Rates Of Passage: Here's How Much It Costs To Insure A Teenage Driver, Data Shows

Forbes

3 days ago

Being able to legally drive a car is a major milestone that officially begins the passage from adolescence to adulthood. To a freshly licensed teenage driver it means newfound freedom. To his or her parents it means being unshackled from the unrelenting cycle of pick-ups, drop-offs and carpooling.
But watching a son or daughter pull out of the driveway in the family car for the first time is not without its trepidations. While teenagers tend to drive fewer miles than all age groups except senior citizens, the frequency of crashes in that demographic tend to be disproportionately high; they remain among the leading cause of deaths among Americans ages 13 to 19 according to the Centers for Disease Control and Prevention (CDC).
And that folks, in a nutshell is why it's so expensive to add a teen driver to the family's auto insurance coverage. How expensive? You might want to sit down for this if you have multiple kids getting their learners' permits. According to a recent study conducted by the insurance website ValuePenguin.com, adding a 16-year-old driver to an auto insurance policy in the U.S. will cause annual premiums to skyrocket by an average $3,252. That's a whopping 157.9% boost.
And that's just the average amount. As with virtually everything to do with insurance, premiums vary by state, based on a variety of factors. According to ValuePenguin, those living in Rhode Island suffer the heftiest hikes to insure a new driver, at an average 225.3% increase, which translates into annual full-coverage rates that are $5,828 higher.
Hawaii, in addition to being considered a paradise, is the state in which parents get the biggest break in this regard, with annual premiums rising by just 4.7% when adding a 16-year-old to a family's policy – a mere $74 upsurge. That's because Hawaii stands out as the only U.S. state that prohibits age discrimination when determining auto insurance rates.
We're listing the 10 states being the costliest and most-affordable in which to cover a 16-year-old motorist below.
Not only does one's age come into play when a given insurer determine its rates, gender likewise plays a dominant role, especially among the youngest drivers. That's because according to data from the U.S. Department of Transportation, two of every three teenagers killed in vehicle crashes are males. The CDC found that 35% of male motorists under the age of 20 that were involved in a fatal collision were speeding, compared to 18% of female drivers.
In addition, either through inexperience or inattentiveness, teen drivers in general are found to more often make dubious choices behind the wheel. The CDC says that 56% of teen motorists involved in fatal wrecks weren't wearing seatbelts, 29% were drinking and 39% admitted to texting or emailing while driving over the previous 30 days.
"Insurance companies set rates based on the likelihood a driver will be involved in a crash resulting in a claim, and how severe that crash is likely to be," explains ValuePenguin auto insurance expert Divya Sangameshwar. 'If a driver is more likely to crash or more prone to rash driving behaviors, the higher the insurer sets the premium because they face a greater risk of paying out a claim.'
Fortunately for all concerned parties, insurance rates decline as a teenager blossoms into a full-fledged adult. ValuePenguin data shows an average $1,100 drop in annual premiums when a young driver reaches the age of 21, and another $1,631 drop when he or she turns 25.
Fortunately, there are several ways parents can help mitigate the unavoidable cost of insuring a teenage driver.
For starters, shop around competing insurers, both when adding a new driver to the family's policy and at least annually thereafter, to find the most-affordable coverage at that particular point in time as circumstances warrant. Also be sure to leverage all applicable discounts that can help soften the financial blow when adding a teen driver to an insurance policy. These include taking a defensive driving course (up to a 15% savings), maintaining a grade point average of 3.0 or higher (10-25%), and having a telematics device installed that can prove he or she is a safe driver (10-40%).
Though it's a stretch at a time when their friends are all behind the wheel, delaying licensing until a son or daughter graduates college or turns 25 will result in the lowest average rate increases. If that's not an option, rates can fall by as much as 25% if a 21-year-old college student forgoes driving off to college (when not coincidentally he or she reaches the legal drinking age) via an 'away from school' discount.
And just as auto insurance rates vary based on age, gender, address and one's driving record, they're also determined based on the vehicle one drives. It's best to get a teen driver behind the wheel of a model that's reasonably inexpensive to purchase and repair, tends to be driven gently, and has top crash-test ratings and full slate of safety features. Avoid upscale rides that inherently cost a fortune to fix if gotten into a wreck, along with high-performance models that practically beg to be driven aggressively.
Where It Costs The Most And Least To Insure Teenage Drivers
These are the 10 states in which ValuePenguin data says premiums will see the heftiest average increases when adding a 16-year-old driver to a married couple's auto insurance policy, noted by the percentage and dollar amount of the rate boost:
And these are the states in which parents will pay the lowest insurance rate hikes when adding a teen driver:
Source: ValuePenguin.com. Click here to read the full report, including data for all 50 states and the District of Columbia.