Recent findings by experts in the insurance industry show that the cost of including a teen on a car insurance policy is decreasing.
A few years ago, including a teen driver on one’s auto insurance would have added about 85% to one’s policy only 5 years ago. Currently, the rate change is about 78%.
While an improvement it is still a substantial amount. So why is the inclusion of the teen driver seen as an added risk? The main reason is that the adolescent driver is more likely to be involved in accidents than more experienced drivers are.
Indeed, reports by the National Highway Traffic Safety and Security Administration indicate that auto accidents are the main cause of death among teen drivers. About 2000 of youthful drivers died in auto related accidents in 2015, which was a significant rise of about 10% from the previous year.
The premium paid for adding a teen driver can be particularly painful when the teen involved is male. There is a major discrepancy between the insurance cost for male teens and their female counterparts. (On average adding a male driver increases costs by 89%, compared to only 66% for female teens. This cost also varies depending on the state.
Why are rates Falling?
- There are fewer teen drivers getting drivers licenses.
- Technology has made cars safer to drive. This is especially true for newer vehicles with advanced collision prevention systems.
- Graduated driving programs impose greater restrictions on young drivers until they have more experience behind the wheel.
It is important when adding a teen to your car insurance that you work to prevent accidents so your rates don’t go even higher.
- Have a strong commitment from your teen that they will not touch their mobile device while driving. (There is new technology on the way that can disable mobile phone apps while a vehicle is in motion.)
- Instead of purchasing a “personal” car for a teenager, purchase a “family” car that they are allowed to use. It belongs to the house, not to them. Install monitoring devices to ensure speed limits are adhered to and that the car is being properly driven. Have a firm understanding that the care may be used with permission and if the rules are followed. This can also be tied to maintaining excellent grades, etc. Upon graduation, the car could be gifted to the teen as they move to college.
- Be sure the car has plenty of automated safety features to protect your teen, their passengers, and others on the road. Airbags are a good start. Yet more modern cars are so much more capable of keeping drivers safe.
What can you do to reduce teen auto insurance costs?
- The first year is a teen driver’s most important. A parent/guardian needs to take an active role in helping to establish good driving habits. These include how to handle a vehicle, show respect & courtesy to other drivers, and how to stay safe on the road.
- Many Insurance companies offer classes for teens. Successfully completing these can reduce rates. In addition, insurance carriers often offer discounts on insurance if teens maintain good grades.
- Many states have graduated driving programs. These limit the driving capabilities of younger drivers, particularly night time driving. Be sure your teen abides by these programs.
Naturally, we’re here to help answer your insurance questions and to make certain you and your teen always have the best insurance at the most affordable rate possible.