Why Is Auto Insurance More Expensive for a Teenager?
It costs a lot to raise a teenager, but luckily there are ways to save on how much you’re spending.
One of the times “raising a teenager expenses” go up is when your young adult starts to drive. No matter how well and safe they have been taught to drive, having a teen behind the wheel is likely to cost more in car insurance than you may have anticipated.
That is often enough to leave parents with a simple question: Why is insurance more expensive for a teenager? By getting the right answers, you can satisfy your curiosity and save a bit of money along the way. Keep reading to discover everything you need to know about why coverage for a teenager is more expensive.
Why Car Insurance Is So Expensive for Young Drivers
Why is car insurance so expensive for teen drivers? Insurance premiums are higher for young drivers due to a variety of factors. By learning what these factors are, you can better understand why your monthly payment has dramatically increased.
Young Drivers and Accident Rates
The primary reason automobile coverage for teenagers is so expensive is that young people get into more car accidents than older drivers. As drivers mature and get used to handling vehicles, they become far less likely to get into a wreck. As a collective group, it’s expensive to offer insurance to younger people because they file more claims than any other age group. This higher expense finds its way back to the policyholder.
The Impact of an Unproven Record on Insurance Rates
It may not seem fair that new driver insurance is so expensive for your teen, especially if they are a very good driver. However, in the eyes of insurance carriers, teenagers have an unproven driving record. In other words, carriers do not know how dangerous a young person is behind the wheel until they are a more established driver. Until that happens, carriers will play it safe and charge a higher amount because teens are statistically likelier to be in a crash. To learn more, be sure to brush up on teen driver laws and stats.
The Role of Distracted Driving in High Insurance Rates
Distracted driving is a major cause of car crashes because drivers are doing things like sending texts, fiddling with the sound system and otherwise not paying attention to the road. Teens are especially bad at this: 9% of all fatal accidents for drivers aged 15–20 are caused by distracted driving. Once again, when a group is statistically likelier to make dangerous mistakes on the road, they will always be charged a higher premium.
How to Lower Your Teen’s Car Insurance Premiums
The simple fact is that insurance for a teenager is likely to be higher than the same coverage for adults. So exactly how much is insurance for a 16-year-old? The average monthly cost of full coverage for this age bracket is $515. How much is insurance for an 18-year-old? At that age, the full coverage average cost jumps to $625.
However, by age 20, it begins to drop, coming in on average around $419. By 25, it’s down to $284, close to the average most more mature drivers pay. But keep in mind: Rates only drop for drivers who have clean records with no claims. Something you may want to hammer home with your young driver.
Fortunately, you may not have to pay those high prices. There are a few proven techniques that can help you keep your teen’s car insurance cheap.
Role of Safe Cars in Reducing Insurance Costs
Even though teenage premiums are always higher, another factor that carriers take into consideration is the type of vehicle the person drives. In short, the safer the car (be sure to research safety ratings before buying anything), the cheaper the coverage.
On a related note, you should consider letting your teen drive an existing family vehicle. The carrier will consider them a part-time driver of an already-insured vehicle, and that increases premiums far less than making the teen a full-time driver of a new car. Either way, they can help keep the car as safe as possible with these maintenance tips for their first car.
Leveraging Good Grades for Insurance Discounts
There are many ways to get discounts on coverage. One method that favors younger drivers is maintaining good grades. Be sure to speak with your carrier: In most cases, they will offer a discount if a student can verify (typically via a report card) that they have maintained a certain GPA. Keeping grades up is just one of the pieces of advice to give your child before they get behind the wheel.
Defensive Driving Courses and Their Benefit
Another proven method that can lower the cost of insurance for everyone is taking a defensive driving course. Completing such courses essentially proves to the carrier that someone is serious about being safer than the average driver. Not only can teens benefit from this discount, but taking the course at a young age can give them increased driving skills and confidence when they need it the most … always important before your teen gets behind the wheel.
Frequently Asked Questions
Does My Teenage Child Need His Own Car Insurance Policy?
Your teenage child does not need their own policy. In fact, you can keep them on your policy without any additional fees until they are 24. You can even keep them on there indefinitely; there will be added fees, but the actual cost of coverage naturally decreases as they get older.
When is the Right Time to Add My Teen to My Car Insurance?
It is best to speak to your carrier before your teen gets their learner’s permit. The carrier may allow them to be on the policy for free until they are a licensed driver. Either way, the most important thing is to make sure they are covered before they begin driving.
What Coverage Options are Available for Teen Drivers?
Teen drivers have the same coverage options as adult drivers. This includes liability (which all California drivers are required to have), collision, and comprehensive coverage. It may be tempting to get all three (known as “full coverage”), but the costs will be much higher.
At What Age Does Car Insurance Become Cheaper?
In California, policies start becoming cheaper when drivers are 20. The average cost of full coverage drops to $419, down from the $625 it costs when drivers are 18. The costs do not drop significantly until drivers are 25 years old, at which point it drops to $284.
What are the Consequences of a Teenager Getting Citations or Traffic Tickets on Their Car Insurance Rate?
Teen drivers, like all drivers, will likely see their insurance rates become more expensive if they get speeding tickets or other moving violations. As far as the carrier is concerned, such incidents serve as tangible proof that the driver is a riskier investment, and they increase the costs of insuring them accordingly.
The Affordable Auto Coverage Choice for You and Your Teen
Now you know why auto insurance is more expensive for a teenager. But do you know where you can find the most affordable premiums without sacrificing the level of protection your child deserves?
Here at Cost-U-Less Insurance, we specialize in making driving safer for teens as well as making premiums more affordable for you as parents. Ready to see what we can do to protect your family without breaking the bank? Call us at (800) 390-4071 or get a fast and free car insurance quote online. You can also find a Cost-U-Less Insurance office near you.
