Auto insurance is a must in forty-seven states across the country, which means that even 16 year old drivers must be insured. Since teenage drivers are inexperienced, often immature and have a tendency to drive recklessly, insurance companies will charge them significantly more than what a forty year old driver would pay.
Individual policy vs. parents’ policy
Teenagers have the option to get an individual policy. Costs are typically higher than being added on the parents’ policy, and the kid will usually have to prove a source of income. Premiums are between 75% and 150% higher than the average rates a grownup would pay.
Parents who add teenage drivers to their policy will typically see an increase in premiums of only between 50% and 100%. If you currently pay $1,200 a year for your liability insurance and want to add your teenage kid, you should expect to pay between $1,800 and $2,400.
The biggest factor insurance companies use when determining the new premium is the teen’s driving record. Traffic violations at young ages can make premiums go through the roof. An accident at early ages can even triple the rates.
Minor violations won’t necessarily affect the insurance costs. Insurance companies don’t check driving records periodically and, even if they did, one isolated ticket isn’t likely to increase your premium. Repeated offenders, however, will be charged more.
Factors that can lower the premium
A lot of insurers offer the so-called “good student discount”. If the kid maintains a 3.0 GPA in high school, a consistent rebate can be offered. Traditional discounts that adults use apply with teenagers too – club memberships, higher deductibles or safer cars.