Cutting Costs for Teen Driver's Insurance

FRESNO , Calif. (KFSN) -- 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.

16-year-old Kylie Shocker'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 gonna 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."

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. Margot Gilman with Consumer Reports says, "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."

The biggest increase for adding a teen driver was in North Carolina - 159% - that's more than $1600 extra per year. The smallest was in Hawaii - 16%, 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," says Gilman. For instance, in California that sample family would see an increase of around $3,400 dollars a year with Allstate Indemnity, but only $905 a year if they switched to Auto Club Insurance.

And there's another way to save. Gilman explains, "Most insurers in most states do offer a discount to families with students who can show proof of good academic performance." Be sure to check with your insurer to see if your teen qualifies for this discount. The savings can be significant. For Consumer Reports' sample family, the good-student discount averages $474 a year in California. What about having your teen take a driver's education course? Consumer Reports found for its sample family that the average savings were only about $63 per year.