Kathy Kristof
Devil in the Details
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moneywatch.com / Saving / Devil in the Details
Teenage Driver? What Happens to Insurance Rates
By Kathy Kristof | Aug 15, 2011
2
If you’ve got a teenager about to get his or her driver’s license, get ready for a world of hurt. An analysis by rate-shopping site CarInsurance.com found that a teenage driver could cause auto insurance rates to double — or worse.
However, the impact varies dramatically based on where you live. Naturally, the type of car you drive, the grades and gender of your driver can matter too.
CarInsurance.com ran comparative quotes for a hypothetical couple, who wanted to add their 16-year-old son to their two-car policy. To get an idea of how much geography plays into the question, they ran before and after quotes in 25 cities, ranging from Boise to Seattle; Berwyn, Pa. to Culver City, Ca. The results were universally unpleasant.
Rates for this hypothetical couple — two drivers in their late 40s — with perfect records and paid-off vehicles, went from inexpensive to dear in a heartbeat. The couple drove a 2008 Toyota Camry and a Ford Expedition and got extensive coverage, as you might if you owned a home and were concerned about personal liability.
The lowest six-month rate was $356 in Berwyn, Pa. But add a teenage boy to this policy, and the Berwyn family’s rate soared 164% to $941, says CarInsurance.com editor Des Toups.
And that wasn’t the worst of it. Add a teenage boy in Scottsdale, Arizona, and your premium is likely to rocket 243% — from $483 to $1,659, Toups said. The percentage hike is slightly smaller in Culver City — some 232%. But the total cost of insurance was the highest in this Los Angeles suburb, where this hypothetical couple would have paid $1,230 without insuring the teen, they’d pay $2,854 with the teen.
On the bright side, the pain is significantly less severe if the teen is a girl. The rate for this Culver City family would rise just 83% to $2,253 if they added a daughter to their policy, rather than a son.
Insurance rates vary dramatically based on a variety of factors, though, says Toups. If your boy is driving a mini-van it will cost significantly less to add him to the policy than if he’s driving a sedan. A muscle car? Forget about it. You don’t even want to know.
The main message, says Toups, is that you’d be wise to get educated about what rates are likely to be and how you can mitigate the cost. In addition to watching the kind of car you allow your child to drive, make sure the child keeps up his or her grades. Good students often score discounts of 20% or more. And if you’re contemplating buying your teen a car, check rates with a site like CarInsurance.com to see how much more a sedan costs to insure than a mini-van.
Devil in the Details
Bio
RSS
Contact Kathy Kristof
Click Here
View all posts
moneywatch.com / Saving / Devil in the Details
Teenage Driver? What Happens to Insurance Rates
By Kathy Kristof | Aug 15, 2011
2
If you’ve got a teenager about to get his or her driver’s license, get ready for a world of hurt. An analysis by rate-shopping site CarInsurance.com found that a teenage driver could cause auto insurance rates to double — or worse.
However, the impact varies dramatically based on where you live. Naturally, the type of car you drive, the grades and gender of your driver can matter too.
CarInsurance.com ran comparative quotes for a hypothetical couple, who wanted to add their 16-year-old son to their two-car policy. To get an idea of how much geography plays into the question, they ran before and after quotes in 25 cities, ranging from Boise to Seattle; Berwyn, Pa. to Culver City, Ca. The results were universally unpleasant.
Rates for this hypothetical couple — two drivers in their late 40s — with perfect records and paid-off vehicles, went from inexpensive to dear in a heartbeat. The couple drove a 2008 Toyota Camry and a Ford Expedition and got extensive coverage, as you might if you owned a home and were concerned about personal liability.
The lowest six-month rate was $356 in Berwyn, Pa. But add a teenage boy to this policy, and the Berwyn family’s rate soared 164% to $941, says CarInsurance.com editor Des Toups.
And that wasn’t the worst of it. Add a teenage boy in Scottsdale, Arizona, and your premium is likely to rocket 243% — from $483 to $1,659, Toups said. The percentage hike is slightly smaller in Culver City — some 232%. But the total cost of insurance was the highest in this Los Angeles suburb, where this hypothetical couple would have paid $1,230 without insuring the teen, they’d pay $2,854 with the teen.
On the bright side, the pain is significantly less severe if the teen is a girl. The rate for this Culver City family would rise just 83% to $2,253 if they added a daughter to their policy, rather than a son.
Insurance rates vary dramatically based on a variety of factors, though, says Toups. If your boy is driving a mini-van it will cost significantly less to add him to the policy than if he’s driving a sedan. A muscle car? Forget about it. You don’t even want to know.
The main message, says Toups, is that you’d be wise to get educated about what rates are likely to be and how you can mitigate the cost. In addition to watching the kind of car you allow your child to drive, make sure the child keeps up his or her grades. Good students often score discounts of 20% or more. And if you’re contemplating buying your teen a car, check rates with a site like CarInsurance.com to see how much more a sedan costs to insure than a mini-van.
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