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Adding A Teen Driver To Your Insurance Policy: Get Ready For A Big Price Hike

If you’ve ever had a teenage driver in the family, you know that insurance premiums can go through the roof when you add them to your policy.  In fact, parents can expect their insurance rates to double when their teen gets behind the wheel, and it will stay that way until they turn 20.  This is especially true if your young driver is male.

Wonder why the cost to insure teen drivers is so high? As with all things insurance related, it’s all about statistics. Inexperience and lack of judgment among adolescents adds up to a big risk on the road.  And, the higher the risk, the more you’ll have to shell out for insurance.

Teens between the age of 16 and 19 are especially prone to speeding and accidents, which is the main reason the cost to insure them is so high. They’re also much more likely to be seriously or fatally injured in a car crash than older drivers. According to the National Highway Transportation Safety Administration, automobile crashes are the leading cause of death for teenagers. Even  more disturbing is the fact that, according to the Governors Highway Safety Association, fatalities of drivers ages 16 and 17 rose 19% in the period from January through June of 2012, an unhappy statistic for parents of young drivers – and for insurers, who will factor in that information when calculating premiums in that age group. Alcohol contributes significantly to the high rate of teen driving fatalities. It’s estimated that 31% of fatalities among teens involved alcohol and 77% of those teens weren’t wearing seat belts.

Gender, geography, type of auto and age all figure into the equation of insurance rates, but overall averages show that you can count on a 99% hike when you add on a 16-year-old, a 90% hike for a 17-year-old, an 82% increase for an 18-year-old and a rise of 65% for a 19-year-old.

To break it down even further, boys are more costly to insure than girls.  Why is that? Again, statistics show that girls are safer drivers than boys, which is why a male teenage driver will result in a 96% rise in auto insurance premiums, while female teen drivers will bring about a 72% price hike, on average.

An article in CNBC.com reveals that the state you live in figures significantly when accounting for insurance rates for teen drivers. They found that ten states, including Arkansas, New Hampshire and Louisiana, have the highest rates for insuring teens.  If you live in any of these states, you can count on your insurance rates to skyrocket anywhere from 116% to 101%.  Teen drivers in Hawaii, North Carolina and New York have the lowest rates for adolescent drivers, where a family’s rate will rise anywhere from 18% (Hawaii), to 59% (North Carolina), to 62% (New York).  These figures reflect clean driving records and good credit.

The vehicle the teen drives affects the insurance rate, as well.  Luxury and high performance cars are the most expensive to insure for teens. Mid-range autos like the Ford Taurus, or Toyota Prius are the cheapest. If your teen is chomping at the bit to get behind the wheel of a speed monster like a Porsche or classic muscle car, you can get them an insurance quote on the vehicle to impress upon them the price tag that accompanies such a vehicle.

Insurance rates for teens can be lowered if they take a defensive driving course and have good grades. You can also get discount if you have more than one policy under the same insurance company. Once you get your teen driver licensed and insured, don’t let up on impressing upon them the importance of safe driving.  Setting clear rules about their driving habits and placing restrictions on when, where and how many passengers they can carry will help to keep them safe behind the wheel.  Teen crash rates rise significantly under certain circumstances which you should factor into your house rules. Driving at night contributes to teen accident rates, as does carrying more than one passenger. Limiting driving according to these factors will not only keep your rates from going up even higher, it will keep your young driver safer on the road.