An Independent Agent Explains:
Auto insurance for teenage driversThis post is part of a series of insurance blogs on Safeco.com showcasing the expertise of local independent agents and aimed at helping you understand important insurance coverage and issues.
As much as you've been waiting for this moment, you've been dreading it, too: your teen has passed the state driving test and is now an officially licensed driver. You no longer have to taxi him or her to school, to practice, or to friends' houses.
But, your newfound convenience isn't without concern. Of the many things you worry about with your young driver, including your child's safety, high on the list is the cost of insuring your teen. So, let's take a look at what goes into teen car insurance rates so you can better understand what may be awaiting you.
Do Teenage Drivers Increase Car Insurance Rates?
In most cases, yes. After all, you're extending your coverage to another driver, and that typically costs more. And, not just any driver, but an inexperienced one.
The direct impact on your car insurance rates can vary depending on the state where you live. That said, most states allow insurance companies to utilize the following factors in pricing coverage for a young driver:
- Male or Female: Premiums are often driven by statistics. Unfortunately, this does not bode well for young male drivers. According to the Centers for Disease Control and Prevention (CDC), in 2013 the motor vehicle death rate for drivers and passengers ages 16 to 19 was almost twice as high for males vs. females.
- Primary Driver: If your teen has her own vehicle, she will likely drive it more often than if she were sharing it. More time behind the wheel can mean higher rates, as your teen has gone from an occasional operator with limited use to a primary operator.
- Type of vehicle: The make and model of a vehicle always impacts your car insurance costs. If it's a high-end vehicle, you can expect to pay more, particularly for an inexperienced driver. Always check how much a vehicle will cost to insure for a teen driver before you plunk down the cash for it.
Ask for Discounts for Your Teen Driver
It's true teen car insurance rates can be pricey, so be sure not to overlook opportunities to save. Your independent agent can help you better understand potential discounts that may be available to you. Here are a few common ways to save on teen car insurance, but these can vary by carrier:
- Drivers education: Knowledge is power so many insurance carriers will provide a discount if a newly licensed driver takes a driver's education course. Ask your independent agent which courses may qualify you for a discount.
- Good student: Most insurance companies provide a discount for students who have at least a B average. This may need to be verified each year, so be sure to keep a copy of the latest report card handy, given that this credit can be as much as 20 percent.
- Electronic monitoring: Some insurance companies offer a discount if you adhere to safe driving habits as verified by an electronic monitoring device that plugs into your car's diagnostic port. In most cases, monitoring only lasts for a specified period, and you have access to the data collected.
- Away at school without a car: If your young driver attends a boarding school or college more than 100 miles away, be sure to tell your insurance company. There is typically a large credit for this while still providing coverage when she's home.
What if I Don't Tell My Insurance Company About My Teen Driver?
The consequences of not informing your carrier of a new driver can vary by state and carrier. However, the end result may be financially devastating.
In the best case scenario, if your teen causes an accident, the insurance company may decide to cover the claim. However, it may also charge you for back premium, billing you for the extra cost of insuring your teen, dating back to when his license was first issued. This may be significant depending on how much time has passed.
Even if the carrier does agree to cover the claim, it may only do so according to the minimum liability limits of your state. This scenario could leave you severely under-insured, and you may have to pay for some of the costs out of your own pocket.
In the worst case scenario, the carrier may deny the claim entirely, leaving you responsible for all damages. That includes damage to all vehicles and property involved, bodily injury, pain-and-suffering and loss of income. Is this something you are willing to risk with an inexperienced driver?
Handing your keys over to a teenager may be terrifying, but it also provides freedom for you both. With careful consideration of your insurance needs, you can enjoy this time as the rite-of-passage it is. Stay safe and contact your local independent agent
with all of your teen driver insurance questions!
About April McBriarty-Weismann and HPM Insurance
April McBriarty-Weismann has worked in insurance nearly her entire life. She began modestly, cleaning her father's insurance agency, McBriarty Insurance, back in the ‘80s as a high school student. She went on to obtain a degree in journalism and work in advertising before getting back to her roots and joining her father's firm. Helping run the firm for 10 years, she then sold it to HPM Insurance
, where she now serves as the Vice President of Business Development and Communications. Combining her insurance expertise and creative writing skills, she seeks to make insurance understandable and even fun for clients of HPM
, which has locations in Amherst, New Hampshire, and Bedford, New Hampshire.