As a parent of a new teen driver, it's natural to feel anxious about your child's safety on the road and the potential impact on your auto insurance premiums. Recent data underscores the importance of understanding these concerns and exploring ways to mitigate risks and costs.

Why Is Teen Insurance So Expensive?

Teen drivers are more expensive to insure due to their higher risk of accidents and traffic violations compared to experienced drivers. According to the National Highway Traffic Safety Administration (NHTSA), motor vehicle crashes remain a leading cause of death for teens. In 2022, approximately 5,239 fatalities involved young drivers aged 15 to 20, accounting for about 13% of all traffic deaths in the United States.

Male teen drivers are particularly at risk. Data indicates that male drivers aged 16 to 19 are involved in fatal crashes at higher rates than their female counterparts.

Adding a teen driver to an existing auto insurance policy can significantly increase premiums. On average, parents can expect their annual premiums to rise by about $2,328 when including a teen driver. This represents an approximate 80% increase over previous rates.

What Are Parents Required to Do?

Most insurance companies require that all licensed members of your household be added to your policy, regardless of whether they are driving your vehicle or not. You do not have to add teens if they only have a learner's permit. However, it's important to notify your insurance agent when your teen gets their learner's permit; there should be no charges to your policy since your teen is not listed as a driver.

Once your teenager obtains their license, you must either take out a separate policy for them or add them to your existing one. If you are divorced and have custody part-time, contact your insurer to ask about their rules. Typically, the parent with primary custody adds the teenager, but this can vary.

If you have multiple vehicles, you may be able to save money on premiums by limiting your teen to driving only a single car. To avoid paying a premium for your teen on other vehicles, you will need a named exclusion. This means you and your insurance company agree, through an endorsement to your policy, that your teen does not have coverage on those vehicles. As a result, your teen would not have coverage for any claim caused by them while driving those excluded vehicles.

How Can I Add a Teen Most Cost-Effectively?

It is often less expensive to add a teen to an existing policy instead of buying a separate one. However, there are other strategies to reduce the cost of adding a teen driver to your insurance:

• Take Advantage of Discounts: Many insurance providers offer discounts for students who maintain good grades (B average or higher). Additionally, programs such as educational videos, online safety courses, and driving logs can foster safe driving habits and may qualify for discounts. Some insurers also provide discounts for installing electronic devices that monitor driving behavior.
• Drop Collision and Comprehensive Coverage on Older Cars: Save money by dropping comprehensive and collision coverage on older cars that are not worth much more than the deductible.
• Get a Safe Car: Ensuring your teen drives a safe vehicle can lead to lower premiums and provide peace of mind.
• Consider 'Pay-as-You-Go' or Usage-Based Insurance: These policies involve installing a device that monitors driving behavior. Good driving habits can lead to financial rewards, offering a positive way to oversee your teen's driving while saving money.

In conclusion, while adding a teen driver to your auto insurance policy can increase premiums, implementing these strategies can help manage costs. Prioritizing your teen's safety through education and responsible driving practices remains paramount.