In general, insurance companies perceive teen drivers as potentially risky, which makes the average cost of car insurance for teenagers significantly higher. Apart from the actual cost of the car insurance itself, there are several other factors that influence the cost substantially. By considering these factors, you can reduce the car insurance premium for your teenager.
Here are the factors that influence the average cost of teen car insurance.
Gender: The average car insurance cost for a male teenager is higher than that of a female teenager. As per statistics shown by insurance carriers, the cost of a potential accident is much higher in the case of a male teen driver. Therefore, the car insurance cost tends to be higher for a male teen.
Vehicle: The safer the vehicle, the lower the average car insurance cost for a teen driver. If your teen drives a car that has features to accelerate the speed easily and quickly, insurance carriers believe they are more prone to accidents and hence, the average insurance cost of the car would be higher. On the other hand, if your teen drives a car that has safety features such as airbags, then the cost would be lower. Similarly, cars that rate very well in crash tests also contribute to lower average costs for teen drivers.
Also Read: How to Get the Cheapest Car Insurance for Teens
Location: If you live in a rural area where the occurrence or odds of accidents are pretty low, the average cost of teen car insurance would also be low as well. If you live in a city or urban area, the car insurance cost would be higher.
Grades: Good grades play a crucial role in the determination of the average car insurance cost of teen drivers. Insurance companies believe students with good grades tend to be smart and safe drivers. Therefore, they reward them with good student discounts. Male teen drivers could lower their car insurance costs by obtaining good grades. The average cost of female teen drivers who have good grades can be substantially low.
One Vehicle: If you want to share your car with your teenager, ask your insurance company about the car that will reduce the average cost for your teenage driver. This will help you both share one vehicle while reducing the cost of car insurance for your teenager.
Deductibles and Coverage: If you have a teenager who is very difficult to insure, you could significantly reduce the average cost of car insurance for your teen by going for a very inexpensive used car and choosing to pay for only liability insurance (the lowest allowable by law). You can also choose to increase the deductible to the maximum amount. Of course, it’s a gamble because, in the event of an accident, the car needs to be replaced at full cost. However, if you can take this gamble, you could save thousands of dollars on the premium.
Also Read: How to Get the Cheapest Car Insurance
Driving Classes: Most insurance companies offer a good discount to teen drivers who have taken a safe driving course. While not all states require teens to participate in such courses, it can be a good investment if you want to lower the cost of your teen’s car insurance.
Safe Driving: The best and quickest way of reducing the cost of your teen’s car insurance is to ask him/her to drive safely. With safe driving and a clean record, your insurance carrier will reward you with low insurance premiums in the future.
How to Calculate the Average Cost of Car Insurance for Your Teen
Although every situation is unique, here are some examples to help you calculate the average cost of car insurance for your teenager.
Example #1
You own a 7-year-old SUV that is fully insured with liability, comprehensive and collision, and a $500 deductible.
Cost of Insuring without a Teen Driver: $400 to $500 a year
Premium Cost for Teen with Good Grades: $1200 to $1600 a year
Premium Cost for Teen with Poor Grades: $1600 to $2200 a year
Example #2
You have a 3-year-old VW Jetta with a turbo engine and a 6-year-old minivan, both fully insured with liability, comprehensive and collision, and $500 deductible.
Cost of Insuring without a Teen Driver: $2000 to $2500 a year
Premium Cost for Teen with Good Grades: $3500 to $4500 a year
Premium Cost for Teen with Poor Grades: $4500 to $5500 a year
The above example shows the average annual insurance premium for your teen could significantly vary depending on several factors. Therefore, before buying insurance for your teen, be sure to analyze the factors so as to reduce the “risk factor” as perceived by your insurance carrier. This may help you save substantially on your teen’s car insurance premium.
