Adding a teen driver to your car insurance could, and should, stop you. Insuring an inexperienced driver can have a significant impact on insurance premiums.
Coverage used data from Quadrant Information Services to examine rates for all 50 states and DC. to understand the financial impact teen drivers have on their parents’ premiums. The results show that the impact varies significantly, depending on where the parents live and the sex of their adolescent children. Those living in Hawaii see the least increase, while Vermont residents show a substantial impact.
Reading: How much does car insurance increase with teenage driver
The national average premium after adding a male teen driver is $4,048, while the national average for females is $3,819. So why is it so expensive to insure teenagers? Statistically, younger drivers are more prone to accidents. insurers view teen drivers as high risk as inexperienced drivers do not bode well behind the wheel. This increased risk is passed on to policyholders in the form of higher premiums.
laura adams, personal finance expert and published author, explains,
“There are many factors that affect your auto insurance rate that you control, such as the type of car you drive and your driving record. But there’s not much you can do about your age or gender, which play a big role in how much you pay for coverage.”
adams says,
“Young drivers are statistically much more likely to be in an accident, especially young men. therefore, teen drivers are riskier to insure and are charged higher rates, even when they have a clean driving record.”
According to the new coverage study, parents can expect their car insurance premiums to increase by approximately 130% when adding a 16-year-old teen driver.
In most states, there is a significant rate impact from adding a teen driver to an auto insurance policy, but there are things parents and teens can do to offset these increases.
how much does it cost to add a teenager to car insurance?
On average, a parent’s premium is significantly affected after adding a teen, even without adding an additional vehicle to their auto insurance policy.
That 130% rate increase we mentioned earlier means parents pay an additional $2,300 in annual premiums for insurance coverage. however, costs depend on a variety of factors, including state, teen’s gender, policy coverage, and more.
For simplicity, we’ve chosen not to differentiate rate increases when adding a vehicle, as car make and model also affect premiums. still, coverage can help parents get a rough idea of what they’ll pay.
The following sections discuss the impact of adding a teen driver in each state.
average policy rate by state
On average, the state with the highest increase is Vermont, where the average premium increases 216%, from $1,130 to $3,565 a year. The state with the smallest increase is Hawaii, where the average annual premium increase is just 4%, from $1,230 to $1,275.
Parents can see from the chart and interactive map that Hawaii is the big exception to the rule, mainly due to its local laws. Hawaii state law does not allow differences in insurance ratings based on a person’s age or length of driving experience (and other criteria such as gender and race).
michigan posts the next lowest rate increase (83% average increase) and new york ranks third overall (92% increase). Those states can be surprising as both generally offer relatively expensive auto insurance premiums. But Laura Hall, director of communications for the Michigan Department of Insurance and Financial Services (DFIS), says part of this is due to parents seeking coverage. she says,
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“It pays to shop around when adding a teen driver to a policy. difs recommends that all drivers shop around for coverage because the rates insurance companies charge can vary dramatically.”
Parents can expect their premium to more than double if they live in any state other than Hawaii, Michigan, and New York.
hall had some additional tips to help parents keep their policies as affordable as possible;
“Take advantage of the lower insurance rates teens receive as a result of being added to their parents’ auto insurance policy as secondary drivers. Also, when shopping for a teen driver’s first car, keep in mind that the type and value of the car you drive can make a big difference in the premium you pay. And make sure you take advantage of all the discounts your insurance company offers.”
To help parents understand the impact of adding a teen driver, the chart below indicates the difference compared to average premiums by state without a teen. To compile the data in this table, coverage used a male teen driver profile for the sample rates. Parents generally pay less than the amounts shown here if they insure a daughter.
average car insurance rate increase after adding a 16 year old male driver
quadrant information services, 2020
how gender affects auto insurance rates for teen drivers
male drivers tend to be riskier in the eyes of insurance underwriters. In 2017, the most recent year for which these data are available, the Centers for Disease Control and Prevention (CDC) reported that the fatality rate among male teen drivers was twice that of female teen drivers. Because of this increased liability, it makes sense for insurance providers to charge more to cover them.
mississippi has the largest premium difference when insuring a male teen vs. a female teen. In this state, fathers are likely to pay an average of an extra $735 a year to insure a man. coverage found that parents can expect about a 30% increase in premiums in several other states. if parents live in one of the states that have a high gender weight in insurance scores, they can expect to pay at least a few hundred more to insure a child.
however, in massachusetts, montana, and pennsylvania, there is little difference in premium between the two genders.
The top five states where adding a 16-year-old male increases auto insurance rates the most (by percentage) are:
- vermont: 216%
- Tennessee: 194%
- ohio: 186%
- Virginia: 176%
- West Virginia: 172%
- Hawaii: 4%
- Michigan: 83%
- new york: 92%
- district of columbia: 107%
- del: 114%
- vermont: 190%
- Tennessee: 158%
- massachusetts: 155%
- virginia: 154%
- ohio: 153%
- Hawaii: 4%
- new york: 79%
- Michigan: 80%
- del: 92%
- South Dakota: 94%
- Louisiana: $5988
- florida: $5362
- new york: $5,264
- nevada: $5,116
- rhode island: $4888
- Hawaii: $1275
- idaho: $2372
- North Dakota: $2,581
- iowa: $2592
- Wisconsin: $2720
- Louisiana: $5787
- florida: $4949
- new york: $4,914
- nevada: $4858
- michigan: $4,759
- Hawaii: $1276
- idaho: $2165
- iowa: $2226
- North Dakota: $2,255
- main: $2356
- $100k bodily injury liability per person
- $300,000 bodily injury liability coverage per accident
- $100k property damage liability coverage per accident
- $500 collision coverage deductible
- $500 full coverage deductible
The five states where adding a 16-year-old male increases rates the least are:
The top five states where adding a 16-year-old female increases auto insurance rates the most (by percentage) are:
The five states where adding a 16-year-old female increases rates the least are:
The top five states where adding a 16-year-old male increases auto insurance rates the most (per premium) are:
The five states where adding a 16-year-old male increases rates the least are:
The top five states where adding a 16 year old female increases auto insurance rates the most (per premium) are:
The five states where adding a 16-year-old woman increases rates the least are:
the cost difference of adding a male vs. female teen driver
Clearly, some states give more weight to gender when insuring teen drivers. In general, parents who live in a state that considers teenage boys to be riskier can expect to add another 30% to their premium.
If you’re insuring a daughter, parents will be happy to know their rates will be substantially lower.
Here’s a quick look at states where adding a male or female teen driver will hit parents’ budgets the most and least.
the top five states with the largest difference in premiums
the top five states with the smallest difference in premiums
saving tips to insure teen drivers
Given the data presented above, it’s natural for parents to look for opportunities to find additional savings. Coverage below provides advice on discounts that can save on insurance costs and when parents can expect the increases to taper off over time.
good discount for students
Many auto insurance companies reward teens for good grades. If your child maintains at least a B average and is enrolled full-time in high school or college, you can usually get this discount.
This type of discount ranges from 7% to 25%.
discount away from home
If your child is moving for college (at least 100 miles), they may qualify for a discount. This is because they don’t drive as often and don’t pose as much of a risk to the insurance company.
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The savings provided by this discount vary greatly depending on the insurer and how far your student is moving.
safe driving programs
Some providers also reward teen drivers for taking programs to improve their driving skills. this includes a defensive driving course. Before taking the class, check with your provider to see if this discount is available in your state.
This extra step toward safety can help you save about 8%, assuming the discount is available with your insurer in your state.
using a monitoring app or device
car insurance companies are looking for more accurate data on drivers; That’s why programs like instant progressive are offered. With these programs, you download an app or connect a tracking device to your vehicle. The device measures miles traveled, driving style and hours of the day traveled. If your teen doesn’t drive often, you could save big.
In fact, you may be able to save up to 20% with this technology.
discount for several cars
Many providers offer discounts if you insure multiple cars on your policy. If you’re planning to buy a vehicle for your teen, adding it to your policy could help you save. It’s important to check with your insurance company to make sure you qualify for the discount.
ask for other options
When adding your teen to your policy, ask your provider if other discounts are available. this is also a good time to do some comparison shopping to see if you might get more discounts or a better deal from another carrier.
how long will it take for these premiums to decrease?
Increases in premiums for insuring a teen driver can seem overwhelming. Fortunately, these rate increases won’t last forever.
as adams explains, “if a young driver avoids accidents and traffic tickets, their car rate should go down every year until age 25 or 26, when it becomes less of a risk for an insurer.”
The rates at different ages are shown below to highlight that rates will decline over time once the teen has a few years of safe driving under their belt.
Please note that fare reductions are based primarily on driving experience. If a teen starts driving at 18, their rate will likely be higher than that of an 18-year-old who started driving at 16. That said, the older a person gets, the less risky insurers are to be behind. of the steering wheel.
the takeaway
Even if parents add a 16-year-old driver to their policy, they can still save money by encouraging safe driving. Teens should be reminded that safe driving is the best way to keep premium increases to a minimum.
“Adding a teen driver to your auto insurance policy can be expensive. a minor crash can increase costs. but there are some things you can do to keep costs down,” says ray farmer, president of the naic and director of the south carolina department of insurance.
“A great way to save money, and lives, is for teen drivers to drive safely! Many companies give discounts to drivers whose records have been clean for three years or more, which means a driver can save by keeping their driving record free of speeding tickets or accidents.”
continues, “Parents should enroll their teens in a defensive driving course. Not only is this a smart way to get your teen ready to drive, but some companies offer discounts if your teen completes one. You should also encourage your teen to maintain a good grade point average in school. many insurance companies offer discounts or preferential rates for teenagers who maintain good grades”.
methodology
Coverage uses 2020 data from Quadrant Information Services to analyze quoted rates for thousands of ZIP codes in all 50 states. Rates quoted are based on the profile of a middle-aged married couple with a clean driving record who add a 16, 20 or 25 year old driver to their insurance policy who was licensed at age 16. The family drives their Toyota Camry 12,000 miles a year with the following premium details assumed:
These rates should be used to inform your auto insurance buying process, but your quote will be different.
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