For most parents, excitement and anxiety go hand in hand when it’s time to let their teens get behind the wheel of their car. The daunting prospect not only involves concerns about the safety of young drivers and those around them, but also worries about the mammoth increase in insurance costs.
Let’s face it, teen drivers are incredibly expensive to insure and for a good reason. Although Kansas has a Graduated Driver Licensing System as well as a strict law against the use of cell phones in any way by teen motorists, teenage drivers were responsible for nearly 12,000 crashes and nearly 100 fatalities in 2017.
Nationwide, the age group of 16-21 years is considered the most dangerous among motorists, with 15 to 19-year-old drivers four times more likely to be in an accident than older drivers. In fact, your 16-year-old faces 9 times the risk of causing an accident than a 45-year-old motorist. Insurance companies seem to be within reason when they charge more to cover teen drivers.
How much will you have to pay for teen driver insurance?
According to Insurance.com, adding a teen driver can increase the cost of insurance for a single car family by 44% and for a two or three car family by nearly 60%. In Kansas, you will end up paying approximately 134%, or $500 to $1,000, more for your teen motorist.
Typically, teenage boys are more expensive to insure than teenage girls, and you can expect to pay $100-$300 more for your teenage son than what you would for your teen daughter. Unfortunately, even teens with ultra-clean and safe driving habits are not spared the high insurance rates.
In fact, 16 and 17-year-olds have the highest coverage costs. It’s only when young drivers cross their 25th birthday that insurance rates start coming down and continue to plunge till motorists reach their 80s. Even then, premiums for a 75-year-old driver will be far lower than those for a 16-year-old motorist. On an average, this is what insurance premiums look like for each age group:
- 16 to 19 years- Around $3,000
- 20 to 25 years- Around $2,100
- 25 to 30 years- Around $1,700
- 30 to 45 years- Around $1,600
- 45 to 50 years- Around $1,500
- 50 to 75 years- Around $1,200
- Above 75 years- Above $1,200
Won’t it just be easier and cheaper to get a teen his own policy?
An exclusive policy for your teen will almost always cost more than adding him/her to your policy. According to carinsurance.com, parents in Kansas will have to pay:
- For full coverage: Approximately $4,900 to $5,700 for an exclusive policy and $2,500 to $2,700 for adding the teen to parents’ policy.
- For minimum required coverage: Around $1,800- to $2,000 for an exclusive policy and $900 to $1,000 for adding the teen to parents’ policy.
But the big problem is that the benefits of an exclusive policy do not justify the 200% increase in costs. Here is how:
- Buying expensive insurance does not absolve you: If your teen is involved in a crash, in accordance with the Vicarious Liability laws of Kansas, you will be held responsible for any damages caused, but not covered by the policy.
- You will be buying and signing the policy: In Kansas, like in many other states, minors (those below the age of 18) cannot enter into a binding contract without parental consent, and will have to sign the paperwork anyway. This means that there is no way to shirk the financial liability that comes with it.
Why adding your teen to your auto insurance policy is a better option?
A separate policy for your teen will only make sense if he already has so many tickets to his name that adding him will significantly raise the rates of the family policy. In this case, getting him an old car and an exclusive policy with ample liability coverage, along with other required minimums, may prove to be more affordable.
But remember, adding your teen to your policy means that he may get access to your higher limits, thus more protection. You’ll also have the cost advantage of credit scoring and multi-vehicle discounts. These are not normally available to young motorists.
There are some who suggest that there is no need to add a teen to your policy nor to buy the young motorist his own coverage. The argument is based on the understanding that your policy offers coverage to all motorists in the household, including drivers who have not been named in the paperwork.
Even if that’s true in some situations, many insurance companies may view this as misrepresentation and although the claim may be paid, they will ask you to subsequently add the name of the young driver to the policy and they may also reconsider continuing the account.
On the other hand, if the insurance company asks you to name all the drivers in the household at any time and you don’t add the name of your teen, this may be deemed as material misrepresentation and can be the basis to void a claim or policy.
How much insurance coverage does your teen need?
The minimum legal auto insurance requirement in Kansas is $25,000 liability coverage for bodily injury (BI) per person and $50,000 per accident; $10,000 liability for property damage (PD); $25,000 per person and $50,000 per accident for uninsured/underinsured (UM/UIM) motorist coverage; and personal injury protection (PIP) of $4,500 per person.
With a teen driver, the more liability coverage you have, the sounder you will sleep. Consider going for the recommended 100/300/100 (i.e. $100,000 liability BI cover per person and $300,000 per accident along with $100,000 for PD).
In addition to this, you may also want to consider some amount of collision coverage. If you keep your deductible at $1,000, it won’t cost much and your teen will get additional protection. Many experts also recommend additional liability cover of up to $1 million apart from auto insurance, also called an Umbrella Policy, if you have personal assets you want to protect.
How and when to get teen insurance?
- Get in touch with your insurance provider while your teen is still in the “restricted license” stage. This will give you more time to shop around, and you will know when would be the right time to add the young motorist to your policy.
- Get quotes not just from your insurance provider but also from other insurance companies, and for more than your current liability coverage.
- Remember to ask about discounts and any conditions that can be met to lower rates.
- Add your teen driver to your policy at the right time as per the policies of your specific insurance company.
- Look for cheaper rates at every renewal or annually.
How to save money on teen driver auto insurance rates?
- Good students get good rates: Being in the top 20% of the class or a GPA of 3.0 or above can shave off 5%- 25% from the cost of coverage.
- Good drivers are also rewarded: This discount comes after 2-5 years of consistently clean and safe driving, but it can take off 10%- 25% from insurance costs.
- Show your commitment to safe driving: A safe driving course in addition to what is required for licensing can lower the rates by 5% to 15%.
- Lower mileage equates to lower rates: The risk of being in a crash is automatically reduced if your teen is not out on the road as much. The big drop in rates comes with an annual mileage of less than 7,000 or 5,000 miles.
- Keep track of your teens driving habits: Using a telematics device/program like Pay-As-You-Drive or Snapshot helps you to keep track of your teen’s driving behavior, including vehicle speed, braking time, miles covered and others. These programs can get you a discount of 5% to 45%.
- Insurance companies want teens to be safe drivers: Many insurance companies have their own novice driver programs in place. If your teen completes the course, you get an additional discount of 5% to 10%.
- Use time away at school for a discount: If your teen is away at school with his car parked in your garage, most insurance companies will drop the rates by 5% to 35%, provided the school is more than 100 miles away.
- Get your teen the right car: More horsepower equates to a higher risk of speeding and crashes. Choose a small SUV or a family sedan instead of a sports car to lower insurance rates for a teen motorist.
- An old car is not always the best choice: The safety features in a new car can lower the cost of insurance and keep your kid safe in case of a crash.
- Sharing helps: Allow your teen the use of one of the cars in the family, which is already on the policy. Because your child will be listed as the secondary driver and not the primary motorist, your rates will be lower. Also, assign your child to the cheapest car in the household if your insurance company allows you to designate the primary driver for each car.
Other ways to lower the cost of auto insurance
These are not specific to teen motorists, but they can be used to lower insurance rates regardless of who and how old the driver is.
- Families get discounts: Look for insurance companies that offer lower rates to unmarried youngsters (under 21 years) who are living with their parents.
- Loyalty pays: Young motorists, usually above the age of 19, can get lower rates if they buy their auto insurance from the same company as their parents.
- Multiple vehicles can also get you a discount: Check with your insurance provider if you can get a discount for adding another car to the policy. Most insurance providers do offer multi-vehicle discount.
- Drop comprehensive coverage: If your kid does not drive a very expensive car, you can drop comprehensive coverage to lower rates.