Car Insurance for Teens: How to Keep Rates Reasonable

by Ryan Ruffcorn

Teen drivers are considered the riskiest group to insure. According to the Centers for Disease Control and Prevention, drivers ages 15 to 19 are four times more likely to crash than older drivers, making car crashes the number one cause of death for teens.

Because of that, insuring teens is pricey. Immaturity and lack of driving experience are the main factors leading to high accident rates among teens. In Charge Debt Solutions reports that two car-two families adding a teen driver will increase auto insurance rates by an average of 58%, and three-car families pay an average increase of 62%.

Good records don’t matter much, it’s the lack of experience that drives the rates. According to In Charge Debt Solutions, the age group 16-19 has some of the highest rates annual rates: $2,999. Middle age gets to experience the most reasonable rates: 40-44 see annual premiums at an average of $1,603, and 50-54 see annual premiums at an average of $1,284.

There are things to prepare the teens for getting on the road safely. Parents can: enroll teens in drivers education courses, driver safety programs, GDL programs (graduated driver’s license), discuss the dangers and consequences of driving under the influence, and be a good role model.

How to Keep Rates Reasonable

Lead by example. Teens learn by example so, setting a good example by practicing safe driving may lead to your teenage driver imitating you.
Talk to your teen about the relationship between driving a car and the responsibilities that come with it, including insurance costs.
Insurers rate car types, including rating those cars for safety. It’s best to assign teens a safe, affordable vehicle. In some cases, insurers will even assign the teen to the most expensive car in the house. It’s best to let the insurance company know the teen is assigned to the least expensive car on the policy.
Discuss with your teen, the benefits of being a good- responsible student. Many insurance companies offer discounts for students with a B average, and discounts for college students who don’t house their car on campus and who attend classes at a campus 100 miles or more away from home.
Before making anything decisions, remember that an insurance agent can walk you through coverage and policy options and can explain the costs involved with insuring a teenage driver.

One thing that parents don’t want to do, give teens their own policies; they will pay higher premiums. According to In Charge Debt Solutions, the average annual rate for a teen driver is $2,267, compared to an average cost increase of $621 for adding a teen to the parents’ policy.