How Much Does Insurance Go Up After an Accident for a Teenager?
Last Updated on May 5, 2022
It is no secret that teenagers pay the most for car insurance. You can try to mitigate some of the cost by adding teenagers to their parents’ policies instead of getting their own coverage, but this isn’t always possible as the child reaches 18 or older and moves out into the world on their own. With the already high cost of car insurance for those under age 20, it is important to understand how accidents can further affect your coverage and rates.
Why Teens Pay More for Auto Insurance
The car insurance game is all based on statistics. Statistics are used to determine who is the most at risk of having an accident. Based on several different studies, statistics prove that drivers age 16 to 20 are the most likely to have an accident. Drivers 16 to 19 years old are four times more likely to have an accident than older more experienced drivers. This is why teens cost more to insure.
Of course, there are some things you could do to save on your teen’s insurance rates. Driving a car that is cheap to insure is one of them. Others include taking a defensive driving course or taking advantage of good student discounts. Unfortunately, there’s only so much you can do. Teen drivers, one way or another, will be expensive to insure.
How an Accident Affects Your Rates
A car accident can have a massive impact on your car insurance rates, even if you are not a teenager. On average, having a major car accident will cause your car insurance to go up by as much as 50 percent. Since teen drivers are already paying an awful lot for coverage, paying 50 percent more can be extremely unreasonable if not nearly impossible.
Below is a list of the average rate increases from common car insurance claims:
|Claim Type||Percent Increased||Amount Increased|
|1 At-fault Bodily Injury Claim||32%||$459|
|1 At-fault Property Damage Claim||31%||$450|
|1 At-fault Property Damage Claim (under $2,000)||26%||$366|
|1 Comprehensive Claim||3%||$39|
|1 Comprehensive Claim (under $2,000)||3%||$39|
|2 At-fault Property Damage Claims||110%||$1,572|
|2 Comprehensive Claims||8%||$121|
How to Get Around Rate Hikes
If your teen has a minor accident, it could pay to cover the damages out of your own pocket rather than filing an insurance claim. If the damages are minor and no one was injured, paying the damages out of your own pocket will be much cheaper than paying so much more for car insurance. Of course, it is also up to the other driver whether or not they wish to pursue an actual claim. Most drivers, however, simply want their cars fixed, and are willing to skip the insurance claim if you are willing to pay for the repairs.
When You Can’t Get Coverage
One of the ways that a major car accident can affect your car insurance coverage is that your car insurance company could claim that your teen is too high of a risk and refuse to continue to cover them. This might happen if your teen has already had traffic violations before their accident, or if the accident results in major damage or a totaled vehicle. When your car insurance company drops you, it becomes even more difficult to get reasonably priced coverage.
There are still options available to you if no car insurance company will give your teen coverage. Most states have an assigned risk pool that provides the minimum state-required coverage to those who cannot get coverage in any other way. You will pay a very high amount for being part of this high-risk pool, so it is a good idea to exhaust all of your options with private car insurance companies before going this route. However, since car insurance is mandated by most states, they must make it available to everyone, even if the rates are outrageously high.
Shopping Around Is Key
If your teen has a car accident, don’t assume that you should stay with your current car insurance company. Instead, shop around for the best rates. It does no harm to get quotes from as many car insurance companies as possible to try to find the lowest rates for your teen. If you are under the age of 20 and you are living on your own, it becomes even more important to shop around for the best rates.
Your first priority should be to use websites that allow you to get multiple rates from multiple companies with just one form. These websites are very helpful as they allow for easy price and policy comparisons. If you don’t have much luck with these websites, check with the major car insurance companies. If you are under age 20, see if you can go back to your parents’ policy. If you live on your own or at college and have your own car, however, you may not be able to be on your parent’s policy.
If you have a difficult time finding reasonable coverage, check with the higher-risk car insurance companies. Companies like Safe Auto or The General are set up to service high-risk drivers that other car insurance companies don’t want to insure. If your teen has an accident and traffic violations under their belt already, they may not be able to get coverage through a more mainstream car insurance company.
Of course, the best way to get good rates on car insurance is to avoid accidents as much as possible. Encourage your teen to go through a defensive driving course to learn how to avoid accidents. You should also talk to your teen about safe driving practices.