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What a teenager does to your car insurance rates

Des Toups

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CarInsurance.com

What a teenager does to your car insurance rates

If you're lucky, your car insurance premiums will only double when your teenage son hits the streets.

The impact of a teen on car insurance rates is one of the most common questions we receive at CarInsurance.com. And the answer is almost always, "It depends." No two households are alike, and so many factors go into rates that any answer is really a guess. 

To get some clarity, we ran comparative insurance quotes in 25 states for otherwise identical families: a father, 49, and a mother, 48, driving a financed 2009 Toyota Camry and a paid-off 2004 Ford Expedition, both with full collision, comprehensive and liability coverage, and no violations or accidents. They live in middle-class suburbs and commute to white-collar jobs.

Then we added a teenage boy to the mix.

Your car insurance is going up

In Scottsdale, Ariz., Culver City, Calif., Black Forest, Colo., Hartford, Conn., and Alexandria, Va., our family's car insurance premiums tripled or worse. The average increase across our 25 cities was 156 percent.

In dollar terms, that meant an increase in six-month premiums of $505 in Des Moines, Iowa, and $2,854 in Culver City. The average dollar increase was $1,014 every six-month rating period.

And that's making the very favorable assumption that you shopped around and got the lowest possible premium when your teenager joined the policy. When rates rise this much, the penalty for failing to shop around grows exponentially: If our family had settled for the second-lowest rate as they added their teenage driver, their six-month premiums would have averaged $480 more.

City No teen W/ teen Increase Difference
Berwyn, Pa. $356 $941 164% $585
Boise City, Idaho $370 $998 170% $628
Apple Valley, Minn. $377 $994 164% $617
Black Forest, Colo. $390 $1,167 199% $777
Alexandria, Va. $433 $1,349 212% $916
Columbus, Ohio $438 $1,197 173% $759
Athens, Ga. $474 $1,043 120% $569
Des Moines, Iowa $482 $987 105% $505
Scottsdale, Ariz. $483 $1,659 243% $1,176
Aurora, Ill. $484 $1,359 181% $875
Olathe, Kansas $489 $1,171 139% $682
Germantown, Tenn. $518 $1,423 175% $905
Midvale, Utah $539 $1,440 167% $901
Irving, Texas $573 $1,316 130% $743
Sherwood, Ark. $597 $1,351 126% $754
Vestavia Hills, Ala. $610 $1,402 130% $792
Briarcliff Manor, N.Y. $677 $1,697 151% $1,020
College Park, Md. $774 $2,221 187% $1,447
Seattle, Wash. $847 $1,963 132% $1,116
Orange Park, Fla. $926 $2,096 126% $1,170
Gonzales, La. $1,005 $2,283 127% $1,278
Northville, Mich. $1,015 $1,965 94% $950
Hockessin, Del. $1,048 $2,268 116% $1,220
Hartford, Conn. $1,053 $3,163 200% $2,110
Culver City, Calif. $1,230 $4,084 232% $2,854

But wait, there's more!

Remember the whole "it depends" part? Your actual rate increase even after a teenage meteor strikes your policy could be less. You might drive a car that insurers like more, or live in a city with fewer thefts, or drive fewer miles. But you could pay more -- much more -- as well.

A teen with a clean record is very different from a teen with a black mark like an at-fault accident.

A 16-year-old gets traffic tickets at a rate 1.8 times that of the average driver, the National Highway Transportation Safety Administration (NHTSA) says. He's 3.7 times more likely to be involved in an accident. Once he has had one accident, NHTSA data show, he's 50 percent more likely than even other 16-year-olds to have another.

That makes insurance companies cringe.

We sampled five cities by adding a rear-ender with $3,500 damage, courtesy of our 16-year-old. Rates on the cheapest policies rose about 25 percent, but those on the more expensive policies rose much, much more -- in some cases doubling. That's an insurer who does not want to insure your teenager.

How can a parent lower car insurance rates?

First, shop around. The more you pay for insurance, the more likely it is that you can save money. Every insurer prices its coverage differently, and what might be cheaper for your neighbor might not be cheaper for you. You can compare auto insurance quotes online or by calling several agents.

It's simply your best shot at saving money, and the payoff for a few minutes of work could be hundreds or even thousands of dollars.

Why concentrate on comparison shopping? Because the next best way to save money is hoping that your child gets grades good enough to grab discounts for teenagers. (A few minutes on the Internet seems almost painless now, right?) In general you can expect to save 10 percent to 15 percent if your insurer offers a good student discount at all.

Third, buy the right car. The cheapest vehicles to insure are typically minivans. Good luck! But with that as your opening gambit, a rental-grade sedan will seem like a Ferrari to your teen. If it's old enough to get by with only liability insurance, so much the better. (See "The best used cars for teens.")

Lastly, there are no real tricks. State laws vary, but in general:

  • All licensed drivers in a household need to be added to a policy. If you don't, your insurer may not cover an accident or other claim, or it may cover the claim only if you pay the additional premium it would have charged you.
  • Some states allow a licensed teen to be excluded from your policy. Others don't.
  • Most states will not allow a teen to title a car in his own name.
  • Even if your state has no age restrictions on titling a car, he is unlikely to find insurance by himself. It's a contract, and he's not old enough to sign one yet.

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2 Responses to "What a teenager does to your car insurance rates"
  1. toro

    This was really helpful.

      Reply»  
  2. Seattle car insurance

    Superb post! I have read your post, I have been trying to research this topic for a long period of time.

      Reply»