When their teenage kids become teen drivers, parents are understandably nervous about safety. Of course, Mom and Dad also worry about how much their auto insurance cost will soar after adding a teen driver.
But why is car insurance for teen drivers so much pricier than for other drivers? Car insurance companies price their policies based on risk. The higher the risk, the higher the premium. And it turns out that teen drivers are the riskiest drivers on the road.
“Teen drivers have a higher rate of fatal crashes, mainly because of their immaturity, lack of skills and lack of experience. They speed, they make mistakes, and they get distracted easily — especially if their friends are in the car,” according to the National Highway Traffic Safety Administration (NHTSA).
David Griffin Jr., vice president of The Dowd Agencies, an independent insurance broker based in Massachusetts, says the greater likelihood that a teen driver will crash compared with drivers in other age groups drives up the expense of the collision component of a car insurance policy. All but two states require motorists to carry collision coverage.
Statistics from the U.S. Centers for Disease Control and Prevention (CDC) show just how costly and deadly teen-involved crashes are:
- In 2016, Americans age 15 to 19 represented 6.5 percent of the country’s population. However, they accounted for an estimated $13.6 billion — or 8.4 percent — of the total costs associated with injuries suffered in vehicle crashes.
- In 2016, six Americans age 16 to 19 died every day in vehicle crashes, and hundreds more were injured. Vehicle crashes are the No. 1 cause of death among U.S. teens.
“Teens’ lack of experience affects their recognition of and response to hazardous situations,” according to the Insurance Information Institute, “and results in dangerous practices such as speeding and tailgating.”
How to Make Auto Insurance for Teen Drivers Less Expensive
It’s hard to escape the high price of getting car insurance for a teen driver. However, there are steps you can take to reduce your auto insurance premium. Here are six you can discuss with your teen.
1. Don’t talk or text while driving.
Research indicates teen drivers are six times more likely to crash while making a call on a cellphone, according to NHTSA. They are 23 times more likely to crash if texting while driving.
“Talking or texting on the phone takes [a] teen’s focus off the task of driving, and significantly reduces their ability to react to a roadway hazard, incident or inclement weather,” NHTSA notes in a report on teen driving.
2. Avoid any type of distracted driving.
A cell phone isn’t a teen driver’s only source of distraction. Eating, applying lipstick, switching the radio station, or chatting with passengers (especially other teens) decrease a teen driver’s concentration, according to NHTSA.
“Any distraction is a dangerous distraction,” NHTSA writes. “Taking eyes off the road even for five seconds could cost a life.”
3. Stick to the speed limit.
In 2016, speeding was a factor in nearly one-third of deadly crashes involving teen drivers, according to NHTSA. Always obey posted speed limits so you reduce the risk of injury or death in a crash.
4. Raise the deductible.
Increasing your collision deductible on a policy that includes a teen driver is a smart way to save money, according to Griffin. For example, if the collision deductible currently is $500 collision deductible, consider increasing it to $1,000, he says.
“It’s worth it due to the significant savings associated with the higher deductible,” Griffin says. “Also, many insurers waive the deductible in a not-at-fault accident. In that case, your deductible stays in your pocket.”
5. Get driver training.
It might be tempting for a parent to teach a teenage son or daughter how to navigate the roads. But a formal driver’s education course could eliminate that headache and also lead to cost savings. The Rocky Mountain Insurance Information Institute says many car insurers offer premium discounts of up to 10 percent if a teen driver completes an approved driver’s education program. Griffin says such discounts can go as high as 25 percent.
“Driver’s education essentially pays for itself in the first couple of years of the policy,” Griffin says.
6. Be a good student.
If teenage drivers earn good grades, then a car insurer might award a “good student” discount. For instance, an insurer might offer a 25 percent discount teen drivers with a B average in high school or college.