January 4, 2022
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The first time you hand over a set of car keys to your teenage son or daughter is a moment filled with pride, and maybe some mixed emotions. Are you ready to send them out into the world without you? Can you afford the bump in insurance premiums you will face when insuring them? The unfortunate truth is that drivers age 16 to 20 are the demographic most likely to be involved in an auto accident and a bit more expensive to insure.
The Insurance Institute for Highway Safety reported the 2019 crash rate for drivers aged 16 to 19 was almost three times that of drivers aged 20 and over. And the National Highway Traffic Safety Administration (NHTSA) says 2,121 people were killed in crashes involving a teenage driver (ages 15 to 18) in 2018.
Defining the risks
It may seem like stating the obvious, but teen drivers simply don’t have the same maturity or experience as older drivers do. While all new drivers have an increased risk of being involved in an auto accident, teens in particular are more likely to be affected by other major risk factors.
Statistically, they are more likely to be in an accident caused by distracted driving (for example, texting, eating or applying makeup while driving). They are also more likely to be involved in a crash caused by speeding or by the use of alcohol or drugs, and twice as likely as other age groups to have an accident because they are overtired.
Yet there is some good news. NHTSA statistics show the number of accidents and fatalities is falling. As more and more safety features are added to cars, this downward trend will hopefully continue.
Counting the cost
Adding your teenage son or daughter to your auto insurance policy will increase your premiums. Consider these four factors when estimating the new cost.
- Age of your child. The younger the teen, the higher the premium. While it is possible to obtain a separate policy for older teens, most insurance companies will not offer insurance to younger teen drivers unless they are included on a parent’]s policy. An individual needs to be at least 18 for a contract (including an insurance contract) to be binding, though some insurance companies also require drivers aged 18 to 21 be covered under a parental policy.
- Gender of your child. Male drivers (teen or otherwise) are statistically more likely to be involved in an auto accident. As a result, male teenagers traditionally face the largest premium hike. However, some states have banned using gender as a factor in calculating premiums.
- Type of vehicle. A vehicle with a good safety record and a less powerful engine will always be a better bet for a young driver.
- Your home state. There is a great deal of variation between premium levels (and regulatory differences) among different states.
Reduce your costs
There are a few measures you can take to reduce premiums and risk for your teenage driver.
Enroll your teen in an advanced or defensive driving course to improve their skills and prove to your insurance company that he or she is not a significant risk. You could also look into usage-based insurance programs, which monitor driving habits and then offer lower premiums to careful drivers. These apps work just as well for teen drivers as for every other age group and can also give you peace of mind that your child is not taking unnecessary risks when driving.
If your teen is at college, don’t forget to let your insurance company know when he or she will be away from home and therefore not using your car. This could have a dramatic effect on your premium rates.
Have you ever considered “good grade” discounts? Some insurance companies recognize that hard-working students are more likely to be safe drivers and less likely to exhibit risk-taking behavior.
While obtaining insurance for your teen driver may be expensive, there are ways to reduce the cost. Reach out to us today for details on available discounts and programs for safe driver training. You can reach us at (732) 566-0003 or request a quote at https://maghaninsurance.com/contact-us/
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