If you have a new teen driver or are preparing to help your teen get his or her license in the future, you might need some brushing up on your knowledge of teen car insurance.
A lot may have changed since you were getting behind the wheel of a car for the first time, but one thing has not – car insurance for licensed teenagers is both necessary and legally required. Continue reading to learn more about your coverage options and what to expect when you add a teen to your policy.
What Are My Coverage Options?
Teen drivers have access to the same insurance coverage options that adult drivers do. With regards to liability coverage, having the same liability limits as your other vehicles is required by most all insurance companies. In Wisconsin, all drivers, regardless of age need a minimum of:
- $25,000 individual bodily injury liability per accident
- $50,000 bodily injury liability when more than one person is injured
- $10,000 property damage liability
These state minimum limits are not recommended for most families since many parents of teen drivers have savings and other assets that could be at-risk if the liability limits on an insurance policy are set too low. Ultimately, it is possible that a victim injured in an accident could sue the parents of the teenager who caused the accident for any damages not covered by insurance.
Why Are the Rates so High?
With the exception of Hawaii, where insurers cannot assess driver risk based on age, teen drivers in all other U.S. states tend to pay more for insurance than the drivers in their mid-20s or older. There are several reasons for this, but the primary cause is inexperience. Driving is a skill that takes years of practice to master. This puts younger drivers at a significant disadvantage. In fact, car accidents are the number one cause of death in teenagers over age 15. Thousands die in collisions every year, many of which were due to critical errors caused by inexperience.
Fortunately, parents of teen drivers in Wisconsin are in luck – they enjoy some of the lowest rates in the nation when adding a teen to a policy. An industry report released last summer revealed that teenagers only increase the price on the family policy by an average of 69 percent in the Badger State. If that sounds high, consider this: The average family’s insurance premiums more than double when adding a teen driver in Wyoming, Rhode Island, Illinois and Maine.
How Does Car Insurance for Teens Change over Time?
For many teens, rates begin subtly dropping as the birthdays pass without any major incidents. Between ages 21 and 25, most people see a significant drop in premiums, which typically continues improving decade by decade. In the meantime, young people can begin qualifying for discounts on their coverage simply by showing responsible behavior.
Good grades in high school and college can lower rates by as much as 15 percent or more with some insurers. After a few years without any violations or accidents, college students can begin earning their first safe-driving discounts, as well.
For more information about car insurance for teens, contact an independent agent who can answer your questions and assist you in selecting coverage that fits your needs.
