Nothing worries a parent more than hand watching their teenager drive away alone for the first time. However, your auto insurance premiums might run a close second in the worry department! Are you wondering how much it will cost to insure a teenage driver?
It might help to understand how insurance companies set premiums in the first place. Every insurance provider plugs your information into a formula that calculates the risk of you making a claim (in other words, the risk that you’ll get into a traffic accident). Each provider’s formula varies a bit, but the basic premise is the same. More risk equals higher premiums.
Auto insurance companies consider age to be one of the biggest risk factors for drivers. It goes without saying that less experience behind the wheel increases the risk of an accident. Statistics back up this claim: According to the Insurance Institute for Highway Safety, which compiles data on drivers and accidents, teenage drivers are 3 times more likely to be involved in a crash. Accident rates are higher in male drivers, too, which explains why young men are charged even higher auto insurance premiums than young women.
So how high are we talking, here? According to ValuePenguin, the average auto insurance premium for a 16-year-old boy is $7,778 annually. For 16-year-old girls, the price drops to $5,776 per year.
Yikes! Having a teenage driver in the household certainly isn’t cheap. Luckily, there are a few things you can do to cut the cost a bit. Some auto insurance providers offer a discount for good grades, or for completing certain driver’s education courses. And of course, you can compare rates on different vehicles, since they vary a bit.
Finally, make sure to get a quote from at least three different auto insurance companies. Their rates can vary a bit more than you would think.
We can help with that part. Give us a call, and hopefully give you one less thing to worry about.