When auto insurers set insurance rates, they consider several factors, including age, gender, location, driving record, and type of car. These factors are put into a complex formula that determines the risk that a particular driver poses. Teen drivers are both young and new drivers. As a result, they can face some of the most significant car insurance rates of all drivers. Teen drivers are seen as inexperienced drivers without a proven track record, and so they fall into some of the highest risk categories.
As discussed, many factors are used to determine insurance rates for drivers. Any driver under the age of 25 will incur some of the highest insurance rates across the board. This is mostly based on statistics showing that young drivers end up in more automobile accidents than others. As a result, the average teen driver will pay about $1,300 for car insurance every six months. Additionally, male drivers will pay about $25 more for auto insurance as females are seen as safer drivers.
The cheapest way to cover a teen driver is to add them to their parent’s policy or other existing policy. Typically parents and guardians can add a teen driver to their policies until the teen reaches a certain age. While the driver is learning to drive under a learner’s permit, insurance companies will usually add the teen to a policy for no additional charge. However, once the teen earns a full driver’s license, the premium will reflect the young driver rate. Even though teen drivers will have higher rates, they don’t have to pay the highest premiums. There are ways to find cheap auto insurance for teenager.
The majority of states in the U.S. mandate that drivers purchase a minimum amount of liability insurance to be on the road. This coverage protects all other drivers in the event of an accident where you are at fault. With liability insurance, however, you and your vehicle will not be covered. For some teen drivers with a learner’s permit and full license, liability insurance is typically all that is needed if they don’t have their own car. However, once the young driver gets a car, it might be beneficial to purchase collision and comprehensive coverage. This will protect them and the car no matter if they are at fault or not. Additionally, if their first car is leased or financed, the financial institution will require that they carry full coverage.
Given that young drivers must have at least the minimum required liability coverage, it will be helpful to shop around for coverage. Not all insurance companies have the same policies and rates for young drivers. As an example, the average rate from USAA is about $1,900 for a teen driver for six months. Liberty Mutual, on the other hand, averages a little over $4,000 every six months to insure a teenage driver. Comparing companies and rates will help you locate the lowest rate and best policy for young drivers.
Look for policy discounts.
Although teen drivers receive some of the highest insurance rates, they can still qualify for auto policy discounts. Some insurers offer good student discounts and rate reductions for having certain safety features in the car. Additionally, the best way to get the lowest rates is to maintain a clean driving record. Annual premium rates will be high for teens, but they will be even higher for young drivers with accidents and traffic violations on their record. You might also investigate installing a tracking device in the car to monitor driving habits and lower insurance rates.
Due to age and inexperience, teen drivers face some of the highest insurance premiums when they first begin driving. However, by shopping around and looking for policy discounts, even young drivers can find affordable car insurance.