Your family is getting older. One of the kids will soon be a teenager and begin to drive the family car. Your concerns begin to rise regarding what type of hit the family budget will take when an underage driver is added to the car insurance policy. Your fears are justified.
If your new driver is a daughter, the rate increase will not be as painful as the increase for a son would be.
Women are always rated more favorably than men for car insurance premiums. This does not mean that the increase for adding a female teen to the policy will not be significant. On the cost scale, a teen driver either gender will fall somewhere between a driver with a clean record and a high risk driver. If you have multiple speeding tickets or a DUI on your record, you may find the cost of adding a teen driver to seem reasonable.
The exact cost of adding on a teenage driver will be influenced by many factors in addition to age.
The area where you live has a big impact on car insurance costs. If you live in a higher risk area, the price you will pay for the young driver’s insurance will be bigger. The same is true for the type of vehicle, use of the car and the number of miles that it is driven.
If the adult drivers on your policy have clean records, teen drivers will cost about twice as much as one of those drivers.
If you are a two-driver family, your insurance costs will double when you add the teen as a third driver. With a reasonable type of vehicle in a moderate area in the Midwest, an adult driver will pay about $40 per month for full coverage insurance in 2010. This would mean that going from 2 to 3 drivers will raise the rate from $80 to about $160 per month. If you add a third vehicle, increase the monthly cost by another 25% or more.
There is some good news if the teen is a great student with high grades and has taken driver’s education in school.
These two factors can knock off about 5 to 10 percent each from the premium increases due to the teenage driver. The good grades have to be maintained. Keeping a clean driving record with no accidents will help to sustain the lower rates.
In more populated areas or regions with a higher cost of living, further adjustments are necessary.
People who live in these types of places need to add another 50 to 100 percent to the cost of their policies. If you drive excessive miles, increase your estimate for insurance about 15% over your base. Should you choose to furnish your teen with an expensive sports car, you once again expect to pay 50% more for the insurance.