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UPDATED: Mar 13, 2020
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Young people, especially young men, pay more for auto insurance than any other demographic of people. This is because they get into auto accidents more often than any other group of drivers. Auto accidents are a leading cause of death for teenagers, and young drivers are more likely to total their vehicles in accidents than other people. All of these reasons combine to make auto insurance for young drivers a risky investment for insurance companies, leading to the high cost of premiums.
Even the parent’s car insurance premiums will increase by having a teen driver in the house, even if that teenager doesn’t actually drive the family vehicles. In order to avoid high premiums, the insured may need to alter coverage, enroll in driver’s education programs or take advantage of good student discounts.
How Much Does Car Insurance Cost for Teenagers?
There is no specific price point for teenagers. All insurance policies are priced according to a number of factors, so no one element will entirely determine the cost of coverage. In addition to the driver’s age, a policy’s cost will also depend on the type of vehicle being driven, where the insured lives and the driver’s history of accidents or traffic violations.
Because new drivers do not usually have any driving history to base their rates on, insurance companies rely more heavily on statistical information when assessing risk. Young drivers also do not have established credit or other lines of insurance, leaving them at a disadvantage for rate calculations.
Young drivers are categorized as high risk. They share this risk category with people who have had a history of accidents, traffic citations and DUI convictions. High-risk drivers pay, on average, two to four times as much for auto insurance as preferred-risk drivers for identical policies.
Fortunately, it’s easier for a young driver to move to a different category of risk than it is for another type of high-risk driver to change. After a few years of safe driving, teens and young adults can transition to a standard or preferred risk policy and enjoy substantial rate decreases.
How to Get Cheap Car Insurance for a Teenager?
If a young driver is a student in good academic standing, they can qualify for a good student discount from most insurance companies. The exact requirements will vary, but usually students with a 3.0 GPA or who qualify for the Dean’s list can receive the discount each year if they send their academic transcripts to the insurance company. Insurance companies find that good students are involved in fewer accidents and are more dependable on average than other drivers.
Drivers can also pursue additional driver’s education courses to improve their rates. If the state offers defensive driving courses through the DMV or library, a student can usually sign up for a very affordable price and submit proof of attendance to the insurance company. This will help to reduce the overall cost of insurance.
Other discounts may be available depending on the insured’s situation. For example, a college student may be able to take out a renter’s insurance policy to cover their dorm room possessions. This may qualify them for a multiple-policy discount with the insurance company.
Although high-risk insurance premiums are not fun to pay, they are temporary for young drivers. As long as you focus on good driving habits, you should be able to reduce your premiums soon and take advantage of safe driving awards and other discounts. The earlier you establish a policy, the longer your history with them; this will work in your favor if you decide to change insurers down the line as a long-standing policy is a favorable mark on your credit with the insurer.
Whether you’re adding your teenager to your family’s insurance policy or buying your first policy on your own in college, you can get the best deal on auto insurance by shopping online. While your policy may be more than regular insurance coverage, you can get the best discounts by comparing multiple companies. Once you’ve chosen a company that will offer you reasonable rates, you can work with them to see what additional discounts you may qualify for and how to begin reducing the overall cost of your insurance policy.