A teen driver on your insurance?

The average increase in premiums across 25 cities was 156% after a teen was added to a policy, and that's under the best of circumstances.

By MSN Money Partner Jul 26, 2011 2:14PM

This post comes from Des Toups at partner site CarInsurance.com.


If you're lucky, your car insurance premiums will only double when your teenage son hits the streets.


The impact of a teen on car insurance rates is one of the most common questions we receive at CarInsurance.com. And the answer is almost always, "It depends." No two households are alike, and so many factors go into rates that any answer is really a guess.


To get some clarity, we ran comparative insurance quotes in 25 states for otherwise identical families: a father, 49, and a mother, 48, driving a financed 2009 Toyota Camry and a paid-off 2004 Ford Expedition, both with full collision, comprehensive and liability coverage, and no violations or accidents. They live in middle-class suburbs and commute to white-collar jobs. (See: How does your vehicle compare on insurance rates?)


Then we added a teenage boy to the mix.


Fix yourself a drink: Your car insurance is going up

In Scottsdale, Ariz., Culver City, Calif., Black Forest, Colo., Hartford, Conn., and Alexandria, Va., our family's car insurance premiums tripled or worse. The average increase across our 25 cities was 156%.


In dollar terms, that meant an increase in six-month premiums of $505 in Des Moines, Iowa, and $2,854 in Culver City. The average dollar increase was $1,014 every six-month rating period.


And that's making the very favorable assumption that you shopped around and got the lowest possible premium when your teenager joined the policy. When rates rise this much, the penalty for failing to shop around grows exponentially: If our family had settled for the second-lowest rate as they added their teenage driver, their six-month premiums would have averaged $480 more.


But wait, there's more!

Remember the whole "it depends" part? Your actual rate increase even after a teenage meteor strikes your policy could be less. You might drive a car that insurers like more, or live in a city with fewer thefts, or drive fewer miles. But you could pay more -- much more -- as well.


A teen with a clean record is very different from a teen with a black mark like an at-fault accident.


A 16-year-old gets traffic tickets at a rate 1.8 times that of the average driver, the National Highway Transportation Safety Administration says. He's 3.7 times more likely to be involved in an accident. Once he has had one accident, NHTSA data show, he's 50% more likely than even other 16-year-olds to have another.


That makes insurance companies cringe.


We sampled five cities by adding a rear-ender with $3,500 damage, courtesy of our 16-year-old. Rates on the cheapest policies rose about 25%, but those on the more expensive policies rose much, much more -- in some cases doubling. That's an insurer who does not want to insure your teenager. Post continues after video.

How can a parent lower car insurance rates?

First, shop around. The more you pay for insurance, the more likely it is that you can save money. Every insurer prices its coverage differently, and what might be cheaper for your neighbor might not be cheaper for you. You can compare auto insurance quotes online or by calling several agents.


It's simply your best shot at saving money, and the payoff for a few minutes of work could be hundreds or even thousands of dollars.


Why concentrate on comparison shopping? Because the next best way to save money is hoping that your teenager gets grades good enough to qualify for a discount. (A few minutes on the Internet seems almost painless now, right?) In general you can expect to save 10% to 15% if your insurer offers a good-student discount at all.


Third, buy the right car. The cheapest vehicles to insure are typically minivans. Good luck! But with that as your opening gambit, a rental-grade sedan will seem like a Ferrari to your teen. If it's old enough to get by with only liability insurance, so much the better.


Lastly, there are no real tricks. State laws vary, but in general:

  • All licensed drivers in a household need to be added to a policy. If you don't, your insurer may not cover an accident or other claim, or it may cover the claim only if you pay the additional premium it would have charged you.
  • Some states allow a licensed teen to be excluded from your policy. Others don't.
  • Most states will not allow a teen to title a car in his own name.
  • Even if your state has no age restrictions on titling a car, he is unlikely to find insurance by himself. It's a contract, and he’s not old enough to sign one yet.

More on CarInsurance.com and MSN Money:


Aug 8, 2011 5:07AM
GREAT! After seeing this, my mom is NEVER going to let me learn how to drive until I am an adult. She reads everything on MSN! Sad
Aug 8, 2011 9:20AM
This is all fine and dandy, but I have a daughter who is 25 and has NEVER driven in her life. She refuses to learn to drive and takes the bus to and from school, and to and from her job.  The insurance company insisted that we pay for her on our policy because she MIGHT drive one of our cars. Personally, I want a refund from State Farm for this extortion that we have been paying since the day she turned 16
Aug 8, 2011 9:24AM
Our monthly auto insurance only went from about $80 to $115 when we added our teen son. This was with State Farm, for full coverage, a $500 deductible, in Ohio for a 3 year old Honda minivan and a 2 year old Accord (which we listed him as his primary vehicle, although he's covered for both).  My husband and I have safe driver rates (I learned to 'hang up and drive' early on) and a multi-policy discount and we've been with State Farm over 10 years.  In addition to driving school required by Ohio, our son is an A student (SF consider that) plus he completed a packet offered by State Farm (it was called Steer Clear and has a scary video with real footage--just like the one I had to watch 30 years ago, a log book that makes you and the teen analyze their driving habits, and a mandatory face-to-face follow-up with your agent).
So it is possible to get a much lower increase (ours was 44%) with a little shopping and planning ahead.Smile

Jul 27, 2011 2:40PM
It is obvious that insurances are out to rip you off.  They are prejudice against young people--  what about families with more than one teen--  God forbid you have children (we had 3 teenagers at a given time) you really can only afford to allow 1 teen to drive at a time--  The article fails to mention that you are considered a teen until like 23 or 25  !
Jul 27, 2011 12:13AM
What a piece of crap article.  No advice, just common sense revelations. 
Mar 19, 2013 3:40PM
When we added our teen son my insurance increase like 50% but I found a site where I got a great deal and I ended paying almost the same, here is the site if your are interested: http://www.usainsurancequotes.net
Aug 8, 2011 11:01AM
I'm not sure if this depends on the insurance provider and/or state of residence, but we added our 15 year old (with a learner's license) to our auto policy at no charge. The premium only increases when he obtains a provisional license, then again if we add a separate vehicle for him. We've already told our son there is no way he'll be getting his license before he turns 17 years old. Even then, the insurance increase will be painful.

Unless there is a need for a 16 year old to drive on his/her own (and I know there are circumstances that make in necessary), he/she can wait a year for this "privilege". Insurance is too expensive for a 16 year old male and I prefer he has a full year of driving practice on his learner's license, which requires a licensed driver over the age of 21 to be riding in the front seat with him at all times.    
Aug 8, 2011 10:06AM
I insure my 17 year old daughter on a 2004 Cavalier as primary for $500 every 6 months, no tickets or accidents and she is A\B honor roll in an early college program. I checked Met Life and they wanted to up every vehicle I own instead of the one she is primary on, I stayed with Farm Bureau of NC my truck premium never changed even after adding my daughter.
Aug 8, 2011 6:22AM

See examples driving on the roads all the time. Living in a major city (Indianapolis, IN) we hear an accounts on the news weekly of teens who have either lost their lives of been involved in a situation where they are part of the reason of lost lives. They just do not have the experience and for some it is to easy to be involved in multi-tasking and having their minds on anything but the roads and other drivers.

If each driver (not just teens) had the mindset when they got behind the wheel, that they are driving a 2,000+ pound killing machine, we might all be MORE careful about the choices we make when behind the wheel.

Apr 8, 2013 1:45PM
A teen driver on your insurance?- MSN Money : Try this site where you can comapre quotes from different companies:  usainsurancequotes.net
Aug 8, 2011 12:22PM
The best thing to do is have your teens official residence be that of someone who does not own a car. If you do that, you do not have to list them. It is also important to make sure your kid is really ready for the road and that will help eliminate issues with teen accidents. Buy the system that blocks your kids cell phone from working in the car. That will help.  Insurance companies lobby lawmakers to pass laws that they know we will brake so that they can raise our rates. They are the biggest crooks in business. You can be smart and beat them at their own game.
Aug 8, 2011 12:25PM
i'm not even a teenager, in my early twenties and when I got married and tried to get a policy with my husband everyone wanted to charge outrageous amounts of money. My husband had been driving for 10 years (since teenager) completely clean driving record but since I am a first time driver at 24 i got horrible quotes from all most insurance companies $1,100+ for a 6mo policy. Anyways finally I was able to get a resonable price with Gieco for a new driver
Aug 28, 2014 7:33AM

Anybody know how long a (non-teen) driver who just got their license is considered a 'new driver', for insurance purposes?


Jan 9, 2014 1:16PM
LOL at Culver City. U guys pay nearly 3k just to insure your teens for 6 months?!?

I only pay $300 (thru 4autoinsurancequote.com) and even then, I know people who pay less.

You guys are fools!
Aug 8, 2011 8:26AM
If the teen is eighteen or nineteen, he's old enough to sign a contract.
Sep 11, 2012 4:41PM
While a lot of people know that car insurance rates are higher for teen drivers, most people are not aware of the available discounts that can help reduce car insurance policy rates for young drivers. http://www.TeachersInsuranceSpecialists.com
Aug 8, 2011 8:10AM

The increase, i.e $585, is 164% of the base, i.e. $356.

The rate after the increase is 2.64 times the original rate.

Aug 8, 2011 4:07AM
Call it what you want, but the chances of a teenager to get into a car accident is way more likely than an older adult, and statistics EASILY proves that; therefore the likeliness of the insurance company to fork out its own money for the carelessness of (some) teenagers are exponentially increased. 

This is coming from a 20 year male driver who has never been in an accident or received a traffic ticket - I am paying $50 a month for full coverage on a 2001 Chevy. 

And according to law, I am still a [dependent teenager].
Aug 8, 2011 7:10AM
don't know how they figured out their % increases column? Take Berwyn, PA...the base is $356, with a teen it is $941. A  164% increase would bring the total premium to $583. Clearly $941 is 2.64 times the original rate or 264%. Which column is right, the percentage column or the w/teen column?
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