Car insurance for teenagers is expensive. Each year, families spend thousands of dollars providing car insurance for their teens. If you are the parent of a teenager who is driving, or will be driving, it is important to become familiar with the high cost of insurance for teenagers and understand the options available for reducing costs.

You can even try getting a commercial general liability insurance for your kids. So what is commercial general liability insurance?

A Commercial General Liability (CGL) policy protects your business from financial loss should you be liable for property damage or personal and advertising injury caused by your services, business operations or your employees. It covers non-professional negligent acts.

Teenager driving car insurance is costly because insurance companies consider this age group to be at “at-risk” group of drivers – very similar to the risk associated with driver’s who have been uninsured for more than six months. Because there is no driving history to validate, actuaries within the insurance company will apply high risk factors to the premium rates and, as a result, the cost for insuring a teenager can be excessively high. For many parents, the cost of insuring a teenager for driving can severely impact the teenager’s ability to even have a car that is functioning normal. Most parents opt to purchase older vehicles to keep their insurance costs down.

There are some ways you can opt to lower the cost of insurance for your teenager. First, you will want to be sure that you are choosing to purchase a vehicle that is not a general risk to an insurance company. Choosing vehicles with 4-cylinders, vehicles that will not accommodate many drivers and vehicles that are not in the sports car classification will need to be your first considerations. By purchasing a car that is deemed to be an economy vehicle, with low risk for speeding and passenger liability, your insurance company should apply a relatively lower premium than if you were providing your teenager with sports car.

Another way to lower the cost of car insurance for teenagers is to be sure your teen has completed a driver instruction program that also includes a certificate of completion for defense driving. These types of instructional programs will show to the insurance company that your teen has been educated by professionals and should be a lower risk.

Maintain car insurance for your teen consistently. Any gaps in coverage will result in higher premiums as the car insurance company will deem your teen’s driving and financial responsibility to be risky and then any opportunity for reducing those premiums will be negated. So, in summary, you will want to maintain the coverage consistently and for the long term.

And, finally, to lower the cost of insurance premiums for your teenager, be sure to ask the car insurance company about considerations and discounts given for academic performance. From an actuarial standpoint, teenagers who perform well in school are often considered to be mature for their age and more responsible. With proper academic performance, some car insurance companies will lower insurance premium rates if your teenager is keeping and AB average in school.

Car insurance companies charge very high rates for car insurance for teenagers. If you are looking to insure a teenager, consider these options to reduce your insurance costs and lower your premiums and over the long-term your teenager should find the premiums are reducing as their risk is reduced within the perception of the auto insurance carrier.Sources: Parenting, 2002: 4; 5-11