It's no secret that adding a
teen to your insurance policy
will raise your rates dramatically.
Most insurance experts tell parents to expect rates to at least
double and in some cases triple -- a point at which many
exasperated parents mutter to themselves, "It's a Ford, not a
They're correct. Actually, the Ferrari is cheaper.
Why are teens so expensive to insure? Because they are really
bad drivers. They get tickets. They crash a lot. They go
cruising with their peers
and take stupid chances.
Car accidents are the leading cause of death among 15- to
20-year-olds. About eight teens a day are killed in automobile
accidents, according to the Centers for Disease Control and
Prevention. They are four times more likely than adults to be
involved in an accident, and they engage in risky driving behavior
at a rate five times that of experienced drivers.
All of these factors add up to a huge premium increase.
Buy your kid a car -- or yourself a Lamborghini?
To illustrate the Porsche-or-teenager dilemma, we took at look
at a 40-year-old single father in Fresh Meadows, N.Y., a
middle-class section of Brooklyn. Driving a Nissan Pathfinder LE
and carrying limits of $100,000 bodily injury liability per person
($300,000 per accident) and $100,000 property damage liability with
a $500 deductible, he would receive quotes ranging from $3,426 to
$3,992 a year.
Now add Junior, his 16-year-old son, to the policy, driving a
2012 Nissan Versa. The range of rates zooms to $5,796 to $12,741 a
year. Even if Dad shops around and buys the very cheapest policy,
he's on the hook for an additional $2,370 a year.
Now for the big question: What kind of car could he be driving
if he tells Junior to take the bus instead of getting a
Eric DeBoer, a spokesperson with specialist
, says there are plenty of high-powered, premium-nameplate cars
that he could be tooling around in.
The $90,000 2012 Porsche 911 Carrera can be covered for about
$2,500 a year, DeBoer says. Want to trade in the Pathfinder and get
a midlife crisis special? Consider a 2012 Lamborghini Gallardo
LP550-2, valued at $200,000. Hagerty would cover it for $5,034 --
still less than the $5,800 our driver would be spending to cover
himself and Junior.
On older exotic would push the premium well below the cost of
adding a teenager. For example, it's possible to pick up a
1990 Ferrari Testarossa
for around $46,000 off the duPont Registry. According to DeBoer,
you can insure this car for a mere $1,262 a year, about half the
cost of insuring Junior.
Trust us. Even the surliest teen will still feel pretty good
exiting this ride when you drop him at the bus stop.
No teenagers allowed
Remember to lock up the keys, though. If your teen manages to
get the car out and has a "Risky Business"-style U-boat event, you
will be on the hook for some major damages.
When using a specialty insurer like Hagerty, owners are required
to sign a named driver exclusion form that basically voids the
coverage if your teen is behind the wheel. According to DeBoer, "We
will not provide exotic car coverage for teenagers or anyone under
the age of 26 years old. We require 10 years of driving experience,
and they have to have prior practice driving exotic cars."
A few other caveats when it comes to insuring an exotic car:
Hagerty limits the mileage to 2,500 miles a year (though you can
pay extra for additional miles). The company also requires a fully
insured daily-driver car for everyone on the policy, so your
precious exotic isn't a sitting duck in the Walmart parking
9 tips for parents
Maybe you'll get lucky and your teen will have no interest in
getting a license.
But there is a good chance he or she will start bugging you
about it long before that 16
birthday rolls around. Penny Gusner, CarInsurance.com's consumer
analyst, offers this advice:
- It is mostly the teenager that drives up your rates, not the
car he or she drives. Even if you simply hand over the keys to
the family minivan, you will feel a huge increase in rates.
- The "inexperience surcharge" varies greatly from insurer to
insurer. Shop around; the difference can be thousands of
- If your insurance company allows it, ask that your teen be
assigned to your least expensive car.
- Demand good grades. A good-student discount is good for a 5
to 25 percent cut in rates.
- If you buy an additional car, adding it to the parents'
policy is almost always cheaper than getting a separate policy
for the teenager.
- If you buy your teenager a newer car, review our list of the
best cars for teens.
- If you buy your teenager an older car, consider our rules of
thumb about dropping comprehensive and collision coverage.
- Look into programs offered by insurance companies that let
you keep digital tabs on your teens driving behavior.
- Lastly, shortcuts and technicalities can come back to bite
you. If you skirt the truth, chances are you won't be covered for
your teen's almost inevitable accident.