ON THIS PAGE
If the thought of your 16-year-old taking off in a car doesn’t give you gray hair, the increased cost of auto insurance might. Adding a teenager to your policy could make what you’re paying now seem more like small potatoes. On average, the increase for adding a 16- to 19-year-old driver is around 80 percent.
Risky Business
This shouldn’t be surprising. New drivers are the riskiest group on the road. There’s a learning curve to driving, and even the most responsible teens lack the experience to come through it unscathed. Factor in the irresponsible ones who are texting, messing with the radio, speeding, eating, applying makeup or driving while intoxicated, and it’s a wonder that rates aren’t even higher than they are.
Here are some statistics on adding new drivers:
- In general, the youngest drivers incur the highest penalties. The average jump in premiums to insure a 16-year-old is 96 percent. For 19-year-olds, it’s approximately 60 percent.
- In most states, females are around 25 percent cheaper to insure than males. Six states, however, prohibit factoring in gender when determining rates.
- In five states, the bill more than doubles with the addition of a teen. Rates in New Hampshire, for example, increase an average of 115 percent.
If you don’t already live in Hawaii, you might consider moving there. It is against the law to consider age and driving experience when a company creates your insurance rate. Adding a teenager increases rates by only 17 percent. After Hawaii, Michigan, New York and North Carolina are the most insurance-affordable states for parents of teens.
The Good News
Fortunately, there are tricks to lowering your bill.
Short of moving to another state, you can take advantage of the discounts that most insurance companies offer for responsible teen drivers. Insurers are notorious for playing these discounts close to the vest, so it pays to ask about them.
Students who maintain a ‘B’ average or better in high school and college could save their parents up to 25 percent. You can’t fudge on this; insurers ask for proof of good grades with each policy renewal.
There might be a discount if your child moves away to college and only uses the car on visits home.
Installing a plug-in device or smartphone-based system that monitors behavior behind the wheel could lower your bill if your child is a good driver.
The car itself has bearing on what you pay. A small to midsize car with modest power and plenty of safety features costs less to insure than a 5,000-pound sport utility vehicle or a sports car known for its speed. There may be an additional discount for a hybrid or alternative-fuel car.
Hot tip: Before you buy a vehicle, find out exactly what it will cost to insure it.
More ways to save on the auto insurance cost
These are good practices for saving money even if teenagers are not involved:
-
Insure multiple cars and drivers through the same company
This usually results in a lower rate per vehicle. Generally speaking, drivers must live in the same household and be married or blood-related. Drivers who are not related must jointly own the vehicle.
-
Take advantage of one-stop shopping
You’ll get deep discounts on car insurance if you have other policies, such as homeowner’s or renter’s insurance, with the same company.
-
Stay on the lookout for a better deals
If your premiums go up, don’t hesitate to shop around. Just be sure that lower-priced coverage is comparable in quality.
-
Maintain a clean record
Maintain a good driving record. Whenever you’re tempted to speed or roll through a stop sign, remember that a fool and his money are soon parted. Every moving violation results in higher premiums. If you go for three years without a violation or at-fault accident, you may be eligible for a discount.
Not only that, but driving safely could prolong your life.
-
Brush up on your driving skills
Along those same lines, you could see savings and live longer if you take a defensive driving class. Many are available online. They are approximately six to eight hours in length, and you can stop and start them for convenience.
Make sure that the course you choose is accredited and that your insurance company awards a discount for it.
-
Consider mass transit
The more miles you drive to work, the higher your premiums will be. The difference is negligible unless you have a two- to three-hour commute, but doing the math could be worth it.
If you have a long commute, compare the cost of using mass transit to the cost of insuring your car. You may be able to save money, better the environment and avoid road rage all at the same time.
-
Improve your credit score
According to Mike Barry of the Insurance Information Institute, “ … insurers will say their studies show that if you’re responsible in your personal life, you’re less likely to file claims.”
Remember that you won’t have to pay through the nose forever. Your rates will go down dramatically when your child is no longer eligible on your policy.
- How to Buy Insurance Guide?
- Look for College Student Insurance
- Find Cheap Car Insurance Solutions
- Look for any Hidden Car Insurance Discounts