Getting a teen driver behind the wheel is an exciting milestone, but it also comes with a financial reality check: soaring car insurance premiums. The cost of insuring a teenage driver can be significantly higher than for more experienced motorists.
Which begs the question, exactly how much is car insurance for teens?
Several factors contribute to these elevated rates, from inexperience and higher risk to the type of vehicle and coverage selected. This article will break down the key elements affecting teenage car insurance average costs per month and offer tips to help you navigate this expense.
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What is car insurance for teenagers?
Car insurance for teenagers is a regular car insurance policy for teen drivers. It offers the same protections as other car insurance policies but is more expensive than most car insurance policies.
Teens typically have higher insurance premiums because they are more prone to accidents. Teens are three times more likely at night to get involved in a fatal crash than drivers aged 30-59. They have less experience behind the wheel which can increase the risk of getting into an accident.
Instilling good driving habits are critical and far more important than having a good insurance policy for your teen. However, your teen can get involved in an accident because of the other driver. This guide will walk you through how much car insurance for teens costs, the different types of policies, and ways to lower your premiums.
The average cost of car insurance for teens
Teenage car insurance average costs per month can range between $119 to over $1,000 depending on the driver’s exact age and the state where they live.
One estimate suggests the teenage car insurance average cost per month is $532 per month. However, the cost of a teen’s car insurance can be significantly reduced if the policy is added to an adult’s policy. If one of the teen’s parents includes them in their existing car insurance policy, the policy becomes more affordable.
The average cost of car insurance also depends on the teen’s age. As a teen gets older, that individual is less likely to get into a car accident. A 16-year-old teenager will have to pay higher premiums than an 18-year-old. Insurance companies set premiums based on the level of risk. Since risk wanes as teens get older, so do the premiums.
5 Factors that affect the cost of car insurance for teens
Insurance companies look at several factors when reviewing applications and deciding on premiums. Knowing the factors can help you secure lower premiums and know what to expect when reaching out for a quote.
1. Age
Older people are less prone to accidents than teenagers due to their years of experience on the road. However, if you are in your 60’s or over, you can end up with higher premiums. Car insurance premiums tend to increase when you turn 60.
2. Gender
Insurance companies charge higher premiums for male drivers than female drivers. Statistically speaking, women are less likely to file car insurance claims than men. According to the Insurance Institute for Highway Safety, men tend to drive more miles and get into more accidents than women.
3. Location
Insurance companies look at a driver’s location to assess the risk. Someone driving on open rural roads is less likely to get into an accident than someone driving in a busy city. It’s also more expensive to get repairs in a city, which could lead to higher premiums. Insurance companies could also look at an area’s level of crime and other factors when determining premiums.
4. Type of car
More expensive cars cost more money to repair and present a greater risk to the insurance company. A high-end sports car will have higher premiums than a more affordable car.
5. Driving record
Drivers who have gotten into accidents before could be charged higher premiums. However, if you have exhibited good driving habits and have not gotten into any accidents, you could score lower premiums.
Different types of car insurance coverage available for teens
Car insurance is an umbrella term for various types of car insurance policies. If you look underneath the umbrella, you will find multiple policies, each with its own levels of protection.
1. Liability insurance
This required policy offers financial protection from bodily injury and property damage. The policy financially protects the driver, passengers, and vehicle damages that you cause.
2. Collision insurance
This optional policy offers financial protection if your vehicle is involved in a collision with a structure (i.e., wall) or another vehicle. This policy may be required if you are still making loan or lease payments for your car.
3. Comprehensive car insurance
Comprehensive car insurance covers instances outside of accidents, such as fires, vandalism, mudslides, and other incidents. This is an optional insurance policy, but some lenders may require it if you do not yet own the vehicle free and clear.
4. Personal injury protection
Personal injury protection offers financial safeguards for medical costs related to an accident. Some states require this policy, but it is not available everywhere.
5. Uninsured/underinsured motorist (UM/UIM) coverage
This policy offers financial protection if you get into an accident with an uninsured driver who cannot cover your expenses with their policy. It is available in every state and is required in some of them.
Help your teen get a high driver score
Insurance policies cover financial damages, but accidents can lead to permanent injuries and become life-altering events. Driving a car gives teens more independence, but parents can and should keep a watchful eye over their children. Offering advice and giving them practice can help and complement the efforts of driving schools.
Some driving schools use a driving score to assess how a teen manages themselves behind the wheel. Driving scores measure a driver’s skills around braking, accelerating, speeding, phone usage, and other factors.
A high driving score can make a parent feel more confident about their teen being on the road. However, a high driving score can also result in lower insurance premiums. Some insurers give teen drivers a discount if they have good driving scores. If insurance companies feel more confident that a driver will never claim the policy, they tend to offer lower premiums.
8 Tips for lowering the cost of car insurance for teens
Securing a less-expensive car insurance policy for your teen lets you keep extra money in your pocket. Following these tips can make car insurance more affordable.
1. Research and compare insurance companies
Don’t accept the first quote you find. Shopping around for multiple car insurance policies can help you compare premiums and coverage. You can use multiple offers to give yourself leverage in a negotiation.
2. Consider adding a teen driver to your current policy
Adding a teen driver to your current policy is more affordable than giving your teen a separate policy. You can save hundreds of dollars each month from the discounted premiums.
3. Encourage good driving habits
Encouraging your child to practice good driving habits can keep premiums low and help with future insurance policies. While this step is useful for car insurance policies, it’s more important to keep your teen safe.
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4. Take a defensive driving course
Insurance companies may offer discounts for teens who have completed defensive driving courses. These courses give teens practical insights to become better drivers, thus lowering the insurer’s risk.
5. Choose a safe and practical car for your teen
Safer and more affordable cars get lower insurance premiums. Giving your teen a high-end sports car will result in higher premiums and increase the insurer’s risk.
6. Increase your deductible
A higher deductible means you have to pay more money out of pocket before the insurance company takes over. While this increases your risk if you have to file a claim, it also results in a lower premium. You should consider how much risk you want to incur to secure a lower premium.
7. Look for discounts
Some insurance companies offer discounts and teaser rates to get more policyholders. You can look for these opportunities and get a car insurance policy for your teen at a more reasonable price. You can also get a discount by paying multiple months of premiums upfront instead of making monthly payments.
8. Re-evaluate your policy every year
Drivers should periodically review their policies to see if they are getting enough coverage and paying fair premiums. As your teen logs more years of safe driving, the premiums should decrease. If that does not happen, you should consider calling the insurer to see why the premiums have not changed or look for another insurance provider.
Getting Car Insurance for Your Teen
Insuring a teen driver can be a financial challenge, but understanding the factors that influence premiums can help you find the best coverage at a reasonable price.
By exploring different insurance providers, taking advantage of discounts, and encouraging safe driving habits, you can work towards mitigating the cost of car insurance for your teen. Remember, while the initial expense might be high, responsible driving can lead to lower rates in the future.
FAQ
Why is car insurance more expensive for teens?
Car insurance is more expensive for teens because they have a higher likelihood of getting into accidents. Insurance companies set premiums based on the level of risk.
Is it more expensive to insure a teen boy or a teen girl?
It is more expensive to insure a teen boy. Car insurance policies are more expensive for men in general than women, assuming everything else is equal.
How long will a teen driver have higher car insurance rates?
A teen driver may have higher car insurance rates for a few years, but premiums tend to drop when the teen turns 18 or 19. The rate of the premium drop also depends on the teen’s driving behavior and other details.
How much does it cost to add a teenager to car insurance?
It’s generally cheaper to add a teenager to an existing policy than to buy one on their own. The average cost of adding a teen to an existing policy is about $3,000 a year. But this can vary greatly depending on your situation and the state you live in.
