Young drivers should be as knowledgeable about auto insurance coverage and auto insurance companies as automobile safety and traffic laws. States tend to cover young drivers under their parent’s insurance, according to Liberty Mutual Insurance. But even so, once teens have their permit and begin to learn to drive under their parents’ supervision, an auto insurance policy should be officially obtained. Some states, like Texas, even require proof insurance before a driver may obtain a full license. A young driver may be added to an existing auto insurance policy, as is the case with adding a teen driver under his or her parents’ policy, or he or she may obtain a separate auto insurance policy.

Should You Consider a Separate Policy?

One of the primary questions a young driver needs to ask is whether to stay on his or her parent’s insurance policy or to buy a separate one. In both scenarios, there are benefits and drawbacks. Joining a parent’s policy, for example, will usually enable young drivers to get a lower rate. This is because parents typically have an established credit history, multiple cars, and/or own a home, which auto insurance companies reward with lower premiums. But keep in mind that policy rates are also determined based on the comprehensive driving records of the household, so while this may benefit a new, young driver, it may also increase the parents’ rate.

With a separate policy, however, the driver is completely responsible for paying his or her own rate and may choose his or her own coverage terms. In addition, a young driver with a separate policy will not benefit from the potentially cheaper pricing that would come along with joining an existing policy. This is because young drivers usually don’t have an established credit score or even a compete driving record. In fact, some companies may not provide policies to young, first-time policy buyers at all, or those who have had accidents or tickets in the past.

Remember to Ask About Discounts

In addition to discounts on existing policies for adding a teen driver, auto insurance companies may offer discounts for drivers who receive good grades in school, those who complete a driver education course, and those who are students-away-at-school, meaning students who commute more than 100 miles from his or her home for school.

The type of vehicle the young driver operates, including what safety and anti-theft devices are installed on the vehicle, may also allow for a reduced premium. In addition, companies may also provide discounts for maintaining a low mileage and for insuring more than one car on an insurance policy. Increasing a younger driver’s deductible may also lower his or her premium. A deductible is an agreed payment for making a claim covered by your policy, according to Allstate. In the event of filing damages covered by your policy, you pay the deductible out of pocket and the auto insurance company agrees to pay the remaining amount to cover the accident. Having a higher deductible will typically lower monthly payment costs for insurance coverage, but keep in mind that this also means the driver will have to pay more before the insurance coverage kicks in if he or she is involved in an accident. For this reason, don’t pick a deductible amount that the young driver can’t afford.

Maintaining an Affordable Rate and Adequate Coverage

A young driver should be aware that to maintain a low insurance rate or to receive a lower auto insurance rate in the future, he or she must be responsible for maintaining a good credit score and a good driving record. A young driver should also be aware of what coverage is necessary within their state, the types of coverage they possess, and what coverage they may need in the future. A new car, moving to a new location, or a longer commute may also require a young driver to reevaluate his or her auto insurance policy.