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Are you shopping for car insurance for a 17-year-old? You’ve probably noticed that teens pay a lot of money for auto policies, primarily because they have a high risk of claims and accidents and, therefore, cost a lot to insure. If you have a new driver in your household, here’s what you need to know about finding an affordable auto policy.
Adding a Teen To Your Policy
Even if your teen does not have his or her own car, your auto insurance company might require that you add all licensed drivers in your household to your policy. CarInsurance.com reports that adding your teen to your policy usually costs less than buying a separate policy for a new driver. The website reports that the average parent pays about $577 more per year to add a 17-year-old female driver to their auto insurance and an average of $740 more to add a 17-year-old male. These numbers are based on a 45-year-old father who drives a Honda Accord.
Cost for a Separate Teen Driver Policy
According to data from CarInsurance.com, the average 17-year-old will pay $5836 annually for a separate full coverage auto policy. This amount varies based on the type of car your teen drives, where you live, and other factors. That’s at least $4000 more than the average 30-year-old driver will pay for auto insurance. The website bases these rates on a 100/300/100 policy with a $500 deductible on a 2017 Honda Accord.
Most Affordable Teen Driver Policies
WalletHub reports that these auto insurance companies have the most affordable full coverage rates for teen drivers:
- United Financial: $5539
- Arbella: $5184
- Allied: $5090
- AAA Texas County: $4881
- Nationwide: $4662
- Depositors: $4517
- Travelers Insurance: $4473
- New York Central: $4139
- State Farm: $3919
- MMG: $3701
- Progressive: $3623
- New Jersey Manufacturers: $3617
- Owners Insurance: $3485
- Mississippi Farm Bureau: $3110
- Texas Farm Bureau: $3003
- Erie: $3002
- GEICO: $2886
- Safeco: $2736
- North Carolina Farm Bureau: $2570
- USAA: $2476
- Liberty Mutual: $2191
- Concord: $1902
Gender Differences for Teen Auto Insurance
Male adolescents pay significantly more for auto insurance than female adolescents, according to NerdWallet. Statistics from the Insurance Institute for Highway Safety report that teen boys cause 66 percent of the fatal accidents among this age group. Overall, drivers ages 16 to 19 cause about 300 percent more fatal crashes than drivers ages 20 and older. In addition to being crash risks, teens pay more because they have lower levels of education, are not married, and usually do not have established credit histories.
On average, a female adolescent will pay $2915 for annual insurance on a parent’s policy and $5490 for a separate auto insurance policy. For a male adolescent, average premium costs rise to $3243 on a parent’s policy and $6357 on an independent policy. The Zebra reports these average annual minimum coverage rates for male/female teen drivers from the five biggest auto insurance companies in the United States:
- GEICO: $1316/$1180
- USAA: $1369/$1288
- State Farm: $2120/$1759
- Allstate: $2174/$1991
- Progressive: $2632/$2440
These are the average rates for full coverage for male/female teen drivers:
- GEICO: $3577/$3126
- USAA: $3556/$3253
- State Farm: $5232/$4328
- Allstate: $6427/$5563
- Progressive: $2632/$2440
Keep in mind that while USAA offers affordable policies, they are available only to veterans, members of the military, and their family members.
Strategies To Save on Teen Driver Insurance
The Zebra recommends that parents with one or more teens on their policies shop around about every six to 12 months to find the best auto insurance rates. Protecting your own driving record can also keep your rates low. Avoid at-fault accidents, reckless driving tickets, distracted driving, and other dangerous practices that can result in claims and raise your premium.
Limiting coverage for your teen driver can also reduce premium rates. It costs much less to insure an older car than it does to buy a policy for a new model vehicle. If you insure a car worth less than $4000, it typically makes sense to drop collision and comprehensive coverage in favor of minimum liability coverage in your state. The national average for a liability-only policy is $672 per year with a high-deductible policy and up to $1427 if you choose a lower deductible.
Encourage your child to hit the books so he or she will qualify for a good-student discount. Most companies provide this incentive for high school and college students who keep a grade point average of at least 3.0, as long as they provide transcripts every six to 12 months as required by the policy documents.
ValuePenguin reports these average annual savings for male drivers/female drivers who qualify for good student discounts:
- Age 16: $439/$248
- Age 17: $348/$222
- Age 18: $338/$197
- Age 19: $278/$160
All drivers in your household can potentially save money by taking a defensive driving course. Check with your insurance company or your state to learn about approved courses and incentives.
Graduated Driver Licensing Laws
Driving safety experts say the reduced rate of fatal accidents among teens over the past two decades stems from state graduated licensing laws. These programs provide restrictions for new drivers to help prevent collisions. Common restrictions include passenger limits, curfews, and minimum supervised driving hours. Some programs end at age 17 or 18, but other states maintain driver restrictions until age 21. In those states, you might notice lower auto insurance rates for your adolescent.
Steps To Take if Your Teen Has an Accident
If your teen has a collision and damages your vehicle but causes no injuries, follow these steps:
- Go to a local mechanic or body shop to get a repair estimate.
- Ask your insurance adjuster how much your policy cost will increase if you file a claim and add your deductible.
- Determine whether it is cheaper to pay for the repairs out of pocket or go through your auto insurance provider.
While finding car insurance for a 17-year-old can seem like an uphill battle, these tips will help guide your search for an affordable, effective policy from a reputable insurance company.
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