There is a good reason why car insurance for teen drivers is so expensive. The risk of getting into a fatal crash for drivers between the age of 16 and 19 is much greater than for drivers age 20 and older, so insurance companies are right to raise premiums when a teen driver is added to an existing policy. While insuring an underage driver is expensive in all states, premiums vary greatly from one state to another, depending on car insurance regulations, frequency of crashes and claims, as well as the geography in a given state, with states that have large rural areas having lower rates.
According to a research from InsuranceQuotes.com, adding a teen driver to an existing insurance policy raises the policy’s premiums by an average of 84% across the country, which equals to about $2,000. The study found that differences in insurance rates for teenage drivers between states can be substantial, with New Hampshire singled out as the most expensive state.
In New Hampshire, adding your teenage kid to your car insurance policy will raise your premium by 111%. It’s followed by Rhode Island and Maine with an average increase of 107%. Wyoming (106%) and Connecticut (102%) round out the top five most expensive states. Factors that contribute to such high insurance premiums in these states include weather conditions, with unpredictable weather patterns and high frequency of tornadoes and storms, as well as people’s driving habits, in addition to their court systems that help increase the number of claims.
At the other end of the spectrum, there is Hawaii as the least expensive state for insuring a teen driver, with a 17% premium increase. The fact that insurance companies are not permitted to take a driver’s age, gender and how long a person has been holding a driver’s license into account when determining premiums, is the main reason behind the low car insurance rates for underage drivers in Hawaii. Insurance regulation is similar in other states with low auto insurance rates, such as New York, with a 53% increase, Michigan (57%), Montana (61%), and New Mexico (62%). Insurance laws in these states are stricter and impose precisely defined rules that prohibit insurers from using random factors when determining premiums.
While adding a teenage driver to an insurance policy is certainly more cost-effective than having the teen buy his/her own policy, parents need to consider the factors that can increase their premiums drastically when adding their teenage kids to their policies. First and foremost, buying a safe vehicle for your kid is very important. Usually, larger and heavier cars provide better protection for vehicle occupants, so you need to keep this in mind before you purchase a car for your teenage son or daughter. Also, enrolling your kid in a defensive driving course, so that insurance companies can consider him/her a safe driver and offer you a discount. Finally, installing an electronic monitoring device in your kid’s car can also help keep your premiums down.