Question: How Much Does Adding A Teen To An Auto Insurance Policy Increase The Premium?
Answer (from NY Times; subscription): 78% or $671!
More from the Times article:
An annual analysis by insuranceQuotes.com, a rate comparison site, found that adding a teenager still increased annual premiums substantially, but the magnitude of the increase has been falling over the past few years.
Adding a single teenager to a policy caused annual premiums to increase an average of 78 percent, or $671. But rate increases have been decreasing since 2013, when the average increase was 85 percent.
Laura Adams, senior insurance analyst with insuranceQuotes, said that factors in the trend may include safer automobile technology, a dip in the number of teenagers getting driver’s licenses and the continued impact of “graduated” driving programs, which place restrictions on new drivers until they gain more experience on the road.
So, what strategies can your students use to minimize this cost? The article offers a few:
- Get good grades
- Take a driver’s education course
- Have parents drive along and coach their novice drivers (this will yield a lot of grimaces, for sure!)
- Abide by the state rules for curfews and number of people in a car
- Use an app to reduce distracted driving (here’s one called Cellcontrol)
Here are some NGPF resources to bring insurance to life for your students:
About the Author
Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.
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