by Christy Bieber | Published on Sept. 20, 2021
Many or all of the products here are from our partners. We may earn a commission from offers on this page. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.
Parents may be shocked at the cost of adding a teen to their insurance.
For most parents, teen children learning to drive is both an exciting milestone and a nerve-wracking time.
It's not just the stress of having a child on the road that may worry parents. There's reason for concern about just how much auto insurance premiums will rise when they add a teen to their insurance plan.
While parents may be prepared for their car insurance costs to rise, it may still prove shocking just how much monthly costs increase when a young driver is added. Here's what parents need to know.
According to Car and Driver, auto insurance premiums for a 40-year-old driver with full auto insurance coverage go up an average of a whopping 152% if a 16-year-old motorist is added to a policy.
These costs do vary, depending on the gender of the teen driver. When a young woman is added to a parent's policy, average premiums go up by 129%, while premiums increase by an average of 176% for a male teen.
Regardless, parents can expect to devote much more of their income to auto insurance once a teen needs coverage. And this isn't surprising, given that the CDC reports young people are involved in a substantial number of accidents, and those collisions are often more serious than with older drivers.
There are a lot of reasons young drivers are prone to collisions, including a lack of driving experience, as well as the potential for dangerous decisions, such as not paying attention to the road while talking with friends. Since insurers know teen drivers are more likely to get into accidents that lead to insurance claims, they charge substantially more to insure them.
Although it's inevitable that auto insurance costs rise with a teen driver, there are steps that parents can take to mitigate risk -- and lower costs.
First, new drivers can complete a driver's education course, which can result in lower premiums. Parents can often apply for good student discounts if their child gets good grades and qualifies. And if parents are purchasing a car for their teen, they should compare the prices of insuring different vehicles before buying. Some vehicles have a better safety record and are cheaper to insure. There's seldom a reason to buy a high-risk car and add a high-risk driver at the same time.
Finally, parents can shop around for insurance coverage since they may not get the best deal from their current provider. The cheapest insurance for teen drivers may come from a different company. And with such high premium increases, every little bit can help.
Auto insurance is something that most people don't think about very frequently. While there are several factors that drive people to look to change auto insurance carriers, it is important to educate yourself in order to ensure you select the right coverage for you. The right coverage means not paying for coverage you don't need and not foregoing coverage that would make sense for your personal situation. While price is a major factor, we also consider other factors such as customer service and the claims process when choosing what we think are the best auto insurance providers.
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.
The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters.
Copyright © 2018 - 2021 The Ascent. All rights reserved.