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Insuring your teenage driver is a costly proposition to say the least. Unfortunately, there’s no concrete statistics showing the average cost of car insurance for an 18-year-old driver in America. Parents should just assume that adding a teenager to their policy would significantly increase their annual premiums.
If you’re paying too much for your current car insurance now is a good time to start shopping for a new policy by entering your ZIP code into our FREE search tool!
If it makes you feel any better, the United States is not alone in charging what can appear to be exorbitant rates for teenage drivers. According to an August 2012 report by The Sun, an 18-year-old British driver will spend about £2,499 annually on car insurance. That equates to approximately 18% of his annual income. No matter where you go, teenage drivers are more costly to insure than their older counterparts are.
Determining a Reasonable Estimate
Short of actually calling your car insurance company and asking, you can come up with a reasonable estimate of the cost of insuring an 18-year-old by following a few simple guidelines. First, start with the assumption that adding your teenager to an existing policy will increase your annual premiums by at least 50%.
According to the Insurance Information Institute, most policies will go up between 50% and 100%, depending on the teen driver in question.
Next, consider your child’s driving record. If at age 18 he’s already had a couple of accidents or tickets, you can expect your premium increases to be closer to the 100% mark. If your teenager is a brand-new driver with a clean record, your premium increase will likely be lower.
Finally, consider the value of the various cars currently in your household. The more expensive they are in terms of their replacement value the more costly their insurance will be. If your teen driver will be using the most expensive of your cars as his primary mode of transportation, you can once again expect your premiums to go up more than if he were to use the least expensive vehicle. All of these factors go into determining how much your premiums will increase.
Why 18-Year-Olds Are So Expensive
It goes without saying that 18-year-olds can be very expensive in just about every area of life. But when it comes to car insurance, there are very real reasons for it. Simply put, teenage drivers cause accidents that are more serious, more fatalities, and more property damage than any other age group on the road.
Seniors over the age of 65 also cause more accidents, but they don’t come close to the amount caused by drivers between 16 and 19, statistically speaking.
As reported by the Centers for Disease Control and Prevention (CDC), 2009 statistics show that drivers between the ages of 16 and 19 are four times more likely to be involved in a crash than other drivers. In addition, while drivers under the age of 24 make up only 14% of the total population, they are responsible for more than 30% of the total financial cost of car crashes.
Even more frightening are statistics from the U.S. Census Bureau dealing with traffic accidents and fatalities. According to their 2009 numbers, 42 out of every 1,000 18-year-old drivers are involved in serious car crashes every year. Of that total, 25 die as a direct result of the accident. Statistics clearly show that 18-year-olds have the highest rates of both accidents and fatalities.
It becomes clear knowing the statistics that 18-year-olds represent the highest risk of financial loss to car insurance providers. In order to protect themselves, they must charge higher rates for these drivers. It’s nothing personal or unethical; it is necessary in order to stay in business.
Adding to an Existing Policy versus Purchasing a Separate Policy
If there’s any good news here it lies in the fact that parents can add an 18-year-old driver to their insurance at a lower cost than having the child purchase his own. Using the low end of a 50% increase, adding your teenager to a policy that costs $1,000 annually would increase your premiums to $1,500. There’s no way your teen driver will get his own policy, on his own car, for just $500 a year.
In most states, your teen will still be able to get reduced rates if he is a student living in your household through age 26. After that, he may still be able to remain on your policy, as long as he is still living in your household, but he’ll be treated as a separate driver with his own risk and his own premium amount.
Of course, all of this is subject to the laws of your state. You should check with your state insurance department to find out the specifics.
Making Use of Driver Education Programs
There are several things you can use to your advantage in reducing the cost of insurance for your 18-year-old driver. One of the most important things is to make sure your child completes a driver education course. These types of courses are usually offered through public school programs, private driving instruction schools, or nonprofits whose mission involves promoting teen driver safety.
If you live in a state like Virginia, where a driver education program is mandatory, you’re likely to pay less for teen insurance right off the bat then someone who lives in a state where it’s not required. In Virginia, the mandatory driver education course requires a 36-point program combining classroom and behind-the-wheel learning. Teen drivers cover things like:
- Alcohol and drug use
- Driving while using a cell phone
- Texting and driving
- Sharing the road with bicycles
- Pedestrian safety
- Handicap parking issues
Insurance companies are more likely to offer reduced rates for drivers who complete these programs based on the assumption that their increased knowledge makes them more cognizant of driver safety. That said, if your teen driver has an accident or gets a ticket after completing his driver education course his rates will still go up as a result.
Driver education doesn’t mitigate the known risks of accidents and violations.
Responsibilities of Parents
Beyond just seeing to it that their teenagers complete a driver education course, parents have some added responsibilities in order to keep their kids safe and prevent accidents. The first thing is to establish clear and uncompromising rules that let your teenager know what is, and what is not allowed behind the wheel.
For example, the statistics previously referenced from the CDC and the U.S. Census Bureau both indicate teenagers are more likely to be involved in a serious accident when their friends or teenage siblings are with them in the car. For that very reason, some states restrict the number of passengers a teenager can take with him. As a parent one of your rules might be that your 18-year-old is limited to no more than one passenger under the age of 21.
The second responsibility of parents is to constantly talk with their children about the dangers of alcohol and drug use, texting, cell phone use, and other distractions while driving. Teenagers tend to have an attitude of invincibility, assuming accidents only happen to other people. Yet distracted driving is one of the most common causes of serious car crashes.
Your teenagers need to understand that not only are they not invincible, they are actually at greater risk than older drivers.
Third, parents have the responsibility of leading by example. It doesn’t do much good to educate your children about the dangers of distracted driving, speeding, and recklessness, only to turn around and do those same things yourself. At the end of the day, your teenage driver will learn his driving habits from you.
Remain Firm at all Times
Once you do set your rules, be sure to remain firm at all times. This is one area where your child’s safety, and that of other drivers on the road, depends on you and your willingness to remain uncompromising.
Your teen may throw a fit and declare that you really don’t love him, but he will change his tune the day his own first child is born. Remember, your job as a parent is not to be liked; it is to make sure your children learn how to be responsible adults.
Though car insurance for your 18-year-old driver is pretty expensive, remember that the price will come down as his age goes up. That’s why it’s more important than ever that your teenagers learn to drive safely and responsibly while they’re still young. Not only will that keep us all safe, but it will also pave the way to cheaper car insurance rates more quickly.
As long as your teen keeps a clean record, he will see gradual premium declines beginning at age 25.
Finding the best car insurance rates for your teen doesn’t have to be hard, just enter your ZIP code into our FREE search tool right now to see how easy it is!