teen ownership of cars differ widely. In general, a minor cannot own property or sign contracts, such as an insurance agreement, without a parent's consent and signature.

It is almost always cheaper to add teenagers to an existing policy than to exclude them, and then buy an additional car and insure that.

Not-so-hot wheels

If your household has several cars, it can help to have your new driver assigned to a specific one -- the one that's cheapest to insure. A bigger, faster engine costs more money to insure and more money to repair.

And just having a car with a powerful engine can be a temptation for young drivers. Instead, four-door sedans and crossover vehicles are a better choice for a young driver in your household.

Don't overlook car insurance discounts

If your teen can't get by without wheels, check with your insurer to see what types of discounts might be available.

In 2010 a survey revealed almost 1,500 parents of teens between the ages of 15 and 19 found their auto insurance costs soared an average of $800 a year just by adding a teenager to their policy.

Many auto insurers offer good-student discounts to teens who maintain at least a "B" average.

And as with adults, the cleaner the driving record, the lower the insurance costs.

If your teen is old enough to head off to college, lives more than 100 miles from home and doesn't have a car, you're also likely to get a break on your auto insurance. That's because the teen isn't a regular operator of the vehicle, but still can drive it when he or she comes home on break.

Asserting your parental influence

Several insurance companies offer monitoring devices that keep an eye on your teen's driving behavior. That may mean sending you a notification if your teen does something he or she is not supposed to do; providing the teen with verbal feedback; or transmitting video of the driving using a two-way camera.

Depending on the system installed, it might monitor certain specified behaviors, like speeding, seat belt usage, hard braking and cornering, arrival and departure times, or moving the car when it isn't running.

 

With these systems installed some companies offer auto insurance discounts of up to 15 percent.

Another option is technology that blocks cell phone calls and text messages when a vehicle is in motion and is aimed at preventing distracted driving.

And Ford has introduced MyKey on some vehicles, which can be programmed to limit a vehicle's top speed or the volume of audio devices.

Parent should look into all these options and decide what will be the best fit for their family.

Posted 1:06 PM  View Comments

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