If you have a teenager that’s close to driving age and you’re planning to put the kid on your auto insurance policy, you’d better start saving your spare change. Or maybe even take a second job.

Adding a teen driver to your policy will typically increase your insurance premium by 44 percent, according to a study recently released by Insurance.com. And that’s if you’re only a one-car family. If you have two vehicles, adding a teen can raise your premiums by a potentially budget-busting 58 percent, and a three-car-family is looking at a whopping 62-percent spike.

The study was based on Insurance.com’s analysis of car insurance quotes provided to users from October 2009 to September 2010.

Risky Business

This, of course, is because teen drivers are among the riskiest group to insure. According to the Centers for Disease Control and Prevention, drivers aged 15 to 19 are four times likely to get into a crash than older drivers – making car crashes the number one cause of death for teens.

“The first time I saw those statistics, I was as surprised as anyone else in the general public,” says Kat Zeman, spokesperson for Insurance.com. “But, people in the insurance industry are accustomed to seeing those statistics."

Even teens with spotless driving records are looking at high rates for several years, just due to their lack of driving experience, says Zeman. At age 25, rates typically begin to decline, and middle-aged drivers have the lowest rates. They don’t start creeping up again until age 65

“Insurance companies base their premiums on risk, and since teens are such a high risk to insure, as a group, your premiums are just going to jump up as a result,” says Zeman. “And since teens don’t have much driving experience, and are more easily distracted, they’re going to have higher accident rates.”

What Can You Do?

There are steps you can take in order to lower your premiums, both before and after the inevitable day when you add your teenager to your insurance policy.

1. Keep Your Driving Record Clean

The best way to keep your premiums down is to make sure your teen maintains a good driving record, meaning no tickets and no crashes. One of the best ways to do that is to make them take a driver’s training class. This is an addition to whatever driver’s ed course they may have taken in order to get their driver’s license.

“If a teen takes one of those classes, and you can document that to the insurance company, that’s telling the insurer that the teen is doing everything they can to try to be safe, and learn responsibility,” says Zeman. “Sitting them down and giving them a pep talk about what a big responsibility driving is, and the importance of safe driving, can also help them in this respect.”

Average Auto Rates By Age

Age groupAverage rate
16-19$2,999
20-24$2,040
25-29$1,707
30-34$1,591
35-39$1,610
40-44$1,603
45-49$1,478
50-54$1,284
55-59$1,214
60-64$1,169
65-69$1,244
70-74$1,187
75-up$1,203

Source: Insurance.com

2. Safety First

Always wear your seatbelt, and make sure your teenager does too. Maintain your vehicle even more diligently than you might otherwise when a teen is using it, as you don’t want a mechanical problem or worn tires to contribute to an accident. Also make sure your vehicle has safety features like anti-lock brakes and an anti-theft device. These features can also reduce your insurance quotes, offers Zeman. Some insurance companies give discounts for seatbelt use, as well.

3. Hit The Books

Students with good grade point averages in school can sometimes receive a discount. Call your insurer to see if they offer one.

“The thinking there is that if the teen is responsible in school and studies hard and gets good grades, then he or she will probably be more responsible on the road,” Zeman notes.

4. Call In “Big Brother”

This one may sound a bit draconian, but some insurance companies will offer a discount if you install a monitoring device in the vehicle that includes a GPS tracking device. Then you can see exactly where your teen is by logging on to a web site. These devices also have built-in sensors that detect things like sudden braking, sudden acceleration, etc.

Another type of monitor is a camera installed inside the vehicle that records what is going on both inside and outside the car. The camera only activates itself when sensors detect risky behavior, like hard braking or the aforementioned sudden acceleration, or abrupt swerving – and in the event of a collision.

“If you agree to install a device like one of these, you can save 10 to 15 percent on your premium,” advises Zeman.

5. Don’t Buy Your Kid A Car

Insurance.com’s study also yielded this bit of shocking data: Buying a car for your teen and setting him up with his own insurance policy will result in an even bigger hit to the bank account, with the average annual insurance rate for such running $2,267. (This average includes all liability coverage levels.) That’s compared to an average cost increase of $621 for adding your teen to your own policy.