If you have a new driver in your household, you may wonder how much it will cost to add a teenager to your car insurance policy. While adding an adolescent will increase your premiums, it will cost much less than the cost of an independent policy for a teen driver. Review this guide to explore the rates and find the best prices for auto insurance for a young person with a new license.
When to Buy Auto Insurance for Your Teen
While permitted drivers carry less risk to the insurance company compared to fully licensed teen drivers because of adult supervision requirements, WalletHub suggests that you check state and insurer guidelines before you start gathering quotes. In most states, you have to add your teen to your auto insurance policy as soon as they have their learner's permit. Some states, such as Maryland, Indiana, and Illinois, also allow insurance companies to make this make this a requirement as well. In other cases, your teen will be covered under your policy until they turn 18 or have a full license.
The Cost of Teen Auto Insurance
Expect your premium to increase when you add your teen to your car insurance. According to Reviews.com, motorists ages 16 to 19 have higher accident rates than all other drivers. That creates a significant risk of a claim for the auto insurance company, which results in higher premiums for you.
Insurance.com looked at the changes in rates from insurance companies in 10 different zip codes when a 40-year-old man with full coverage on a 2019 Honda Accord received quotes to add a 16-year-old teen driver. The website found that:
Households in California had the highest rate increases of more than 200 percent.
On average, the cost of coverage increased by 152 percent.
The average increase was 129 percent for a female teen and 176 percent for a male teen.
Insurance companies raise rates for teen drivers because of the high rate of serious crashes among drivers ages 16 to 19. Insurance.com reports that according to the Centers for Disease Control and Prevention this age group has a 400 percent higher accident rate than other age groups. What's more, the accident rate for 16-year-old drivers is 200 percent more than drivers aged 18 and 19.
They also report these average annual rates for adolescent drivers:
Allstate - $3558
Farmers Insurance - $7136
GEICO - $1695
Nationwide - $2857
State Farm - $1928
Progressive - $3478
The average overall for drivers in this age group is $3442 a year, which breaks down to an average rate of $2712 a year for teen girls and $4172 for teen boys, who have the highest overall accident rate of any demographic group.
In another example, WalletHub looked at the change in the price of a six-month policy for a 2014 Hyundai Sonata when adding a 16-year-old driver to a policy owned by a 50-year-old parent and found an average increase of $2259 for the policy period. In contrast, the average six-month increase to add another 50-year-old to the same policy is just $939.
Buying a Separate Teen Policy
Some parents prefer to have their teen driver buy a separate policy. While this strategy will double the cost of auto insurance for your young motorist, it can also shield your family's net worth if they are at fault in a serious accident. Also, if your teen graduates from high school and moves away, they can no longer remain on your policy unless they are a dependent college student.
Depending on your state, your teen driver might not be able to appear on the title of a car and obtain independent insurance unless he or she is older than 18. Younger drivers are also ineligible to sign a legal contract, which is necessary to obtain auto insurance coverage.
You might want to take this step if your teen has a history of accidents or tickets, although you may have to wait until he or she turns 18. Even if you have a clean driving record, these items can increase your cost by up to 20 percent if you share a policy with your adolescent.
How to Buy Teen Car Insurance
Start the process by contacting your current auto insurance provider. Ask the agent to describe all the coverage options for your new driver, including all available discounts that might apply to your family's policy.
When you make the call (or go online), you will have to provide your teen's driver's license number. If you are also adding another vehicle to your policy, you will need the VIN number and details about the make, model, and features.
Saving Money on Teen Auto Insurance
When adding your teen to your policy, shop around to find a company that offers discounts for young drivers. Common options include lower prices for college students living away from home, kids who maintain at least a B average, and drivers who are younger than 18. Ask about these discounts even if your agent hasn't mentioned them before, especially if you have a student who lives in the dorms and only drives on school breaks. Research from Coverage.com indicates that your teen can save an average of $361 per year on auto insurance, or about 7 percent, with a good driver discount.
You can also save if your teen goes away to college. According to Insurance.com, insurers offer an average discount of $404 a year or about 14 percent on auto insurance coverage if your child has a car at your address but lives in the dorms or an apartment and drives only on school breaks.
Above all, experts recommend getting at least several quotes from different providers when adding a teen to your car insurance. Each company has its own proprietary pricing structure and offers very different prices from other firms based on a variety of factors. You can easily compare prices for the same coverage between insurance companies with online search tools.
Check this out if you need additional information, resources, or guidance on car insurance. https://www.caranddriver.com/car-insurance/
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