Insuring a teen driver is extremely expensive. Depending on the age of the driver, the type of vehicle driven and applicable state restrictions, adding a teen driver can increase insurance rates as much as 100 percent or more. With the cost of insuring young drivers so high, it’s surprising that parents are even willing to license their teens.

Why is Young Driver Insurance So High?

The high cost of insurance on a young driver is due to one simple fact; teen drivers pose a higher risk of loss. Insurance premiums, whether for life, health or automobile, are based on risk. The risk of accidents for young, inexperienced drivers is four times higher than the risks associated with adult drivers.  The cost of individual claims from teenager-involved accidents is also higher than with adult drivers. As such, insurance companies charge a higher premium to offset potential losses.

How to Mitigate the Risk and Reduce Insurance Costs

Mitigating the risks associated with teen drivers not only reduces insurance costs, but also saves lives. According to a 2007 study, eight teenagers die every day as a result of automobile crashes. Motor vehicle safety programs, like graduated licenses, help reduce the number of teenage driver accidents by 8-40 percent. Such programs prove that by restricting the driving privileges of young drivers and increasing driver education requirements, teenagers have fewer accidents. Additionally, the severity of such accidents, when they do happen, is greatly reduced. Reducing risks reduces the cost of insurance premiums, at least in theory.

What is Graduated Licensing?

A graduated license requires young drivers to complete various stages of driver education and hands-on training before receiving full driving privileges.  Laws and programs vary, but typically a new teen driver is required to complete state-approved driver education classes before obtaining a learning permit. Specific hands-on driver training is required during the learning phase. Most programs include an intermediate stage between a learner’s permit and a full license. During the intermediate stage, driving is restricted based on time of day and number of passengers. Some states add further requirements and restrictions, such as satisfactory school progress and no criminal charges, in order for a young driver to retain driving privileges.

All 50 states have some form of graduated licensing or restricted privileges for teen drivers. In 48 of the 50 states, nighttime driving is restricted for young drivers. The number of passengers allowed in the car with a teen driver is restricted in 45 states.  According to numerous national studies, the more restrictive a graduated licensing program, the great the impact on accident statistics. Depending on the state, some restrictions do not allow full driving privileges until 18, which further reduces teen-related accidents and fatalities.

Additional Safety Law Increase Effectiveness

The National Institute of Health (NIH) funded numerous teen driver studies, releasing a cumulative report in late 2011. The report addressed the effectiveness of restricted driving privileges and graduate licensing. According to NIH, the level of restrictions place on new drivers had significant effect on whether graduated licensing reduced accidents. The study further revealed that the passage of additional laws, beyond just graduate licenses, further reduced the risks posed by young drivers. For example, when combined with seat belt laws and steep penalties for possession of alcohol by persons under 20, graduated license programs were shown to be more effective than programs that did not enact additional safety laws.

Current GDL Programs and Insurance

In spite of studies indicating the reduce risks associated with graduated drivers license programs (GDLs), few insurance companies reduce premiums in states with restrictions. Many states did not enact restrictive laws until the first decade of the 21st century. Even states with older graduate licensing laws did not begin enacting such restrictions until the late 1990s. As such, many private insurance companies claim that research data is inconclusive regarding actual risk reduction. Accordingly, private insurance companies in many states do not discount rates in relation to graduated licensing.

Companies do, however, offer discounts for approved driver’s education programs. Most states require formal driver’s education as part of a graduated license. Provided the course is a minimum of 30 hours and includes both classroom and hands-on driver training, most insurance companies will discount premiums for a young driver. Until further research is conducted, however, it is unlikely insurance companies will substantially change teen driver premiums because of graduated licensing. As such, some parents opt not to allow their teen to drive until 18, to avoid the high cost of young driver insurance.

When it comes to saving money on car insurance, there are some things that you can control and some things that you can’t. You’re probably already aware of the importance of maintaining an excellent driving record and owning a reasonable vehicle in order to get low rates. There are several other special discounts floating around out there that aren’t often advertised. Familiarize yourself with the following list of special auto insurance discounts and mention them to your insurance company to see if you qualify.

1. Good Grades Discount
   If you are a driver between the ages of 16 and 25, attend school and have good grades, you may be eligible for a discount. Whether you or your parents pay that bill, it’s a nice way to save a few extra bucks. Car insurance companies view good students as responsible people, and responsible people are less likely to engage in reckless driving and other risky behaviors behind the wheel.
2. Parking in the Garage
   Did you know that parking your car in your garage can save you money on auto insurance? Not all insurance providers offer this discount, but it’s worth finding out if yours does. Even if it means having to clean out your garage for the first time in years, it’s worth it if it will save you some cash.
3. Have Your Driving Monitored
   It may sound like being monitored by your car insurance company is a form of punishment, but it’s actually a way to score lower rates on your car insurance policy. By agreeing to have a “black box” temporarily installed on your vehicle – and driving as safely and carefully as possible – your rates could drop.
4. Carpool Discounts
   In some cases, you may be eligible for a car insurance discount if you regularly carpool with other drivers. Auto insurance companies occasionally offer this discount to encourage people to share rides. Carpooling is good for the environment, and it can save you money on fuel too. Be sure to ask your agent if this discount is available.
5. Hybrid Vehicle Discounts
   Hybrid vehicles tend to be more expensive than traditional, gas-guzzling vehicles. You can recoup some of that added expense by finding out if your car insurance company offers special deals for hybrid cars. Many insurance providers like to do their part to encourage more eco-friendly habits, and this is one instance in which you could lower your bill.
6. Farm or Ranch Vehicle Discounts
   When you originally set up your car insurance policy, you were probably asked how you were normally going to use your vehicle. On the off chance that you strictly use it on your own property, you may qualify for a farm or ranch vehicle discount.
7. Teacher Discounts
   If you are a teacher, you are probably always looking for ways to stretch your salary as far as it will go. A significant number of auto insurance providers give discounts to people who can prove that they are certified by the state. This isn’t the type of thing that often comes up when signing up for auto insurance, but it’s worth looking into just in case.
8. Driver Safety Courses can Save You Money
   You may not savor the idea of taking a driver safety or education course, but you might be more agreeable to the idea if it means that you’ll save money on car insurance. Make sure that you find out the specific guidelines that are involved in getting this type of discount.
9. Credit Score
   Do you have a good credit score, or has your credit score improved a great deal since you originally signed up for your current car insurance policy? If so, you should let your insurance provider know. Good credit is a sign of being a responsible person, and car insurance companies often extend discounts to those who have proven that they are responsible.
10. Loyalty
    One final thing: Being a loyal customer might qualify you for a special discount. If you’re thinking about switching and have been with the same company for a long time, let them know. In order to retain your business, they may give you a special discount for being a loyal customer.

Here is a list of the best Auto Insurance News from Thirty Twitter Feeds.  Enjoy! 

http://twitter.com/AUT0_INSURANCE- Reports insurance industry news daily.

http://twitter.com/Tips4_Insurance- Provides free informational articles on insurance and has helped website visitors save money with comparison insurance quotes since 2004.

http://twitter.com/insurance- Provides constantly updated insurance industry news and content for the insurance professional and the informed consumer.

http://twitter.com/AutoLoanArea- Learn about auto loans.

http://twitter.com/ANTIQUES_CARS- Read the latest news and trends about antique cars.

http://twitter.com/OFarmersInsure- Follow the views of Chong Wuderman, an Omaha based Farmers Insurance agent.

http://twitter.com/InsureAutoNews- View news about auto insurance.

http://twitter.com/news_insurances- Provides the latest news and insurance facts in the UK insurance industry.

http://twitter.com/CarsInsurance- Posts articles on car insurance.

http://twitter.com/goinsurancerate- Provides consumers with up-to-date insurance rate information and insurance news/tools to best find the rates that they are looking for based on their needs.

http://twitter.com/insurancefinwis- Provides information on all aspects of insurance.

http://twitter.com/InsureMe- Helps people find the most competitive rates available.

http://twitter.com/carcovered- Publishes and quotes insurance rates.

http://twitter.com/autoclaim- Helps consumers stand up for their rights in car accidents, bodily injury claims, settling their total losses, and more (Hector Quiroga).

http://twitter.com/ClaudiaMcClain- Read informative insurance articles from this auto insurance agent in the Seattle area.

http://twitter.com/Collisionhub- Discover the essential networking site for the collision repair industry.

http://twitter.com/carinsurance- Posts USA, Canada and the UK insurance information.

http://twitter.com/RVNation- Provides you with the latest in RV travel and trends.

http://twitter.com/mexinsurance- Discover online tourist auto insurance for Mexico.

http://twitter.com/clinecollision- Follow this collision company in Santa Rosa, CA.

http://twitter.com/InsuranceAdvice- Read free auto insurance advice and check out resources.

http://twitter.com/MobilePros- Follow this mobile auto glass repair company in Broome County, NY.

http://twitter.com/CarDevotion- Dedicated to all things automotive.

http://twitter.com/edmunds- Empowers the automotive consumer with car news, pricing and research.

http://twitter.com/CarConnection- Offers a complete editorial source for auto industry news, car reviews, shopping guides and tips.

Car insurance is a legal necessity and a sensible investment. However, millions of people purchase more protection than they need. Is your car over-insured?

One possible way to save money and stay safe is to reduce or remove your comprehensive coverage and collision coverage. Of course, this would only be worthwhile for older cars that have lost much of their original value. You can get an estimated value for your car from NADA Guides or the Kelley Blue Book. If you continue to hold insurance and your car is totaled, that’s about the figure you’ll receive from an insurance company. People generally recommend dropping comprehensive and collision coverage once the value of a car falls to somewhere between $1000 and $4000.

Another way to save is on car rental insurance. Car rental agencies offer optional insurance, but chances are good that if you rent a car within the United States, you’ll be buying unnecessary coverage. Your regular auto insurance policy will probably apply. If you’ve dropped some sort of coverage from your regular policy though, you might want to purchase supplemental insurance for the more valuable rental car.

Finally, a third way that people overpay is by choosing traditional plans instead of pay-as-you-go programs. If you tend to drive on relatively safe roads at off-peak hours, and/or drive relatively few miles per year, then a pay-as-you-go plan could save you up to 50% on car insurance. These programs are tailored to your specific commute.

For more money-saving tips, see our articles about auto insurance discounts and saving money with teen drivers.

No! Every state in the U.S. somehow holds drivers accountable for their actions. Most states require drivers to have auto liability insurance. States that don’t require auto liability insurance have financial responsibility laws in place to protect accident victims. Furthermore, if your car is being financed, your lender probably requires that you hold both comprehensive and collision insurance as a term of your loan agreement.

How is a financial responsibility law applied? At the time of the accident, the driver must be able to prove his or her ability to cover the costs of the accident. This is true regardless of whether the collision was the driver’s fault. The driver’s failure to prove an ability to pay can result in suspension of his or her license and/or revocation of the vehicle registration.

Remember that auto insurance exists not only to protect others, but also to protect your own health and financial assets. A single accident can cause enough damage to send someone into bankruptcy and years of legal hassles. Thus, it would be shortsighted to think that driving without insurance is worthwhile in the long run, or even for a single trip.

Consumer advocates recommend that people purchase more than the minimum legal requirements. For instance, they recommend carrying at least $100,000 in bodily injury protection per person, plus $300,000 per accident. These figures are at least double the amount of each state’s minimum requirements.

As 2009 comes to a close, many Americans are resolving to stretch their paychecks even further in 2010. How can you get a discount on auto insurance for the New Year? This list of tips provides some great reminders plus options you might not have considered.

1. Simply get new rate quotes. Even if you don’t take special actions to reduce your insurance rate, it’s a good idea to compare car insurance rates annually. Your rate quotes could fall for a number of reasons, such as a change of residency, a safe driving history, or just because you’re a year older; insurance companies tend to offer lower rates when drivers reach age 25 or 55.
2. Install or activate an anti-theft device. Consider adding a car alarm or other anti-theft device to your vehicle. You’ll be helping the insurance company by giving the car extra protection, so they should offer you a discount in exchange. Check with a few companies to find out if the cost of installing a particular anti-theft device will pay off in the long run.
3. Combine your household’s insurance plans. Many insurance companies offer package deals and discounts to loyal customers. Two types of package deals include multi-vehicle discounts and multi-line discounts. Obviously, multi-vehicle discounts involve insuring more than one car on a single policy. Multi-line discounts involve carrying more than one type of insurance with the same provider. An example is combining car, boat, and home insurances.
4. Go green. Ask your car insurance company if they’ll issue a discount for sending your invoice electronically. They will save money on paper and postage, so you might save money on your policy.

For more ways to save on auto insurance, see the Federal Consumer Information Center’s Consumer Action Handbook.

Teenagers are notorious for sending car insurance premiums through the roof. Obviously, teens can’t help belonging to a statistically high-risk group — but there are a few steps that teens and families can take to get lower rates.

1. Take defensive driving courses. Defensive driving courses aren’t just for hazardous drivers. Many car insurance companies give discounts to customers who complete safety courses. State-certified courses can be taken at local schools and DMV offices as well as online. Check with your car insurance provider for help choosing an eligible program.
2. Aim for an A. Actually, a B will do. Discounts of about 10% are generally extended to students earning 3.0 and higher GPAs. Some parents pass the savings along to their kids as a reward or an incentive to keep earning high marks.
3. Update your status. Millions of students are infrequent drivers, and especially when they’re living on a college campus. Considering updating a residential student’s status to “occasional driver” in order to get a lower insurance rate. Of course, you’ll want to increase coverage again during summer vacation.
4. Consider a pay-as-you-go plan. Pay-as-you-go car insurance may be ideal for the teenage driver who drives relatively few miles per year. This type of plan is designed in accordance with the teen’s actual driving schedule, so there’s less chance of paying for more insurance than you really need.
5. Share a policy. In most cases, you’ll save money by purchasing the entire family’s auto insurance from the same provider.

Once you’ve obtained the best rate possible, keep it low by maintaining a safe driving record. The Insurance Institute for Highway Safety maintains a helpful list of tips to help teen drivers avoid accidents.

Car insurance can be expensive. It can also be affordable. How can you find the right rate? Just follow three simple steps:

1. Check your state insurance regulator’s website to become knowledgeable of your state’s minimum auto insurance requirements.
2. Obtain quick online quotes from several low cost insurance agents.
3. Arm yourself with the information below and call a few car insurance reps, starting with your current provider. This step will be time-intensive, but if you save a few hundred dollars, that’s not bad pay.

Raising the following points could lead to significant savings on car insurance:

• Do you offer discounted renewal rates? If you have a respectable driving record, then your current auto insurance provider might offer you a discount to remain their customer.
• Do you offer discounts to low-risk professionals? Car insurance is a statistics game, and certain professions come out ahead. Educators, engineers, and farmers are among those with the best driving safety records.
• What military benefits do you offer? If you’re in any way affiliated with the U.S. military, you could get a discount on car insurance. Discounts are offered not only to enlisted and retired personnel, but also to their spouses and children.
• Do students with good grades get discounts? Studies show that conscientious students are, as a group, better drivers than their peers who earn lower grades. A grade point average of 3.0 or higher could net your student a 10% discount.
• Can you offer me a package deal? Insurance companies offer discounts to customers who insure multiple vehicles or buy more than one type of insurance (e.g., home insurance). Ask if buying more will pay off.

Armed with a bit of knowledge, you can pay less for car insurance.

Sometimes it can be hard finding the best auto insurance. That is why auto insurance quotes.org is there to solve all of your problems. Soon we will be launching a whole new interface that will allow you to find the best and cheapest auto insurance available. We will also have the most comprehensive references answering all of your auto insurance needs. You will be able to get all of your questions answered along with reading other peoples reviews about a certain company. Please stay tuned as there is a lot more to come.

An auto insurance policy may include up to six types of coverage. State-mandated minimums must be met, but some types of coverage are optional. Creating an insurance plan is like selecting from an a la carte menu with the following choices:

1. Bodily injury liability coverage applies to injuries that the policyholder causes to other people. The policy holder and any listed family members are also covered when driving another’s vehicle with the owner’s permission. State minimums for bodily liability coverage are generally low, so consider purchasing more than the minimum requirement.

2. Personal injury protection (PIP) covers medical payments for the driver and any passengers in the policyholder’s vehicle. It may also pay for lost wages and the informal but valuable services normally performed by a person injured in an auto accident. PIP sometimes pays for funeral costs too.

3. Property damage liability coverage pays for damage that the policyholder or another authorized driver causes to another’s car or other property, such as mailboxes and street lights.

4. Collision insurance pays for damage to the policyholder’s car that is caused by flipping over, colliding with another car or object, or driving over potholes. Regardless of fault, collision insurance pays for the policyholder’s expenses minus his or her deductible. If the policyholder is not at fault, then his or her auto insurer might be able to recover the deductible from the other driver’s insurer.

5. Comprehensive coverage pays for car theft or for car damage caused by something other than the scenarios in #4. Some examples include damage caused by a riot, an earthquake, or a flood. Comprehensive coverage is handy when a cracked windshield needs to be replaced too. It’s usually sold with a small deductible ($100-$300).

6. Uninsured/underinsured motorist coverage protects the policyholder against hit-and-run drivers and motorists who do not have adequate insurance to cover losses. This option also protects the policyholder as a pedestrian.