Gender SignificanceClick to enlarge picture

Gender plays a significant role in the cost of insurance. A family's rate could double when a teenage girl is added to the policy, but could triple with the addition of a teen boy.

But Hunter's wife fretted that the boy would be better off driving the family's newer, more up-to-date car. "My wife and I had a big argument over it," Hunter, now the director of insurance for the Consumer Federation of America, told MSN Autos.

In the end, however, Hunter won out. "I let my son drive only the older car," he said, adding, "It was worth it." With basic insurance of $700 a year on the newer car vs. $300 a year on the older car, adding the teen as a driver to the older car was much cheaper than the alternative.

Welcome to the stresses of the teen years.

Not only do parents worry about putting a teen behind the wheel of a car—any car—they have to weigh a number of options about teen auto insurance. And, as Hunter attests, there are tradeoffs, particularly about money.

Expect Higher Premiums

For nearly all families, the biggest issue is the money. Almost without fail, a teenage driver will add significant cost to the family auto insurance.

The reason? Insurers base their auto rates on how likely a driver will get into a crash, and statistics show that young, inexperienced drivers account for a disproportionate share of crashes. When fatal crashes alone are examined, drivers between the ages of 16 and 17 are three times more likely to be killed in a traffic crash than people between the ages of 25 and 64, according to the National Safety Council.

Gender continues to play a role in those insurance rates, too, since teenage males are viewed as greater driving risks than are teenage females. Hunter noted a family's auto insurance rate might nearly double when a teenage girl is added to the policy, but it could triple if a teen boy is added.

Jeanne Salvatore, vice president for consumer affairs at the Insurance Information Institute in New York City, had a bit lower price estimate for teen drivers. She said adding a teenage daughter to a parent's family policy can boost the auto insurance premiums by 50 percent. If a teen son is added, the premiums can rise 100 percent.

Both Hunter and Salvatore agreed teen rates haven't changed a lot over the last couple of decades, although Hunter noted that auto insurance rates for teen girls have been rising. He attributed it, in part, to girls doing more driving.

Know the Alternatives

While it's generally believed to be less expensive to add a teen driver to the family insurance policy, parents should check out all alternatives.

In some cases, a teen owning an old clunker and getting her own insurance policy for that car can be more cost effective than if she were driving the family's brand-new luxury car and placed on that car policy. Older, less expensive cars tend to be viewed as lower risk for insurers because they don't usually cost as much to repair and have been depreciated to a great degree. In addition, policyholders can—and often do—save money on these old cars by not carrying as much collision and comprehensive coverages as they would on a new car.

But note the tradeoffs here. While a 1990 Buick LeSabre wagon might have a good amount of sheet metal to crumple in a crash, it won't have current safety features such as frontal and side airbags. It won't have the latest in crash avoidance features such as anti-lock brakes (ABS) or electronic stability control, either.

And note that if a teen takes driver-training classes on more modern vehicles, he may need to learn new skills before settling behind the wheel of an older model car. For example, teens often learn to drive in vehicles that are equipped with ABS. The panic-braking procedures in a new car with ABS are different than what a driver should do during a panic stop in a car without ABS. Make sure your teenager has learned the most effective use of the brakes on the car being driven.

Timing Is Everything

Check with insurers as your teen approaches driving age to be sure you know when your teen will need to begin coverage. Is it when the teen receives a driving permit or after obtaining a full-fledged license?

Insurance company representatives can guide you, but, obviously, the longer your teen is off your insurance policy the longer you have lower insurance premiums.

You also will want to seek guidance if your teen splits time between your household and an ex-spouse's household. In some cases, the teen may wind up being listed only on the policy of the parent who has custody.

Money-Saving Strategies

To lower the auto insurance "hit" of having a teenager, try to qualify for as many discounts as possible. Attempt to have your teen classified as an "occasional" driver, rather than a primary driver, or at least as one who drives for pleasure-use only.

Does your child have good grades? Some insurers offer a good student discount for youngsters with a B average or better.

Make sure your teen has completed a driver's education course, and check beforehand with insurers about the kinds of courses that qualify for an insurer's driver education discount. Also find out if a defensive driving course can help reduce premiums.

When shopping for a vehicle for your teen, avoid the sporty, high-performance vehicles that can get teenagers in trouble and which insurers frown upon. Some consumer groups also advise against letting teens drive sport-utility vehicles. SUVs, while popular, have a higher center of gravity and are more prone to rollovers than are lower-to-the-ground automobiles.

Spend time traveling with your teenager and model good driving skills. Convince your teen of the need to behave responsibly behind the wheel, and discuss the consequences of irresponsible behavior. You may want to impose a curfew to reduce your teen's exposure to dangerous, late-at-night travel hours.

You also might want to limit the kinds and numbers of friends who ride with your child, because a recent study indicated the greater the number of teens riding together, the more likely it is that a crash will occur. If you think insurance costs are high when your teen begins driving, just wait and see how quickly they climb if your teen starts to collect tickets and get into crashes.

If your teenager goes away to college and doesn't take the car along, you may be able to drop the teen from the insurance policy. Insurers will be able to inform you about any geographic restrictions on how far away the teen must now reside in order for the policy deletion to take effect.

And there's always Hunter's last resort: "Don't let them drive, at least not until they're older."

Good luck with that one!

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