It is hard enough to keep household expenses under control, but if you have a teenager who is almost ready to drive, there's another shock on its way. Adding a teenager to your family's auto insurance policy can spike your premium up from 50% to a whopping 200% of what you were paying before.

 

Fortunately there are steps you can take to reduce the bill, like having your teen enroll in a driver's education class or assigning them to a specific vehicle on your car insurance policy. With some prudent steps you can reduce your car insurance bill by 25% or more.

 

The best place to start is with a driver's education course. Most insurance-approved driver's education courses take about 30 hours of classroom time plus another seven hours of instructor-supervised driving time to complete. Costs range from $100 to $500 depending on where you live and which company you choose. While that may seem steep, consider this: Assume your annual $1000 auto insurance policy is going to go up 50% after you add your teen, to $1,500 a year. If you pay $250 for a good driver's education course, your $1500 premium will drop 15% to $1275. That means the driver's education course will nearly pay for itself in one year. If your teen gets their driver's license in their sophomore year of high school, you will have saved over $600 in insurance premiums by the time they graduate. If your premium was going to jump more than 50% upon adding your new driver, the savings really start to rack up.

 

Not only is a driver's education course a good buy in terms of insurance savings, it prepares your teen for safe driving and reduces risk of accidents. Even a small auto accident can cost hundreds of dollars, plus you'll face the dreaded insurance premium spike after you've reported the accident. A good driver's education course will teach your young driver the rules of the road and give them a sobering view of what can happen if they are careless. The driving practice is one-on-one with a licensed driving teacher so your teen will have experience with everything from parallel parking to merging onto highways.

 

In many states, drivers under 18 are required to take a driver's education course to get their license even without the insurance consideration. If you live in a state that requires a driver's education course to get a license before age 18, chances are that your teen already knows where the courses are and how much they cost. If they don't, call the high school or the nearest Department of Motor Vehicles to find out. Be sure to check with your insurance provider to make sure the class qualifies for the premium reduction. Many larger insurers have their own teen safe driving programs. It is possible you could get a further deduction if your new driver took one of those courses, too.

 

There are some driving classes that have no actual driving lessons; the curriculum is all classroom time. These classes typically require 56 hours of classroom instruction with a written test before students get their graduation certificate. Of course, if you want to lower your family's driving insurance costs even further, you or someone else in your family can join your teen in the classroom. This can be especially effective for reducing your insurance payments if the second person has been in an accident within the last few years.

 

Though a driver's education class is the single best way to reduce your insurance costs by up to 15%, you can call your insurance company and see how they assign cars to drivers. Some auto insurance companies automatically pair the most expensive driver to insure (your teen) with the most expensive car. No wonder the rates go up. If you are planning on getting your teenager an old clunker for their early driving years, ask your insurance company to link the teen with the clunker and you'll pay much less than if the teen was linked to the family's best car.

 

Finally, you and your teen need to have a heart to heart talk about drunk driving. This talk may not reduce your rates, but you need to deliver the cold, hard facts about your position on drinking and driving. The driver's education course will teach your new driver a lot about what drunk driving can do, but you backing up what they learn with an honest discussion is the best insurance available.

 

This guest post was written and provided by freelance writer and part time car insurance agent, David Brenner.