The terrible teens are coming to an end — let the savings begin.
While it may seem like an intermediary point in terms of life-events, turning 19 has huge impacts on your teen's insurance premiums. The average 19-year-old saw $1,111 in annual savings on their car insurance premium from the previous year! All other metrics constant, these savings are due to the way in which you are perceived by your insurance company. You're starting to build a history of having insurance, as well as a longer driving record. You may also be on track for higher education (which decreases your premium as well) so in general, you're not as scary to an insurance company as you once were.
Despite this, 19-year-olds still pay $1,874 more per year than the national average. So, what are some ways you or your child can save as a 19-year-old driver? Let's break it down by your company, your age, your gender, your location, and by vehicle.
In our analysis of five major insurance companies to determine the cheapest car insurance for young teens across the U.S, we learned that Geico provided the lowest rate with all other metrics constant.Progressive comes in second. While our profile surveyed a 17-year-old added to their parent's policy and we are discussing 19-year-olds, you should look at this data as a jumping off point when looking for car insurance.
|Location||State Farm||Allstate||Geico||Progressive||Liberty Mutual|
As you can see, your age has a big impact on your premium! Between the ages of 16-85, 16-19-year-olds pay more than any age group. This begins to fall as you enter your 20s and steadily declines until you're in your 60s! The data listed below is rating a 19-year-old on their 50-year-old parent's plan with two moderate 2012 vehicles.
Gender is only really a rating factor when you're a young driver. So, for 19 year-olds, we will definitely see a difference between men and women drivers. Young males pay $235 more 6-month policy period than young female drivers. Fair or not, car insurance companies see young males as statistically more likely to be a risky driver. Again, any time there is a chance of financial risk, an insurance company will charge a higher premium. If you're a young male driver, take comfort in the fact that as you age, the difference between your premium and a woman's decreases significantly. In 2016, studies found that men only pay $1 more than women.
Where you live also plays a big role for how much you and your young driver will pay for an insurance premium. As insurance is state regulated, variations in laws guarantee there will be discrepancies in premiums. Most states require a mandatory minimum liability coverage for other drivers and their property, but the monetary amount of this coverage varies. If you live in a state with high insurance regulations, such as Michigan, you can expect to pay quite a bit to insure your 19-year-old. On the other hand, states with a low population density, such as Michigan's neighbor Ohio, tend to have lower premiums than states with more people. Keeping with the idea of risk management, the more drivers your state has, the more likely you are to be in an accident and insurance companies will have to cover that additional risk.
When you think of car insurance, you should think of it as a pairing between drivers and cars. If you have a statistically risky driver (aka, a teenager) paired with a high-performance vehicle, an insurance company is going to see that combination as risky assets and charge accordingly for them. By rule, any vehicle with a high MSRP will have a high premium because of the expense your insurance company will be charged to replace it. So, if you’re looking for a cheaper rate 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 19-year-olds, let’s talk about ways to save.
Because your rate can change every 6 months, its important to look at different companies to make sure you're getting the best possible rate on your auto insurance. Only with us can you see hundreds of different companies at once.
If you have above a 3.0 GPA (a B average), you might be eligible for a Good Student Discount. Your insurance company will require proof of this, usually in the form of a report card or transcript. But paired with the Defensive Driver Discount mentioned below, the savings are worth keeping your teen's grades up.
Average Savings for Good Student and Good Driver Discount
As previously mentioned, the Defensive Driver Discount encourages young drivers to take a professional driving course. The logic behind this is that drivers who have completed this course are less likely to receive a citation or get into an accident. Not every insurance company offers this discount, so ask your insurance company beforehand!
Commonly applied to college students, if your teen student is going to be more than 100 miles away from the listed residence you can receive what is called a Student Away From Home Discount. Because your teen lives so far away, insurance companies view them as less likely to drive your insured vehicle, thus the probability of a claim payout declines. The amount varies per insurance company, so consult them for details.
Insurance has a nasty habit of being a double-edged sword; it's great to have but will hurt ya if you use it. In order to keep your teen's premiums low, avoid practices that can lead to citations or at-fault accidents which will drastically raise your already-high premium. In a state-by-state breakdown, DUIs and racing (on average the most expensive citations) raise insurance premiums at least 40%. Moreover, most insurance companies offer a good driver discount which is dependent on a clean driving record.
Telematics, also known as usage-based insurance, uses in-car devices that motor the way in which you drive to determine your premium. Currently, insurance companies use rating factors that are and aren't directly related to your driving record such as your credit score and, as it relates to this subject, your age. So, if you're one of safe teenage drivers, you might consider this in-car system as a better indicator of your premium. Here are some companies that participate. Bear in mind, however, that not every state participates in this program - regardless if your company is listed.
|Progressive's SnapShot||Average of $130|
|Allstate's Drivewise||Average of 10-25%|
|State Farm's Drive Safe and Save||Up to 15%|
|Nationwide's SmartRide||Up to 40%|
|Liberty Mutual's RightTrack||Average of 5-30%|
In the final year of being a teen, 19-year-olds start to see some savings. On average, 19-year-olds pay an average of $557 less than 18-year-olds for auto insurance. And while the 19-year-olds pay almost twice the national average, there are still ways to save. Using the data we collected during our company analysis, we recommend beginning (but not ending) your search for auto insurance with Geico and Progressive. Considering the Good Student, Defensive Driver, and Student Away from Home Discounts as well is another good way to start on saving on car insurance for 19-year-olds. Still, the absolute best way to save on car insurance is to look for rates every 6 months. Only with the The Zebra can you shop over 200 car insurance companies at once.
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