If you have a new driver in your household, you may be wondering how much it will cost to add a teenager to your auto insurance policy. While adding a teen will increase your premiums, it will cost much less than the cost of a separate policy for a teen driver. Check out this guide to explore rates and find the best car insurance prices for a newly licensed teen.
when to buy car insurance for your teenager
While licensed drivers pose less risk to the insurance company compared to fully licensed teen drivers due to adult supervision requirements, Wallethub suggests that you check your state and insurer guidelines before you begin. collect quotes. In most states, you must add your teen to your auto insurance policy as soon as she has her instruction permit. Some states, such as Maryland, Indiana, and Illinois, also allow insurance companies to make this a requirement as well. In other cases, your teen will be covered under your policy until she turns 18 or has a full license.
the cost of car insurance for teenagers
Expect your premium to go up 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 significant claim risk for the auto insurance company, resulting in higher premiums for you.
Insurance.com looked at insurance company rate changes in 10 different zip codes when a 40-year-old man with full coverage in 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% for a female teen and 176% for a male teen.
- all state – $3558
- farmers insurance – $7136
- geico – $1695
- Nationwide – $2,857
- state farm – $1928
- progressive – $3478
Insurance companies increase rates for teen drivers due to the high rate of serious accidents among 16-19 year old drivers. 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. In addition, the accident rate for 16-year-old drivers is 200% higher than that of 18- and 19-year-old drivers.
They also report these average annual rates for teen drivers:
The overall average for drivers in this age group is $3,442 a year, which breaks down to an average rate of $2,712 a year for teen girls and $4,172 for teen boys, who have the highest overall accident rate in any demographic group.
In another example, wallethub analyzed the change in price of a six-month policy on a 2014 hyundai sonata by adding a 16-year-old driver to a policy owned by a 50-year-old parent and found an average increase of $2,259 for the policy period. In contrast, the average six-month increase to add another 50-year-old to the same policy is just $939.
buy a separate teen policy
Some parents prefer that their teen driver purchase a separate policy. While this strategy will double the cost of auto insurance for your young motorist, it can also protect 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, he can no longer stay on your policy unless he is a dependent college student.
Depending on your state, your teen driver may not be able to appear on a car title and get independent insurance unless they are 18 or older. younger drivers are also not eligible to sign a legal contract, which is required. to get auto insurance coverage.
You may want to take this step if your teen has a history of accidents or tickets, though you may have to wait until they turn 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 teen.
how to buy teen car insurance
Begin the process by contacting your current auto insurance provider. ask the agent to outline all coverage options for your new driver, including any available discounts that might apply to your family’s policy.
When you make the call (or go online), you’ll need to provide your teen’s driver’s license number. If you’re also adding another vehicle to your policy, you’ll need the VIN number and details about the make, model, and features.
save money on car insurance for teens
When adding your teen to your policy, look for a company that offers young driver discounts. Common options include lower prices for college students living away from home, children who maintain at least a B average, and drivers under the age of 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 during school holidays. cover.com research indicates your teen can save an average of $361 per year on car insurance, or about 7 percent, with a good driver’s discount.
You can also save if your teen is going off to college. According to Insurance.com, insurers offer an average discount of $404 a year, or about 14 percent, on car insurance coverage if your child has a car at your address but lives in dorms or an apartment and drives alone during school holidays.
Overall, 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 than other companies 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 auto insurance.