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Being on the edge of adulthood might be scary, but your insurance doesn't have to be
For a car insurance company, insuring a 17-year-old driver is a considerably risky undertaking. Statistically speaking, 17-year-olds are more likely to engage in dangerous driving practices, which insurance companies see as monetarily risky investments for themselves. Because of this, car insurance companies protect their interests from this risk through higher premiums — which results in higher insurance costs for you. Because of this, it shouldn't surprise you the average 17-year-old in 2016 paid an annual premium of $5,403 for car insurance compared to the national average of $1,323.
In addition, the age of your young driver, the car insurance company you chose, your gender, your location, and what car you drive all significantly affect the cost of car insurance. So, in order to break down car insurance for 17-year-olds and the best ways to save, we are going to examine all of them. Starting first with your car insurance company. Let's get started.
In an experiment to determine which car insurance company was the cheapest for teens, we discovered that Geico provided the lowest premium with all other metrics constant with Progressive coming in second. Our profile was a 17-year-old added to their parent's policy across 5 zip codes in the US. If you don't fall into our specific profile or into the zip codes we surveyed (which is highly likely), use our findings as a starting point while looking at many different companies to find the best rate for you and your driver. Because your teen's rate changes so much as they age, we suggest shopping for car insurance every 6 months. Do that here with us.
|Car Insurance Provider||Average Premium|
Regardless of the car insurance company you chose, the big reason why you're going to be paying higher rates for your 17-year-old's premium is simply because of their age. Out of every age group, drivers between 16-19 pay the most for car insurance. Rest assured, however, you begin to see some savings once your driver turns 19 and again when they turn 21 and 25. This data is the average rate for a 6-month policy for a 17-year-old added to a family plan in which the parents are both 50-year-olds driving a 2012 Honda Accord and a 2012 Ford Escape.
As your young driver or drivers ages, gender becomes less impactful on their premium. But while they're still a young driver, it’s still a big rating factor. In fact, young male drivers are seen as a riskier customer than a young female driver. Car insurance companies see them as more likely to take risks while driving. This risk, in their eyes, can equate to more claims payouts (which means they lose money). On average, 17-year-old males cost $320 more to insure per 6-month policy period than a young female driver. But don't lose hope! Remember: as you age, the insurability difference between men and women becomes less significant. And in fact, some states don't use gender as a metric for determining car insurance premiums.
Car Insurance Premiums by Gender
Because auto insurance is zip-code specific and state-regulated, it will vary based on where you and your young driver live. Generally, most states require a mandatory minimum liability coverage but the limit of this requirement varies. Some states require higher limits and mandatory additional coverage that other states do not. Michigan, for example, is a No-Fault state and requires drivers to carry an unlimited amount of Personal Injury Protection which increases the costs of car insurance premiums significantly.
Furthermore, the number of people in your state can also impact your child’s car insurance rate. States with a low population density, such as Midwestern states like Ohio, tend to have lower premiums than states with more people such as New York. Keeping with the idea of risk management, the more drivers your state has, the more likely you are to be in an accident. Moreover, if you live in a coastal area that is susceptible to hurricanes (Florida and Louisiana), you can definitely expect this to impact your car insurance premium. All of which means your car insurance company will protect themselves through higher premiums.
Annual Premium for the Most Expensive States for 17-Year-Olds
The type of car your teen drives definitely affects your car insurance premium as it does with anyone. For example, a teenager with a brand-new Mercedes is, without a doubt, going to have a higher premium than a teenager with a new Toyota Corolla. As a good rule-of-thumb, any vehicle with a high MSRP will have a high premium, at the expense your car insurance company who will have to replace it. So, if you’re looking for a cheaper premium for your teen driver, you should stick to a simple sedan or van.
Now that we’ve talked about why it is so expensive to insure 17-year-olds, let’s talk about ways to save.
Taking a professional driving course that focuses on highway safety and how to be a smart and defensive driver is another way to save some extra money on you or your teen's car insurance premium. While it is a pretty common discount, your car insurance company will usually require proof of this such as a receipt. Not every car insurance company offers this discount, so ask your insurance company beforehand!
Having a 3.0 grade point average and above can save you quite a lot on your premium. Like the defensive driver discount, your car insurance company still requires proof every policy period (6-12 months depending on your policy) that you or your student meets the requirements. A transcript usually serves as enough proof for the discount to be added.
Average Savings for Defensive Driver and Good Student Discount
having to pay for their high premiums. But unless your 17-year-old has some insanely high-paying job and can afford to pay nearly $6,000 or premium per year on car insurance, it's actually cheaper to keep them on your policy. On average, it costs $57 more per 6-month policy period for a 17-year-old to be on their own policy than to be on the family plan. While that $57 doesn't seem like a lot of money, you should be aware that most car insurance companies require anyone who is living in your household and is above legal driving age to be either added as a covered driver or removed entirely . . . . So, that $57, is definitely a silver lining.
Keeping a clean driving record for your son or daughter is an absolute necessity. Distracted driving, reckless driving, or being in an at-fault accident can cause serious damage to your car insurance premium at an already expensive time. In a state-by-state breakdown, DUIs and racing (seen on average the most expensive citations) raise insurance premiums at least 40%. Moreover, most car insurance companies offer a safe driver discount which is dependent upon a clean driving record.
While this suggestion isn’t age-specific, young driver’s propensity to cause damage to your vehicle and the monetary implications of that make it extra relevant. “Being smart with your claims” basically means don’t use your collision coverage unless you total your vehicle. Whether you know it or not, using your collision coverage is often seen as an at-fault accident to an insurance company. Now, most insurance companies will rate (i.e., charge) you for an at-fault accident for 3 years. Here’s a handy chart to see how one claim and affect your premium over these 3 years.
Average Increase after at At-Fault Claim
|Increase at 6 months||Increase at 12 months||Increase at 3 Years|
So, when thinking about filing a claim, follow our checklist:
Again, this coverage isn’t exactly age-specific but is helpful. Unlike your home or fine wine, a vehicle actually loses value over time. So, if you’re giving your young driver an older vehicle to drive (which is a good idea), the coverage it once had might not be necessary anymore. Another good rule of thumb in the car insurance world is if a vehicle is worth less than $4,000, you probably don’t need physical protection. Cutting physical protection, otherwise known as comprehensive and collision coverage, can half your premium!
Average Annual Premium by Coverage Level
|Coverage Level||Average Annual Premium|
As you can see, there are many factors that go into your child's car insurance premium. Because of this, it's important to shop around for car insurance with as many different companies as possible every 6 months to make sure you're getting the best rate. Only with The Zebra can you see hundreds of different premiums at once.
The moral of the story is simple: car insurance at 17 is going to be a pricey time. While what you drive and what you live will have an effect any at age, the big piece of this puzzle is the fact that young drivers represent major red flags to car insurance companies. In your search for cheap car insurance, you should use the insurance company data we presented as a starting point, starting, but not ending, with Geico and Progressive. Next, consider the additional discounts we suggested as well as being mindful of your coverage and claims. As always, shopping around and getting free insurance quotes is another great way to get the best coverage at rates you can afford.
If you're still looking for ways to save on car insurance, or information regarding car insurance, see our additional articles here: