Teens Make Car Insurance Costs Skyrocket

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Parents who are looking to add a teen to their car insurance policy need to be prepared to pay.

According to data from Insurance.com, a one-car family's average annual insurance premium increased an average of 44% when a teenage driver was added to the policy. Quotes increased from $1,418 to $2,039, a difference of $621 per year.

Two car-families experienced an average increase of 58%, with quoted policies spiking by $1,064 a year. Three-car families, where teens can be expected to drive more often, especially if they have a car of their own, had it the worst; Policies skyrocketed an average of 62% or $1,421 a year.

The data was obtained by analyzing car insurance quotes provided to Insurance.com users from October 2009 to September 2010. The average rates above are for a policy with coverage for $100,000 of bodily injury per person per accident, $300,000 of total bodily injury per accident and $100,000 of property damage per accident.

According to the website, parents who try to circumvent these increases by putting their teen on their own policy end up paying even more. The average annual rate quoted for a teen driver is $2,267, a figure that pales in comparison to all three increases a family would experience should they add their child to an existing policy.

Such high prices are due to the level of risk associated with teen drivers. According to the Centers for Disease Control and Prevention, drivers age 15 to 19 are four times more likely to crash than older drivers. The risk is highest for 16-year-olds, whose crash rate is twice as high as 18- and 19-year-old drivers.

However, even teens with clean accident records face high car insurance rates for several years due to their lack of driving experience. Rates typically begin to decline at age 25 where the average insurance quote for drivers was $1,707. Middle-aged drivers enjoy the best rates, but at around age 65, the average annual premium creeps back up again. You can check here for a comprehensive breakdown by age group.

Parents do have some options for getting lower quotes for their teen drivers. According to Insurance.com, families can try the following:

  • Comparison shop for auto insurance from multiple companies before settling on a policy.
  • Find an insurer that offers a good student discount. Most insurers offer discounts for students who maintain at least a 3.0 grade point average.
  • Enroll your teen in a safety driving class, as many insurers offer discounts for the completion of a driver education course.
  • Choose a car that is less inexpensive to insure. Generally speaking, luxury cars, sports cars and SUVs net higher insurance policies.

Check out this MainStreet article for the safest and most affordable cars for teens.

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