How much will my car insurance rates rise after adding a 16 year old?

Your son or daughter has just received their drivers license. Now, the big question is how much will adding one of them to my policy affect my car insurance rates? This question depends upon many factors including what kind of car will he or she drive, whether it's for your son or daughter (yes, it shouldn't be a shock that sons cost more than daughters), whether or not he or she completed a drivers education course and even their grades.

It shouldn't be a shock that your 6 month premium will rise considerably so sit down and get ready to hear the sobering news. According to a very recent study completed by carinsurance.com, your rates will rise anywhere between approximately 90% to a whopping 250%! They completed insurance quotes for the typical couple in their upper 40's with a good driving record and two average vehicles and then added a 16 year old to the policy. They compared increases in 25 cities spread out across the US. The average dollar increase in the 6-month premium was $1,014 every six months.

The reason for this is that all new teenage drivers are considered high risk right out of the gate. They have no driving history so insurance companies have no idea what to expect. It's a known fact that new teenage drivers are 3.7 times more likely to be involved in an accident and 1.8 times more likely to get a traffic ticket compared to the average insured adult.

What can I do to minimize the impact of a new teen driver on my policy?

Well, unfortunately not too much. There are a few things you and your new teen driver can do to help to mitigate the increase and lower your rate by as much as 15%:

1. Get good grades. Teens with GPA's above 3.0 may qualify for a good student discount.
   
2. Have them complete a drivers education course. If one is offered at their school, then make sure your son or daughter completes the course and passes the tests.
3. Only let them drive a lower risk car. This should be a no-brainer. Only put them down as a part time driver of your cheapest to insure car. Typically, this is a sedan or minivan. Nothing sporty.

One final suggestion to lower your overall cost of adding a teenager to your policy would be to increase your deductibles and lower your coverage amounts nearer to your state's minimum liability requirements. Since a teen is more likely to cause liability damage in an accident, it may also be worth it to purchase umbrella insurance coverage in conjunction with state minimum liability coverage. Umbrella insurance covers all liability damages that you or anyone else in your household may cause above and beyond your base insurance coverage. The overall cost may be much cheaper than having your teen on your policy at your current higher coverage amounts. Umbrella policies only cost a couple hundred dollars per year typically. Check with your insurance agent to see if this is appropriate for you and whether or not your teen's excess auto liability would be covered under the umbrella insurance policy.

Other than these few suggestions, there isn't much other than time and a good driving record that can help to lower this cost.

Do I have to add my teenager to my policy?

In most cases, all licensed drivers must be added to your car insurance policy. The vast majority of states do not allow a teenager to be on the title of a vehicle and they typically can't have their own insurance coverage. This is due to the fact that they are not old enough to sign contracts. Even if it was allowed, the likelihood of them getting any coverage would be almost zero.

If you're about to add a teenager to your policy , then you should definitely look around find the lowest rate you can find. Since your teenager is considered a high risk driver, insurance premiums will vary by as much as a few hundred dollars every six months. If you are shopping for car insurance and want to compare rates, then we suggest that you compare policies and rates from several insurers. We recommend Insureme who allows you to compare several rates from dozens of major, highly rated insurers such as Met Life, Allstate, AIG, and more. They are also unique in that they include independent insurance agent quotes as well.

This should not be considered financial advice which can only be given by a qualified financial professional. We suggest you consult with a qualified financial planner and/or insurance professional who is most qualified to consult with you regarding policy decisions. Many factors are involved in your policy premium some of which may not be mentioned in this article. Any suggestions mentioned in this article are the authors opinions only and should not be considered as definitive financial advice. We are an affiliate of the Bankrate Insurance Network.

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