Teen driver premiums

Asking your friends what they pay for car insurance will set you up for a shock when you go to buy your own. Even if you are the same age and drive the same model of car, premiums vary widely from state to state and even city to city.

You can get a good idea how rates in your area compare by using our ZIP code tool, which shows rates for a 40-year-old man driving a Honda Accord in every part of the country. Much of what you pay is based on where you live, so use it as a relative guide to rates in your area.

But you are not a 40-year-old man.

Young drivers are penalized with an "inexperience surcharge." Base rates for liability and collision coverage are multiplied by whatever factor their insurance company has calculated as appropriate to cover the risk of a new driver.

Also, every company does its own math. One may decide that inexperience should increase your rate by 150 percent. Another might increase your rate by just 120 percent.

In general, parents adding a teenage driver to the family policy should expect premiums to at least double. (See “What a teenager does to your insurance.”)

The higher the rates in your state, the more likely you can save money by shopping around. In our comparison-shopping engine, the average difference between the cheapest and next cheapest rates for drivers under 25 was more than $1,100 a year.

Here’s what else you need to know:

You can expect rates to drop a bit every year or two, depending on the insurance company, not just at age 25.
Grades matter. A good student discount can range from 5 percent to as much as 25 percent.
Tickets matter. Accidents matter. Because you are already paying higher rates, your premiums go up much more dramatically when surcharges are applied.
The car you are driving doesn’t matter as much as you think it does. The insurance company is more afraid of the risk a teen driver poses than of what he or she is driving. (See “The best cars for teens.”)
You must be added to the family insurance policy if you have a driver’s license, or your parents must specifically exclude you from their coverage.
If you have a car of your own, it’s usually cheaper to add the extra car to the family policy than to try to insure it separately.
If you will be behind the wheel of one of your family’s existing cars, your insurance company may automatically assign you to the most expensive one. Choose the cheapest family vehicle as your primary ride.