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Keeping Teens On Parents’ Policy Safer, More Affordable

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U.S. lawmakers to get tougher on teen drivers

U.S. lawmakers to get tougher on teen drivers

If you’ll soon have a new teen driver in the household, you’ve probably already given some thought to what vehicle they’ll be driving.

But have you thought about insurance? If you haven’t, you might be in for some sticker shock. And you should probably set aside some extra money for it. Like, now.

According to Insurance.com, adding a new teen driver to a parent’s policy typically increases the overall premium by 44 percent for just one vehicle; 58 percent for two vehicles; or 62 percent over three vehicles.

For a family with three vehicles, the average cost of insurance for an adult applicant and spouse is about $2,286, but adding just one child age 16-19 increases that premium to $3,707—a $1,421 different in one year alone.

And if you think that making your teen get his or her own car, in the interest of learning responsibility, you should be aware that teens might be more likely to push boundaries in a car if it’s their own. According to research through the Americsan Academy of Pediatrics (AAP), teen drivers are less likely to be involved in crashes when driving a car that’s shared with parents than with a teen driver’s own vehicle.

But also, having your teen get their own car, and their own insurance policy, is not at all the answer for saving money. According to Insurance.com, the average annual rate for teens alone is about $2,267—far more than what it would cost to be added to a parent’s policy.

The best way to keep rates down is by simply keeping a clean driving record. Otherwise, some insurance companies offer discounts for special classes or monitoring devices. And there might even be a discount for a good grade-point average.

The high rates do tend to decline significantly at 20 and again at 25, reaching their most affordable at middle age. Then by about age 65, they again climb.  Look below for an average-rate breakdown by age group.

[Insurance.com]

 

Average auto insurance
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.
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