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Adding a Teen to Your Auto Insurance Policy

If you have a teen who is learning to drive, start preparing your budget for a car insurance rate increase: Adding a teen driver to a parent’s policy typically increases the bill by 44 percent – and that’s for a one-car family, according to data from Insurance.com.

If you’re a two car-two family, adding a teen driver will increase your auto insurance quotes by an average of 58 percent, and a three-car family would be looking at an average increase of 62 percent.

Teen drivers are among the “riskiest” group to insure. According to the Centers for Disease Control and Prevention, drivers ages 15 to 19 are four times more likely to crash than older drivers, making car crashes the No. 1 cause of death for teens.

Even teens with clean accident records will face high car insurance rates for several years due to their lack of driving experience. At age 25, rates typically begin to decline, and middle-aged drivers enjoy the best rates. It isn’t until about age 65 that rates begin to creep back up again (see chart below).

AVERAGE AUTO RATES BY AGE

Age group Average rate
16-19 $2,999
20-24 $2,040
25-29 $1,707
30-34 $1,591
35-39 $1,610
40-44 $1,603
45-49 $1,478
50-54 $1,284
55-59 $1,214
60-64 $1,169
65-69 $1,244
70-74 $1,187
75 and up $1,203

Source: Insurance.com. Rates shown above are for a one-person policy. Average rates are shown for a policy with coverage of $100,000 bodily injury per person per accident, $300,000 bodily injury for accident, $100,000 property damage per accident. Collision and comprehensive coverage was not included.

REDUCING AUTO INSURANCE COSTS FOR A TEEN DRIVER

There are ways to reduce auto insurance rates for a teen driver, but buying a car for the teen and putting him on his own policy isn’t one of them. The average annual rate quoted for a teen driver is $2,267. (This average includes all liability coverage levels.) Compare that to an average cost increase of $621 for adding a teen to the parents’ policy -- that means you’ll pay 365 percent more by putting the teen on his or her own policy.

Instead, compare car insurance quotes from multiple companies.

If your teen has a good grade point average in school, ask if your car insurance company offers a good student discount. If you’re adding a vehicle to your household for the teen to drive, look for a car with safety features that can lead to low car insurance quotes, such as anti-lock brakes and anti-theft devices.

Your insurance company may also offer discounts if your teen takes certain driver-training classes or installs a monitoring device in the car.

But the best way to hold rates down is to make sure your teen keeps a clean driving record.

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