Encourage your kids
To get good grades. Most insurers offer a big discount for young drivers who maintain at least a B average in high school or college. College kids generally need to take at least 12 credits to qualify for the discount, says Trisha Mujadin, an independent insurance agent with Seattle insurance agency NRG.
Tell your insurer
If your child goes away to college. If your child goes to school more than 100 miles away and doesn't take a car, you can usually get a big break on your premiums but still have coverage when he or she comes home for vacation.
Ask about other discounts for teenage drivers
Some insurers offer discounts for driver-safety programs, cutting costs for kids who take a special class, watch a DVD, or read a driver safety book and take a test. Ask your insurer what your son or daughter needs to do to qualify.
Make the most of Discounts
Multipolicy discounts. You'll usually get a break on both your auto insurance and homeowners insurance if you keep the policies with the same company. You may get an additional discount if you include an umbrella policy, which provides extra liability coverage beyond your auto insurance limits and can be particularly valuable when you have a teenage driver.
Some insurers offer much better deals than others for teenage drivers, so it's important to compare costs. The insurance company that offered the best rate for you and your spouse may have some of the highest rates when you add a teenage boy to the policy (and it's almost always better to add the child to your policy rather than have him get his own policy). "One company we work with is really great with young drivers and another is horrible," says Nikki at Bergen Insurance.
You may not want to switch from a longtime insurer just to save a few dollars, however, because your current company may be less likely to raise your rate or drop you if your child has an accident. "If you stay with the company where you've been, there's some value to that -- there's more room for forgiveness." Also keep in mind that if you've been getting a multipolicy discount, your homeowners-insurance rate might rise if you take your auto insurance business elsewhere.
One thing you don't want to do in an attempt to reduce your premiums is skimp on liability coverage. Bergen Insurance recommends liability limits of at least $250,000 per person, $500,000 per accident and $100,000 for property damage (or a policy with a "combined single limit" of $500,000, when available, which doesn't limit the coverage to $250,000 per person involved in the accident). Young drivers are more likely to have accidents, and lowering your liability limits could leave you on the hook for tens of thousands of dollars in expenses if your child hits another car or injures someone.