Gephardt: The high cost of insuring teen drivers; what parents can do
Apr 9, 2021, 10:15 PM | Updated: Oct 12, 2022, 1:00 pm
SALT LAKE CITY, Utah — If you have a teenager in your house, you probably know all too well how they are just itching to drive. While that is hard enough on your nerves, insuring a teen driver will certainly be hard on your wallet, but there are some things parents can do to keep the damage to their budget from being declared a total loss.
“In Utah, specifically, adding a 16-year-old driver costs a family of three about $5,600 per year,” said Andrew Hurst, a data writer with personal finance website, LendingTree.
LendingTree recently crunched the numbers on insurance rate data around the country and found the cost of adding a teen to a policy costs a combined total of $33,091 for a third driver from age 16, until he or she reaches age 22.
“The reason teen drivers are higher is because the insurer is expecting them to not be as experienced behind the wheel and thus make poor decisions,” said Hurst. “Teenage drivers are usually viewed as more impulsive.”
Teens often can struggle judging the gaps in traffic, going the right speed for conditions and turning safely.
“They might make any range of bad decisions,” said Hurst. “Insurers kind of price that into the premium for teenage drivers.”
Hurst said there are ways to lower the cost.
Taking a defensive driving course helps, as well, if your teen keeps their grades above a B average. That will earn them a good student discount, which averages 6.3% in Utah, according to Hurst.
He said, in general, it is cheaper to add your teen to your existing policy, rather than buy a separate policy, and you should compare quotes from several different carriers.
“You can find lower rates for a family of three, or even for an individual teenage driver,” Hurst insisted. “It’s just about the sort of time you put into shopping around.”
Rates do ease each year as your teen gains experience. LendingTree’s study found the average annual rate in Utah will drop from $5,600 at age 16 down to $3,600 by the time your child reaches age 24.
Now, insurers will reward parents that give their children a safe car to drive and not just an old, beater that’s cheap to insure. Hurst said to make sure it’s got functioning air bags, anti-lock brakes, seatbelt alarms and power steering to maximize those insurance discounts.