How to Save Money Insuring Teenage Drivers
We all know that teen drivers are expensive to insure, but according to a new report on insuranceQuotes.com, the cost to insure a teen driver has essentially flatlined between last year and this year. On average, families adding a teen driver to their car insurance will see their yearly premiums increase 80% that year, a small bump up from last year’s 79% increase. It appears that insurance premiums holding steady correlates with a corresponding flatline in fatalities among teen drivers.
1978 was the peak of teen driver deaths, with nearly 10,000 reported fatalities, but that number has gone down every year. Kathy Bernstein, senior manager of the National Safety Council’s Teen Driver Initiative, however, thinks there may now be a “leveling off” of teen driver safety. For insurance rates, that’s certainly good news, but for teen drivers themselves, it suggests that getting fatality rates lower may prove to be difficult over the next few years.
One factor that contributes to the lower number of teen driver deaths is that fewer teens have drivers licenses now. While 85% of teens had drivers licenses in 1996, that number had dropped to 73% by 2010. Bernstein also says that those teens who are driving now drive less than they used to, partly because of increases in gas prices.
Even so, teen drivers still crash much more than any other age group. While drivers between 15 and 24 only make up 14% of the country’s drivers, they’re responsible for 30% of the total cost of motor vehicle injuries among male drivers and 28% of total cost of motor vehicle injuries among female drivers. Pinpointing the problem, Bernstein said, “Teens don’t crash because they’re bad drivers. They crash because they are inexperienced drivers, and nothing but time can compensate for that.”
With more experience comes lower premiums, too. Sixteen-year-olds are the most expensive to insure, raising premiums by an average of 96%, but by the time they reach 19, that number drops to only 60%. A 60% increase in premiums is still quite large, but compared to 96%, it’s significantly more affordable.
Curious to dig deeper, I spent some time chatting with Laura Adams, a senior analyst for insuranceQuotes.com. When asked about the role that experience has in driving safety, she said that the increased maturity that comes with teens getting older certainly helps, but depending on the state, you may see a teen driver with three years of experience paying less for car insurance than an older driver who has just received a license.
One significant factor in the cost of car insurance is that states have different rules about what insurance companies are allowed to consider when determining premium rates. Hawaii, for example, doesn’t allow age, gender or length of driving experience to be considered, making it drastically cheaper to insure teen drivers there. Across the rest of the country, any of those three factors may or may not be considered.
If you can’t uproot your family and move to a different state, Adams said that insurance companies often offer lower premiums on cars with more advanced safety features like electronic stability control and anti-lock brakes. She also recommended that teens enroll in more advanced driver safety courses partly to improve their skills, but also because completing one is also likely to result in an insurance discount.
While parents may appreciate the discounts they receive on their already-increasing premiums, advanced safety features and increased driver training may also keep teens out of wrecks that may have increased their rates even further.
The most significant discounts Adams wanted to emphasize were good student discounts. Continuing to receive a good student discount requires parents to regularly submit their teen driver’s grades, but the savings can be huge. A student with a B average or better can receive a discount as high as 25%. After high school, students can still receive discounts while they’re in college and even grad school. Considering how large the savings can be, she’s convinced that it’s worth the hassle to get the good student discount.
Finally, Adams also added that not every insurance company charges the same amount for teen drivers, so it’s a good idea for families to shop around every time they add a new driver to their policy. What may have been the best deal a few years ago may no longer be as competitive, and finding the right insurance company for each family’s current situation can lead them to save a lot of money.
Insuring teen drivers can be incredibly expensive, but luckily, it looks like rates are going to stay relatively constant for the next several years. Parents obviously want their teen drivers to stay safe, but being proactive and asking for discounts can save them some serious money if they do so. Even better, with fatalities at record lows, the roads are safer for teen drivers than they’ve ever been.