How Much Car Insurance Increases When Adding a Teen Driver

I’m working with a number of clients who are parents of teens. They usually call me when their son or daughter is about to get their learner’s permit to ask several questions relating to their car insurance policy and their teen who’s about to drive. The questions include when they have to add them to their car insurance policy and does it make a difference whether they do the classroom or parent led driver training. The brave parents want to know what it will cost to add their teen driver to their car insurance policy when they get their license!

In the past, I’ve usually told parents that most Texas car insurance policies will have a rate double, plus or minus a few percentage points, what the parents are currently paying when their son or daughter gets their driver’s license. I didn’t base that estimate on any statistics. It was based on what I’d seen happen as an agent with my clients over the past few years.

It turns out, I was pretty accurate even without the statistics. Insurance Journal published an article last week that provided me with some statistical evidence worth knowing.

  • The average car insurance rate increases by 79% nationwide
  • This is down from the nationwide average rate increase of 84% in 2013
  • New Hampshire has the highest rate increase of 125%
  • Hawaii has the lowest rate increase of just 17%
  • Texas is in 7th highest with an average rate increase of 92%

Gender continues to play a role in the rate too with youthful male drivers costing more than female drivers. The national average rate increase is 91% for males versus 67% for females. This gap is shrinking but not as quickly as thought a few years ago.

Most people understand the rationale behind the rate increases even though they don’t like them. Teen drivers between the age of 16 to 19 are three times more likely to be involved in a fatal car crash than young adults aged 20 or older according to an Insurance Institute for Highway Safety (IIHS) study. Youthful drivers who are 16 or 17 are nearly twice as likely to be involved in a fatal car wreck as 18 and 19 year olds.

To help keep rates lower than they could be I inform my clients of the two discounts they need to be aware of prior to their son or daughter becoming licensed. These are the good student discount and the driver’s education discount. As long as a student maintains and A/B average (yes, there can be a C or two), they are rewarded for their good grades. They’re also rewarded for taking driver education whether the parent leads it or a driving school.

It’s also pretty common to see a small rate decrease once the teen driver turns 19 when they have 3 years of driving experience and another when they turn 21 having 5 years of driving experience. The best car insurance  rate decrease occurs when they turn 25 and are rated as an adult. What do you think? Share your questions, comments, and experiences with me on my Facebook, Google +, and LinkedIn pages. I’d love to hear from you!

Evie Wise
Evie Wise


Evie Wise
Evie Wise

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