Consumer Reports: Cutting teen car insurance costs

ByConsumer Reports
Tuesday, December 29, 2015
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Getting a driver's license is a big milestone for teenagers. But along with that landmark is the worry of rocketing insurance premiums.

Getting a driver's license is a big milestone for teenagers and their families. But along with that landmark is the worry of rocketing insurance premiums. Consumer Reports research shows that adding a teen to your car insurance policy doesn't have to break the bank.

Sixteen-year-old Kylie Schocker's father, Darin, is looking forward to her being able to drive on her own. But he's dreading the surge in his car insurance premiums.

"You know, I'm just going to have to work more. You have to work more to pay for more, and eventually when I am an old man she can pay my insurance," Schocker said.

Consumer Reports exhaustive study of insurance rates found just how high rates go up when you add a teen driver. Researchers checked premiums for a sample family: a 55-year-old couple who add a 16-year-old driver to their policy.

"The average increase when you add a teen driver is 90 percent more than what you're already paying. But the size of the increase really depends on where you live and which insurer you use," said Margot Gilman, Money Editor, Consumer Reports.

The biggest increase for adding a teen driver was in North Carolina at 159 percent. That's more than $1,600 extra per year. The smallest was in Hawaii at 16 percent, an additional $312 per year.

"Before you add a teen driver to your policy, it pays to shop around rather than just accept whatever increase your insurer charges. We found that prices can vary dramatically depending on the insurance company," Gilman said.

For instance, in California that sample family would see an increase of around $3,400 a year with Allstate Indemnity, but only $905 a year if they switched to Auto Club insurance.

There's another way to save.

"Most insurers in most states do offer a discount to families with students who can show proof of good academic performance," Gilman said.

Be sure to check with your insurer to see if your teen qualifies for this discount.

For Consumer Reports' sample family, the good-student discount averages $263 a year.

What about having your teen take a driver's education course? Consumer Reports found for its sample family that the average savings were only $63 per year.

Find out more on Consumer Reports' website.

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