How Much to Add a Teenage Driver to Insurance?

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When your teenager starts driving, you are faced with a number of new concerns. Will they be safe? Are they ready for the responsibility? Can I afford to pay for repairs in the event of an accident? Automotive insurance coverage for your teen will help with the repairs, but the additional cost in insurance premiums depends on a number of factors.

Statistics

  • According to the Insurance Institute for Highway Safety, the number of highway crashes involving teenage drivers is disproportionately high, compared to crashes committed by older drivers. In 2009, teens ages 16 to 19 were four times more at risk of an accident than older adults. Since the odds of being involved in an accident are so much higher for younger drivers, insurance companies take on a greater risk when insuring teenage drivers; therefore they charge higher insurance premiums.

Costs

  • While costs may vary drastically among insurance companies, you can expect your rates to increase anywhere from around 50 percent to more than double when you add a teen driver to your policy. Accidents and traffic tickets will increase the rate even more. Once your rates go up, do not expect them to decrease much until your child reaches age 20. By then, the statistics that insurance companies use as a basis for setting rates show your teen will likely be a more experienced, cautious driver. This makes him a better risk.

Teen Cost Cutting

  • Your teen can take steps to reduce the cost of adding him to your insurance policy. Many insurance companies offer a 10 to 25 percent discount for teen drivers who maintain at least a B average in school. Enrolling and passing a driver's education class may save mom and dad another 5 to 15 percent. When teens go to college, consider carefully whether your teen will be taking a car. Many campuses are self-contained and require very little traveling out of the immediate vicinity for class, work or entertainment. Avoiding travel at night and in bad weather and taking traffic laws seriously are all steps a young driver can take to reduce the risk of an accident or legal action, which can cause rates to go up.

Adult Cost Cutting

  • As a parent, you can also take steps to ensure you are paying the lowest premiums possible. Talk to both your agent and competing agents about the cost. Comparison shopping is the best way to get the best rate. Do not forget to take into consideration discounts for good grades and completing driver's ed. If you are buying your teenager a car to go with the new driver's license, remember that part of your premium rate is dependent on the age, make and model of the vehicle. Call your agent before buying a car. You may see a drastic difference in rates between a sports car and a sedan. Consider raising your deductibles.

References

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