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.
Boise City, Idaho
Apple Valley, Minn.
Black Forest, Colo.
Des Moines, Iowa
Vestavia Hills, Ala.
Briarcliff Manor, N.Y.
College Park, Md.
Orange Park, Fla.
Culver City, Calif.
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.
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 a good student discount. (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.
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.