Did you know that insuring a teen driver, in most cases, will increase your auto insurance premium?
In some US cities, adding a young driver to an auto insurance plan hikes the premium significantly. As per the latest report by Bankrate, parents of a 16-year old may have to pay an additional $2,531 annually for their auto insurance policy.
If you’re planning to add a teen driver on your auto insurance policy, keep reading to find out why it’s expensive and which cities cost the highest to insure in.
Why’s Auto Insurance Expensive for Teen Drivers?
Keep in mind that the cost to insure a teen driver varies from person to person. This is because some individuals may have worse driving records compared to others. In other words, if your child has been involved in more accidents, than the cost to insure them will be even higher. Younger inexperienced drivers, such as teens, are more prone to accidents, so that’s one of the main reasons it costs more to insure them.
The rates also vary depending on the age of the car the teen’s listed on. If the car is newer the rate will be higher in comparison to an older car. Since teens are more likely to get in an accident, them driving a newer car is risky for insurance companies.
According to statistics, male teen drivers are more prone to speeding and accidents. However, since the number of female drivers has increased over the past two decades, the rate of car crashes between the genders has evened out. According to a 2015 report, drivers between the ages of 16 to 22 accounted for more than 15 percent of fatal car crashes.
The Most Expensive Cities to Insure Teen Drivers
One of the most expensive cities to insure teen drivers in is San Francisco. The average yearly cost for full coverage auto insurance for a married driver is around $2,281. However, the figure hikes to $6,127 annually if a teen is added into the equation. Consequently, the auto insurance cost increases by 169 percent.
The primary reason for such sky-high rates in San Francisco is the cost of living. You might not know this but it’s the second highest, most expensive city to live in in the US, according to the Council for Community and Economic Research. Although, it doesn’t end there, San Francisco is ranked the tenth worst US city to drive in.
San Francisco is known for their large amounts of traffic and commuters typically spend around 45 hours in traffic on average. A congested city with high traffic can be very dangerous for young drivers. This poses a risk for insurance companies, so that’s why it’s one of the most expensive cities to insure teen drivers in.
Los Angeles is another mainstream city that has high insurance rates for teen drivers. The reason for high premiums in Los Angeles is the same as in San Francisco.
Since traffic levels and living costs are similar to San Francisco, you’ll be paying a higher annual rate for insuring your teen driver. The average rate to insure a married couple is $2,655. However, if a teen driver is added into the mix the premium goes up to $7,026. Therefore, the rate increases by 165 percent when you have a teenager behind the wheel.
All in all, insuring a teen driver will be more expensive due to their likelihood of speeding and getting in accidents. However, other factors play a role in rates, such as the city you live in.
If you’re trying to lower your rates, we suggest evaluating the cost of living where you are. Also, it could be a good idea to invest in driving school or lessons for your teen. They’ll be less likely to break the law or cause an accident.
Talk with your insurance provider to see if there’s any discounts available for your teen driver.