A A A

    Having a teen driver can be very expensive when it comes to insurance.

    by: Kevin Ransom | AOL Autos
     

    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.

    Quick Shopping Tools:

    Research New Cars

    Cars for Sale in Your Area

    Get Repair Estimates

     
    Discuss
    1 - 20 of 63 Comments
    ZK Feb 12, 2011 3:46 PM
    Wow! So much to know......Perceptions and Money, they narraow down the choices. KIM IN LIBERTY
    Report This
    solomonashby Dec 01, 2010 7:01 AM
    Actually buying a kid his own car is probably cheaper in the long run as the kid will be responsible for its maintenance and insurance. Also if he totals the car, the loss doesnt hit the rest of the family:) Source: http://hartfordauto.thehartford.com/
    Report This
    vlady1000 Nov 11, 2010 8:36 PM
    My 2 kids where not that much. They each had their own car, (a Mustang and a Probe) and just carried PL/PD. Honor students, no accidents, etc. I think the highest I paid was about $500/yr for each of their cars. Some of my friends where paying up to $3,500 for one of their kids (no so good kid) for full coverage. They would be riding a bike or skateboard, full time, before I would pay that.
    Report This
    larryrls Nov 11, 2010 8:14 PM
    State Farm has a safety video for your teenager to watch that will kick in a substantial discount.
    Report This
    jstans9508 Nov 11, 2010 4:52 PM
    Please ask your agent before following some of this advice. The laws vary by state, and some of these comments have the potential of costing you your home, up to 30% of your income for 10 years, your savings, 401K, college fund or any other assets. In most cases 100/300K is the bare minimum to carry if you don't have a home or any savings. The average jury award is over 286,000 in a serious injury or death. Umbrella is an excellent idea. You DO have to have you child on a policy if he is of driving age, whether he has a permit, license or not. Thoughts from a personal injury attorney...
    Report This
    lcthe2nd Nov 11, 2010 2:07 PM
    2 words: Umbrella Policy. Mommy & Daddy are responsible if the child is on your auto policy. Mommy & Daddy could be resposible (depending on what state you live in) if your child has his or her own policy but lives in your household, is dependent on you, you pay the childs policy premium. Lawyers go after the deepest pockets and $100,000 limit is not enough if somebody is hurt badly or is killed.
    Report This
    mlantz2000 Nov 11, 2010 1:55 PM
    I have 3 teens 2-18, 1-20 all driving their own cars. The secret is shopping around for coverage and buying "disposible" cars, ones <$1500. Carry only liability and uninsured.
    Report This
    jerseyshoreusn Nov 11, 2010 1:52 PM
    Its not going to cost me a bundle, its going to cost them a bundle....better start working now
    Report This
    afaceinthematrix Nov 11, 2010 1:44 PM
    "If you have a teenager thats close to driving age and youre planning to put the kid on your auto insurance policy, youd better start saving your spare change. Or maybe even take a second job." Are you serious? Get a second job? Why not have the kid get a job? I hate it when parents baby their teenagers and never teach them responsibility or how to grow up! Driving comes with responsibility and some never learn this. When I was a teenager, I had my own car (that I bought with the money I earned from my JOB), paid for my own insurance (which was quite high despite my good grade discount and safe diving), and paid for my own gas. Mommy and Daddy never did it for me and I wouldn't have expected them to.
    Report This
    croman761 Nov 11, 2010 1:29 PM
    Simple here... get the kid a permit, and let them have that until they are 18 or longer. You do not have to add them to your policy if they have a permit, only when they get the actual license. Then, make sure they drive every place you go. Once they are 18, put them in their own car, own insurance. The reason is that as a parent who gives a kid under 18 a car, can be held as having "negligently entrusted" the auto to the kid regardless of whose insurance they are on. To add my 18 year old daughter to my car (SUV) as a third driver with our $100k/$300k limits, it was going to cost me almost $500 a month. We bought her her own car and the insurance policy is $84 a month.
    Report This
    stevegeryk Nov 11, 2010 1:28 PM
    I recently switched to AAA for my auto insurance, and they offered all the discounts for the good grades, good driving record and so on. But one of the biggest discounts they offered was if my son took the Adept Driver course. Most of it is online, and there are exercises that you do with them while driving, and the cost was $75. Once my son comleted the online portion, I received anew auto bill in the mail that dropped my overall premiums about 20%. We now pay approximately 2100/yr total for 3 cars. It is well worth looking into.
    Report This
    xraybrain Nov 11, 2010 12:56 PM
    like my father said to me......want to drive a car.?....go get a job... and buy the car, insurance, gasoline and repairs yourself. what a nation of spoiled brats. by the time i was 22 i had saved enough and bought my owcar,,,which i took care of like it was my baby....BECAUSE,,,I worked for FIVE YEARS to get it
    Report This
    richardhelmes Nov 11, 2010 12:56 PM
    Put your kid on the oldest, cheapest, paid-for car you have, and drop the collision insurance (that covers your car if it's your fault) because it's expensive and doesn't make sense on a car that is not worth much. I am surprise this wasn't covered in the article, but then most of the time these so-called "experts" are usually off base.
    Report This
    stock43852 Nov 11, 2010 12:47 PM
    Not a big deal. $1200/ month is what I recieve in monthly income from my portfolio now at age 45. By the time I am 65 I will receiving $15000.00 per month. How? The Complete Dividend Plan. The top 10% of all Americans owns 90% of the country's net worth. That is a fact. It has been pre-planned to be this way for the past few decades by the elite of this country. You are either going to be part of that group or you will be part of the majority of Americans who will work like a dog until the day you die on the job. Learn the truth about why you are broke, how Wall Street and the financial media lies to you. Learn it now and start building real long term sustainable net worth today!! www.compdivplan.com
    Report This
    helyj Nov 11, 2010 12:43 PM
    If you son or daughter studies abroad, call you insurance company and don't cancel. You will end up with a break in insurance and it will cost more money when they reinstate as they will be coded as a new driver (again). You may be able to reduce limits during this period. This is one of those non-intuitive rules that allow them to charge more.
    Report This
    panth753 Nov 11, 2010 12:43 PM
    Or you can do what my parents did and make the kid for the whole thing. Not only does it teach responsibly, but it also teaches us to work for everything.
    Report This
    ost300 Nov 11, 2010 12:38 PM
    The vast majority of all of the postings are legitimate, and informative, however I would just like to ask those who choose to allow their personal opinions to the entire worl to please use spell check. It is embarassing and I do't even know any of you
    Report This
    szigtema Nov 11, 2010 12:30 PM
    spay and neuter your children, they will thank you for it one day...
    Report This
    gr8bsn Nov 11, 2010 12:26 PM
    "Call in big brother." - See, they get us used to it in the name of "safety" first, then when it becomes mandatory for everyone.. "but I've got nothing to hide" the sheep say...
    Report This
    texconn Nov 11, 2010 12:08 PM
    I have heard all of the stories. I was a claim rep for a major ins company for 31 years. Ins companies try to be fair on all claims but some time it appears to be not so. Juries are looking for available money more so than liability. The driver can be totally not at fault and the jury can give hefty awards to a seriously injured party. Wheel a quadriplegic into a court room and you basically throw liability out the window. Sometimes the ins co negotiates the demand. Unfortunately good teen age drives pay high rates because of the bad ones. My company added a 17 year old to his dads policy one day and the next day he killed his best friend in a single car roll over. We paid $100,000 (policy limits). Teens are bad drivers because of peer pressure and immaturity.
    Report This
    1 - 20 of 63 Comments
     
    Leave A Comment?
    Please keep your comments relevant to the Teenage Car Insurance Will Cost You A Bundle article.

    Latest Auto News

    Advertisement
    Mapquest Gas Sweepstakes

    Featured AOL Autos Editors

     
    Fetching latest post ...
     
    Fetching latest post ...
     
    Fetching latest post ...

    Great Auto Loan Rates

    Low Rates on New and Used Autos

    Presented By Apply In One Easy Step »

    AOL Autos Facebook Activity

    FIND A GREAT USED CAR

    Just Say - SHOW ME THE CARFAX
    Order Carfax Report
    Powered by
    Get a free CARFAX record check for a used car
    Go >>
    Follow AOL Autos on Twitter
    If you have a teenager that’s close to driving age and you’re planning to put the kid on your car insurance policy, you’d better start saving your spare change. Or maybe even take a second job.
    ABUSE REPORT

    From:

    Your Comment:
    Send Report Cancel