Teen Auto Insurance Discounts

Teens pay more for auto insurance than any other group of drivers on the roads today. Male teens pay even higher rates than female teens. Parents can expect their auto insurance premium to increase by 50 to 100 percent after adding a teen to an existing policy — no matter how many years you have been a loyal customer.

So, why are auto insurance companies so tough on teens? Auto insurance companies raise rates when teens are involved based on teen accident statistics and risky teen driving behaviors. 

Based on statistics published by the National Highway Traffic Safety Administration (NHSTA), 16-year-olds have the highest crash rates in the nation. Auto crashes are also the No. 1 cause of death among teenagers in the United States today. In addition, teen car crashes cost the United States more than $40 billion a year.

Drinking and driving is the riskiest behavior among teen drivers today. It causes an estimated 31 percent of all fatal accidents in the 15 to 20 age group. The NHTSA also reports that 25 percent of all teen drinking and driving accidents are the result of a blood alcohol content (BAC) of 0.08 percent or higher. Just think, adults with a blood alcohol content of 0.08% are considered legally drunk. Teens with a blood alcohol content of 0.02 percent are considered legally drunk. Other risky teen driving behaviors include talking on cell phones and texting while driving (56 percent of teens engage), speeding to keep up with traffic (69 percent), distractions from multiple passengers (47 percent) and speeding up at yellow lights (64 percent).

Most states have a Graduated Driver Licensing (GDL) program in place to teach teens the dangers of distracted driving, DUI, and other risky behaviors. Parents must do their part to educate and keep teens safe on the roads as well, but raising a perfect driver is not enough to qualify for big discounts on teen auto insurance. Maintaining an excellent record by following state driving laws does help, but auto insurance companies also offer mush lower rates and bigger discounts for enrolling in a defensive driver or driver safety course, getting good grades and owning certain types of cars.

Defensive driver or driver safety courses

Auto insurance companies may offer discounts up to 15 percent for successful completion of a defensive driver or driver safety course. Courses must be completed at an approved traffic school. Your local Department of Motor Vehicles will have a list of state-approved schools. After your teen has completed the course, he or she will receive a certificate of completion. You must present this to your auto insurance carrier in order to receive the discount.

Good grades

Most insurance companies offer discounts for good grades. Maintaining a B average or better can lower insurance rates anywhere from 10 to 20 percent. You will have to present an official transcript to your auto insurance carrier in order to receive the discount.

Skip luxury and high-performance vehicles

If you’re trying to save on teen auto insurance, the worst thing you can do is buy your teen a luxury or high-performance vehicle. These types of vehicles cost more to insure (in general), but for teens, you can expect to pay more for the car insurance than you do for the car note. Be practical. Purchase a sedan, economy or used car. These types of vehicles are the least expensive to insure.

Whether you are adding your teen to an existing auto insurance policy or you plan to shop for a new one, you should always have the following information handy:

•Certificate of completion (driver safety course, defensive driver course)

•Copy of car title

•Copy of transcripts


•Teen’s driver’s license or permit

Tips and advice: Parents, you can help your teen keep his driving record clean by limiting the number of passengers allowed in the car and setting a curfew. Remember, 41 percent of teen accidents occur between 9 p.m. and 6 a.m., and limiting the number of passengers in the car can decrease your teen’s accident risk by 50 percent.