Cheaper for Teens To Hitch Ride on Parents' Car Insurance Policy, Study Says | Edmunds

Cheaper for Teens To Hitch Ride on Parents' Car Insurance Policy, Study Says


SAN FRANCISCO — A new study confirms the conventional wisdom that it's much cheaper for teens and young adults to be added to a parent's existing car insurance policy versus signing up for an individual policy.

The new InsuranceQuotes.com report found that 18-year-olds pay an average of 18 percent more if they sign up for an individual policy instead of remaining on their parents' policies.

The study's findings are "quite significant," InsuranceQuotes.com said.

"The penalty for buying individual insurance instead of family coverage is much higher in some states," it noted.

The study found that 18-year-olds in Rhode Island pay an average of 53 percent more for individual coverage, while those in Connecticut and Oregon pay 47 percent more.

Younger drivers traditionally are more expensive to insure due to their limited driving record and credit history. They are statistically riskier drivers as well.

The U.S. Centers for Disease Control and Prevention says motor vehicle crashes are the leading cause of death for U.S. teens.

Young people ages 15-24 represent only 14 percent of the U.S. population. However, they account for 30 percent or $19 billion of the total costs of motor vehicle injuries among males and 28 percent or $7 billion of the total costs of motor vehicle injuries among females, the CDC said.

"In most states, individual policies significantly add to the already high cost of insuring a teen driver," said Laura Adams, InsuranceQuotes.com's senior analyst.

She advises parents who wish to foster financial independence to ask the child to pay for "all or at least some of the increase."

Edmunds says: Before having "the talk" about car insurance with your young driver, you may also want to check out Edmunds' car insurance advice page.

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