If you recently added a young driver to your car insurance policy, you may have found yourself shocked by your increase in premium. We constantly get calls asking the question, “why is there THIS big of a car insurance premium increase after adding my child to my policy?”. We want you to be prepared and informed for every insurance situation, so of course, we have answers!
First and foremost, we know your child isn’t a reckless driver just because they are young. Insurance companies, however, do not always feel the same. Considering a 2013 study from AAA found teen crash rates significantly higher than other age groups, insurers feel the need to compensate. With that compensation, unfortunately, comes the need to increase premium due to increased risk.
Some of the key factors to know about before adding your child to your policy include:
Younger driver=higher premium. For the average 16-year-old, there will be a 96 percent increase in premium (this varies widely from state to state), while a 19-year-old could lead to a 60 percent increase.
Gender plays a large role in determining rates. Adding a teen female to your policy will, on average, cause rates to jump 67 percent, while a male teen driver averages a whopping 92 percent increase. This is because males are in more accidents.
Location is a big deal. Some states (like Pennsylvania and North Carolina, where we are licensed) do not allow gender as a factor when calculating rates and Hawaii does not allow age.
So we know your next question, “these are all problems, what are the solutions?”. We want you to always have the best coverage at the best rates, so our agents guarantee they will do everything in their power to offset the cost of adding a young driver. With that being said, there are programs and tools to help:
Good student discounts provide a decent percentage decrease. Most of our carriers offer this discount to students who have over a 3.0 in high school or college.
Telematic programs like snapshot, which monitor driving habits, also have significant benefits. If your teen is not speeding, slamming on their breaks, and is a generally safe driver, this discount is perfect.
- Does your child go to school more than 100 miles away? Some carriers provide a discount if they live on campus without a car.
- You may be eligible for a low mileage discount if your child is driving the car less than 10,000 miles a year. This is especially helpful if they only use it for transportation to local places like school and work.
If you find yourself with a car insurance premium increase after adding your child to your policy, most importantly, reach out to your agent! They will shop around and ensure that despite the increase, you have every discount possible.