If you have young drivers in the household, insuring them can be very expensive. Even Liberty Mutual teen car insurance is going to cost you more, and here’s how much.
If you are a family with teens about to start driving, you may already have been hit with the sticker shock that insuring them will bring. There’s just no getting around it. Teen drivers are inexperienced drivers and insurance companies hedge against that inexperience by charging more to insure them. But just how much more?
Reports and studies from organizations as varied as the Insurance Research Council and the national car club AAA suggest that adding a teen driver to your family’s car insurance coverage can double, triple or even quadruple what you pay in car insurance premium.
To illustrate just what a family can wind up paying for adding a teen driver to a family car insurance plan, we’re going to go shopping for teen car insurance with the nation’s seventh largest car insurance provider, Liberty Mutual. Thanks to advancements in Liberty’s online purchasing and review tools, we can get a very clear picture of what the impact adding teen drivers can have in multiple communities. Here’s what we found when we went shopping for Liberty Mutual teen car insurance.
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Our driving family profile
To take advantage of the online resources provided by Liberty Mutual to see what our car insurance plans will cost, we developed a profile of a fairly typical family. Brian and Tina are a married couple. Brian is 46 and works as a senior financial analyst for a financial services and investment firm. Tina is about to turn 41 and she is a real estate broker/agent. Both Brian and Tina completed advanced studies in college that earned them Master’s Degrees. They have both been insured since first getting licensed (age 17 for Brian, age 18 for Tina) and neither of them have been involved in any car accidents or incidents that could have earned them serious citations or points against driving records. They own their home.
Their daughter June recently completed her Graduated Driving License (GDL) requirements and at age 17, has earned full driving privileges. June is a high school student with good grades and as part of her GDL requirements, successfully completed a driver safety and defensive driving course through her high school.
The cars this family hopes to insure include a 2013 Cadillac Escalade ESV (AWD) that Tina uses to commute to work (she is issued a company car for her realtor duties) and that is used by the family for errands and weekend excursions. They purchased the car new and own it free and clear. This car comes with a number of standard safety and anti-theft features, including enrollment in the OnStar driver assistance program. On average, they put close to 30,000 miles on the car each year.
The other car they hope to insure is a 2013 Audi A6 3.0 Quattro Premium, the car Brian commutes to work in. They purchased the car slightly used in 2014 and own it outright. On average, the family puts about 18,000 miles on the Audi each year.
June learned to drive using both cars, but she will primarily be driving the Cadillac.
Markets for insurance coverage
There are a number of factors that go into calculating what any given family will pay for car insurance and, correspondingly, what they will pay to add teen drivers to that insurance. As unfair as it may seem, where you live and drive will have a big impact on what you will be paying for car insurance. To illustrate this, we’re taking our hypothetical driving family shopping in three communities that, routinely, differ significantly in what the average cost for car insurance is.
Each year, numerous organizations and agencies report on what the average cost for car insurance is (by state) and rank states accordingly. Using compilations of these reports, we’re taking this family Liberty Mutual car insurance shopping in communities ranked expensive, moderate and inexpensive (respectively) for car insurance costs. In this way, we can further detail factors you may want to consider when adding a teen driver to your family car insurance plan.
(Note: the rates and coverage levels reported in these pricing scenarios are the result of online quotes obtained through Liberty Mutual in August of 2014.)
Princeton, New Jersey
New Jersey is a state that routinely ranks near the top of annual lists when calculating car insurance costs, despite having some rather detailed car insurance requirements. One reason may be proximity to New York and the numerous urban settings drivers find themselves in. Whatever the reasons for higher car insurance premium rates, licensed drivers in New Jersey are faced with the following minimum car insurance requirements:
- $15,000 in bodily injury liability coverage for a single person per accident
- $30,000 in total bodily injury liability coverage per accident
- $5,000 in total property damage liability coverage per accident
- $15,000 in uninsured/underinsured motorist bodily injury coverage for a single person per accident
- $30,000 in total uninsured/underinsured motorist bodily injury coverage per accident
- $5,000 in total uninsured/underinsured motorist property damage coverage per accident (with a $500 deductible)
- $15,000 in personal injury protection (PIP) coverage
Our hypothetical couple, Brian and Tina, routinely put in place car insurance coverage plans that exceed the state minimum requirements. One reason is that the cars they drive are a little on the higher end scale and the minimum requirements of the states where they live and drive would fall short in covering any serious damage. They also are a responsible couple and know that insurers actually reward drivers for putting higher levels of certain coverage options (such as liability) in place. This is true with a company like Liberty Mutual. Liberty actually offers a lower base rate for drivers choosing to add higher coverage levels.
With that in mind, here’s the package of coverage options we put in place for Brian and Tina for their New Jersey Liberty Mutual car insurance:
- Liability coverage at 100/300/100 levels
- Uninsured/underinsured motorist coverage at 100/300/100 levels
- $15,000 in PIP/medical payments coverage (with a $250 deductible)
- Collision coverage (on both cars) with a $500 deductible
- Comprehensive coverage (on both cars) with a $500 deductible
- Roadside assistance coverage, in place
- Rental reimbursement coverage, in place
Like most leading car insurance companies, Liberty Mutual has a wide array of car insurance premium discounts they can offer eligible drivers. These discounts can vary from state to state and they can have a noticeable impact on what drivers will pay. In New Jersey, Liberty is able to offer these discounts to Brian and Jill for this coverage plan:
- Multi-car discount
- OnStar discount
- Safety and anti-theft devices discount (beyond the OnStar discount)
- Early shopper discount (for switching carriers before the expiration of a previous or existing policy)
- Paperless and online transaction discount
These discounts help Brian and Tina get the full range of coverage options from Liberty Mutual on a 12-month policy for a monthly premium of $310-$320.
Adding June to this plan opens a couple of additional discounts for this family in New Jersey. If the family agrees to participate in Liberty Mutual’s TeenSmart program (which includes a safe driving pledge and action plan), they will enjoy discounts as well as access to programs and products to assist with helping June establish safe driving habits. They also get a discount for the fact that June completed safe driver training and for the fact that she’s a new teen driver. Those discounts will be welcome relief to the family because even with them, the new premium for the New Jersey Liberty Mutual plan on a 12-monthl policy is going to run them $435-$445 each month.
Bellevue, Washington
The Evergreen State falls very near the national median when it comes to car insurance premium rates. Relatively few urban centers may be one reason. Another could be that the state has insurance requirements in place that are a little more detailed than other states. Licensed drivers in the state of Washington are required to have (at minimum) the following coverage options and levels in place:
- $25,000 in bodily injury liability coverage for a single person per accident
- $50,000 in total bodily injury liability coverage per accident
- $10,00 in total property damage liability coverage per accident
Just as we did for Brian and Tina in New Jersey, we’re putting a car insurance coverage plan in place that will easily exceed these state limits in Washington. For our Liberty Mutual Washington state car insurance plan, we quoted Brian and Tina the following coverage package:
- Liability coverage at 100/300/100 levels
- Uninsured/underinsured motorist coverage at 100/300/100 levels
- $2,000 in medical payments coverage
- Collision coverage (on both cars) with a $500 deductible
- Comprehensive coverage (on both cars) with a $500 deductible
- Roadside assistance coverage, in place
- Rental reimbursement coverage, in place
Brian and Tina are subject to receiving the same premium discounts from Liberty Mutual in Washington as they were in New Jersey, which helps. With all of those discounts in place, Brian and Tina (for a 12-month policy) will be facing a monthly premium of $265-$275.
Adding June to this policy in Washington gets Brian and Tina the same discounts they enjoyed in New Jersey, plus an additional discount for the fact that June is a good student. It still doesn’t help all that much as the new premium for the 12-month plan (with June) is a monthly bill of $440-$450.
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Madison, Wisconsin
In recent years, Wisconsin did something unheard of in most states. It actually reduced the levels of liability coverage required of licensed drivers (it also dropped the mandatory uninsured/underinsured motorist coverage requirement.) Despite this, the state still enjoys some of the lowest car insurance premium rates in the country (as you’ll see from this pricing scenario.) Today, licensed drivers in the Badger State are required to have these coverage options and levels in place:
- $25,000 in bodily injury liability coverage for a single person per accident
- $50,000 in total bodily injury liability coverage per accident
- $10,000 in total property damage liability coverage per accident
(While uninsured/underinsured motorist coverage is now optional, if drivers elect to get it, they must have coverage levels that match the liability coverage levels they have in place.)
Continuing our trend in getting Brian and Tina more coverage than the minimum (and to keep the comparison more accurate and consistent), here’s the coverage plan we put in place for their Wisconsin Liberty Mutual car insurance:
- Liability coverage at 100/300/100 levels
- Uninsured/underinsured motorist coverage at 100/300/100 levels
- $1,000 in medical payments coverage
- Collision coverage (on both cars) with a $500 deductible
- Comprehensive coverage (on both cars) with a $500 deductible
- Roadside assistance coverage, in place
- Rental reimbursement coverage, in place
Brian and Tina are fortunate in that all the premium discounts available to them in the other two states are also available from Liberty Mutual in Wisconsin. With those discounts in hand, they can get this expanded coverage plan for their Wisconsin Liberty Mutual car insurance (with a 12-month policy) for a very reasonable monthly premium of $140-$150.
Adding June to the mix, Brian and Tina get all the same discounts they enjoyed in New Jersey (the good student discount is not available through Liberty in Wisconsin) and they can add June to this family plan on the same 12-month policy for a monthly premium of $230-$240.
What you and your family wind up paying for any car insurance coverage is going to be different. What these pricing scenarios show is that how you package a plan and where you buy it can and does have an impact.
While there may be little you can do to change the fact of where you live and how that will impact what you are going to pay far car insurance, knowing those differences can help you prepare. Preparation and understanding are particularly key when you are looking ahead to adding a young, teen driver to your family’s car insurance coverage. It’s an area where some expert support and advice may come in handy. Spending some time with a local car insurance expert can help you and your teen driver understand the importance of establishing early and sustainable safe driving practices. A visit with an agent may also open up the possibility of additional discounts or more cost-effective coverage packages. Let Reply! serve as a guide for you as we can connect you to local car insurance agents eager to help you and your family get the best possible coverage plan in place.