Auto Insurance
May 17, 2021

How Much Does It Cost To Insure A Teen Driver

That day has come when your baby now has the legal ability to operate a motor vehicle. It can be quite a shock to most parents when they realize how much it costs to add their teen driver to the auto insurance. My hope is to minimize that shock by informing you of what to expect and ways to reduce the cost through discounts offered by most large insurance companies.

Let's get the bad news out of the way, you should expect your current insurance bill to double. I'm a firm believer in under promise over deliver so that is why I say the worst case scenario is for your insurance to double. As an insurance agent I was always having to explain to customers why their insurance increased by 100% just by adding little Billy to the policy. There are many factors that are used by insurance companies to determine car insurance rates but here are a few that are specific to teen drivers:

  • Parents driving history - Insurance companies look at how the parents drive and it is shown to have a direct correlation to how their children will drive. This usually is used to apply discounts instead of surcharging the teen's policy.
  • Parents credit - Most insurers nationwide use a credit rating tool of some sort. It is a highly controversial topic but data has shown that someone with a better credit history has fewer insurance claims.
  • Vehicle make and model - Used in all auto insurance calculations the make and model of a car have extreme considerations if it is a teen driver. If the vehicle has a high power to weight ratio such as a sports car it will have a lot higher rates than a small sedan.

How to reduce the cost of teen driver insurance?

Now the good news or at least good for some parents, there are a lot of discounts which can reduce the cost by up to 50 percent. Discounts are used by insurance companies to help attract customers that will be profitable to the company and in return they offer lower rates to retain those clients. Each auto insurance company has hundreds of discounts but here are the key ones for a teen driver:

  • Good student - There is probably not a single discount that will reduce the cost of insurance more for a new driver than being a good student. This discount usually is 20-35% off the primary coverage of the policy and requires a student to maintain a 3.0 GPA or above.
  • Drivers education - Most parents think this discount is the best but in truth it is actually one of the lowest. This is due to the fact that most states now require the driver to take such a class prior to getting their license. Expect this discount to reduce the policy by 5-10% at most.
  • Teen driver specific programs - Some large insurance companies will have programs for teen drivers to take that can offer a substantial discount up to 30%. These programs are designed to inform the teen of the dangers of driving including texting, talking on phone, distractions from friends and drinking and driving. Ask your company if they offer such a program because it may be as simple as watching a video and completing a short workbook.

By now I have either scared most parents to a point where they never want their kid to drive or you are now ready to expect the worse with the knowledge to keep your insurance costs at a reasonable level. If you need help finding affordable auto insurance for your family use our free service to compare rates from top companies.

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