Three Ways For Generation Z (Or Their Parents!) To Save On Car Insurance.

Car insurance premiums can be pretty high for drivers under the age of 25. The simple reality is that insurance companies look at how risky of a driver someone is when determining their rates, and young drivers are just less experienced. The good news is that this is temporary. Once you get to 25, you will no longer be paying youthful driver rates. But in the meantime, here are three tips for reducing your premiums (plus a bonus tip at the end).

Driver’s Ed:

Maybe you took driver’s education in high school, or you might not have. Insurance companies tend to offer better premiums to young drivers who have gone through an approved driver’s education course. It’s not hard to figure out why. If you have had documented practice behind with a qualified instructor, the insurance company can better assess your skills as a driver, and will expect you to be safer than if you had not taken the course.

If you’re already out of school but never took driver’s education, it’s not too late. You can still enroll in a class and, once completed, submit proof of this education to your insurance company, and will likely see a lower rate. Just make sure you ask them before you take the class. Another thing to keep in mind is that even if you did take driver’s education, you might not be getting credit for it on your rates. If you started out on a parent’s insurance policy, and then later got your own, it is possible that they were not aware that you had taken the course and that you aren’t getting a discount that you should otherwise be getting.

Again, the thing to do here is simply to ask. If you have a local insurance agent, it is as easy as sending them an email or picking up the phone. If you bought online, then you’ll need to get in touch with your company’s service center, which you can find either on your policy documents or on their website.

Pay-Per-Mile Insurance

Many companies now are offering pay-per-mile insurance, or policies using telematics that measure your driving habits, or even some combination of these factors. Basically, what that means is that the fewer miles you drive, and the safer you drive, the more you’ll save on your insurance premium. This is done either by a small device you plug into your car, or by an app you download to your phone.

If you work from home, or live very close to your workplace, or utilize rideshare or public transportation frequently, this is a great option for you. Insurance companies used to rate you based on averages of how much people drive in your area, but now, thanks to technological improvements, you can buy a policy that is rated to your specific driving habits.

This is another thing that you should ask your insurance agent about, if you have one, and a good reason to work with a local agent. It doesn’t cost you any extra to buy insurance from an agent instead of online, and in exchange, you get the added benefit of a real person you can talk to, ask questions, and who can do the shopping for you when you’re looking for the best rates.

Good Student Discount

This one only applies to students, (high school or college) but if you have a B average or better, more than just your parents will be proud. Many insurance companies offer a discount for being a good student. Why? Well, they see that you must be responsible academically in order to earn good grades, and know that your responsibility will carry over to your actions behind the wheel, making you a safer, and less risky driver. Companies vary based on how much of a discount the offer and what grade requirements they have, so it’s best to consult your agent or insurance company to find out if you qualify for this discount, and if so, how much it is.

Similar to the tip above about driver’s education, you might think you were getting this discount but not actually be, so make sure you check! Ask your agent what kind of proof they need of your good grades and then start saving, it could amount to hundreds of dollars a year!

What Else?

In addition to the tips above, there are several other things you can do to save money on your insurance, including switching to paperless billing, enrolling in automatic payments, not getting any tickets, and maintaining a safe driving record. You can, and should, also talk to an independent agent about your options and see if there are any other discounts they know about specific to your insurance company, or if they can save you money by switching you to a different company.

Bonus

Now, time for that bonus pro-tip. This isn’t exactly a way to save money on your premium each month (in fact, it’s going to cost you a couple bucks, but probably less than $10/month) but adding rental car coverage to your policy is an extremely good idea, and can end up saving you a lot of money in the long run. If you get in a wreck, and it’s your fault, will you be fine going without a car for a month? Parts availability is low right now, and wait times at body shops have been a month or more in many cases. Add to this the rental car shortage has caused rental car rates to go up as well. You could easily be out of pocket $1000 or more just for your rental car if you aren’t covered. Or, if you choose to go without a rental, will that impact your job and ability to earn a paycheck, or your studies if you’re still in school? When you call your agent to ask about the discounts we mentioned above, also ask if you have rental car coverage, and how much it would cost to get $40 or $50 per day in coverage. It’s probably less than you’d think.

If you got this far, you’ve probably realized how much we think you should have a local agent you can trust. As you grow your financial life, you’ll have more things that need insuring, and more complex needs, so it is very handy to have already built a relationship with an agent who can help you with the expanding needs of your expanding life. It won’t cost you any extra, and you’ll have the peace of mind knowing an expert is working with you to protect the life you’re building.