Help your teen pick the right insurance cover

Watching your baby grow up can be both immensely rewarding and incredibly worrying.  It can be difficult to let go and for some, the realisation that your teen no longer needs you to help them with every aspect of their lives can be upsetting.  However, their independence is testament to all your love and hard work over the years.

Learning to drive is a huge life achievement and it’s no wonder your teen will be desperate to get behind a wheel on their own for the first time and exert some of their new found freedom. But with car insurance premiums rising faster than ever before many teens are finding themselves either tied into cripplingly expensive insurance contracts (that you are no doubt helping out with) or unable to drive at all because of the costs.

Why it pays to shop around

Insurers will calculate premiums based on your answers to a number of different ‘risk’ questions, each insurer places a different value on these factors, which is why premiums can vary so much between insurers and why it pays to always shop around for the best deal.

Using online car insurance comparison sites that generate a number of Australian car insurance quotes from a range of different insurers can help to make this process quick and easy.

The great news is that there are now a growing number of young driver insurers who are prepared to offer lower insurance premiums in return for evidence of safe, legal driving skills.  Here is how you can help your teen navigate their way through this new and complicated financial maze and ensure they get the right cover for their needs as well as the best deal:

 What an insurer will ask

When your teen (or you) tries to obtain an insurance quote, the insurer will ask some, or all of the following questions:

  • Name
  • Gender
  • Age
  • Time driving
  • Previous claims
  • Make, model and year of vehicle
  • Vehicle registration 

Why the insurer needs this information

In a nutshell, insurance premiums are based on the risk the insurer think you may pose and likely cost of any accident you might have. Statistically speaking as a young driver (anyone under the age of 25) you are a much higher risk than older drivers, as you are more likely to have an accident. For more information on young driver statistics click here.

Different cover types

There are a range of different insurance cover types available and each one will offer a different level of cover as well as a different premium.  In most cases, the higher the cover the more expensive the policy will be, as the insurer is effectively increasing their risk.

Comprehensive car insurance is the most popular cover type in Australia and offers the highest level of protection whilst driving.  Lower insurance covers are available, like third party fire and theft but these policies do not cover your teen’s vehicle in the event of an accident and could end up costing more money in the long run.

What is ‘black box’ insurance?

Using telematic technology, black box insurance uses a small plug-in device (known as a black box) to measure and centrally record driver habits.  Insurers then use this to calculate a driver safety score, which will influence your insurance premium – the safer the driver, the lower the premium.

 In addition, data collected by the box can help in the event of an accident as they provide an accurate account of what happened during a collision.  The GPS functionality will also help to easily locate a vehicle fitted with a black box if the car is stolen or taken without consent.

You May Also Like

About the Author: Andrew