If you have teens in your household, you’ll have to start thinking about it eventually—driving. And teen driving comes with many questions: Will my children be safe? Will they listen to all of the driving tips that I’ve tried to teach them? Will they crash my car? Will they drive up my insurance rates?

It’s not uncommon for money to come right after safety on the list of parents’ teenaged driver woes. From the costs associated with driver’s ed to gas expenses and the cost of a new car, teenage drivers can cost a significant portion of parents’ income, and this is without the cost of auto insurance. Although age is a consideration when it comes to the price of auto insurance, there are some ways that you can save on your auto insurance even when there is a teenager in your household.

Why Age Matters

According to Allstate, auto accidents are the #1 killer of teen drivers, leaving around 5,000 dead and around 375,000 injured every year. The high crash rates can be chalked up to a variety of variables. First is inexperience; teens have been on the road for a few years or even just a few months. With little driving time, they’re more likely to run into problems than experienced drivers who know the rules of the road. Second, teens are also likely to take risks and engage in distracting behaviors while driving. According to some scientists, teens’ brains are not as developed as adults’ brains. In fact, some researchers even say that the area that is most underdeveloped is that which is associated with making good decisions in an adult. This means that teens are less likely to see the ramifications of talking on the phone, texting, becoming distracted by friends, or engaging in reckless behavior while driving.

Insurance companies care about this for a couple of reasons. First, many of them work together in coalitions to try to improve the safety of our nation’s roads. For instance, the National Organization for Youth Safety considers safe driving to be an important issue among teens.  With more teens dying and being injured in car accidents each year, more insurance companies are advocating safety measures, like Allstate’s parent-teenager driving contract and graduated driver licensing laws, which push back the driver’s licensing age to 18. Second, insurance companies have to pay more financial rewards when teens drive unsafely. Teens who cause accidents cause insurance companies to cover the cost of those accidents. The bottom line: teens engage in more risky behavior than adults, so they are more risky for insurance companies.

Money Saving Tips

Although teens are a high risk for insurance companies, Edmunds.com states that not all companies make parents pay an arm and a leg just to get auto insurance for their teenagers. In addition, the web site lists several tips that parents can use to reduce the cost associated with insuring their teenager.

One of the best ways to lower a teen’s car insurance rates is simply by encouraging that teen to drive safely. Edmunds.com notes that teens who have good driving records are less expensive to insure, in addition to suggesting that parents promote that good driving record by being good drivers themselves. Regardless of your age, the biggest variable in deciding your car insurance rate is your driving record. If you have caused many accidents or gotten many moving violations, you’re far more likely to have to pay a higher premium, and the same is true for your teenager. Esurance turns that good driving into direct, tangible rewards. According to the insurance company, teens who have spotless driving records will see a reduction in their insurance rates each term.

In addition to driving safely, some auto insurance companies offer discounts for teens who get good grades. According to Edmunds.com, teens who have a 3.0 or better can generally lower their car insurance rates by 10%. If you add your teenager to your auto insurance policy, you can maximize these rewards by having different kinds of insurance policies from the same carrier. The Associated Press notes that having other policies, such as homeowners insurance, with the same company that provides your auto insurance can end up getting you a discount, which applies to all drivers under your policy.

Another way to lower your teen driver’s insurance is to encourage your teenaged driver to take driver’s ed. Many auto insurance companies offer discounts for teens who have had formal training. Driver’s ed also has many other tangible benefits, such as making teens think twice before they engage in risky behavior while driving.

Teens and Traffic Trouble

No matter how safe your teenager is, and no matter how much formal training he or she has had, the likelihood that he or she will get into an accident eventually is high. If your teen does get into an accident, it’s important to report it to the insurance company. Some companies offer accident forgiveness, which can maintain your current premiums in light of a single accident.

Another problem that teen drivers also often face is speeding tickets. Although speeding tickets can add points to your license, which can increase your auto insurance premiums, most states offer a deferment program. This program is a win-win situation for parents with driving teenagers. Teenagers aren’t spared the cost of paying for their tickets—often, the cost of the deferment program is actually more than the cost of paying for the ticket alone. However, if the teenager successfully completes the program, which usually includes getting no tickets or violations for a period of several months, points never end up on the teenager’s license.

From teaching teens to drive safely to encouraging them to get good grades in order to save money on their car insurance, parents of teenager drivers need to take an active role in their young driver’s roadway habits. And doing so can pay off—literally. When teens drive safely, everyone benefits—parents, teens, and insurance companies.

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