Poll: Auto insurance concerns prompt delay in driver’s licenses for teens

Of all the parental concerns associated with the costs of teen driving, auto insurance tops the list, according to a survey commissioned by Nationwide Insurance. The expenses of teen driving are so worrisome, in fact, that one in seven parents say they’ll put off allowing their child to get a driver’s license.

In an online poll of 1,483 U.S. parents of driving-age teens (15- to 19-year-olds) conducted by Harris Interactive, 66 percent cited auto insurance as their No. 1 financial worry related to teen drivers. On average, parents of teens pay nearly two-thirds or more of all expenses associated with their child driving, including auto insurance.

Adding a teen driver to a parent’s auto insurance policy can raise premiums by 50 percent to 100 percent.

Seventy percent of parents of teen drivers insure their children on their auto insurance policies, causing an average premium increase of about $800 a year, according to Nationwide.

According to the Insurance Information Institute, adding a teenager to an auto insurance policy can trigger a premium increase of 50 percent to 100 percent. Parents can offset that extra cost if their teens earn good grades, as some insurers offer “good student” discounts.

An analysis of Nationwide’s 4 million auto insurance policies showed the number of teen drivers among policyholders had decreased from 5.8 percent in 2008 to 5.4 percent in 2011. The cost of auto insurance was cited as a reason for the decline.

According to the Insurance Information Institute, adding a teenager to an auto insurance policy can trigger a premium increase of 50 percent to 100 percent. Parents can offset that extra cost if their teens earn good grades, as some insurers offer “good student” discounts.

“Our survey found that households with teen drivers shell out an average of nearly $3,100 each year to allow their teens to drive,” says Larry Thursby, a vice president at Nationwide.

The poll found that half of the parents of driving-age teens have made financial cutbacks to let a child to drive, including a reduction in expenses for entertainment (40 percent), dining out (38 percent) and vacations (35 percent).

The poll also showed that amid the economic downtown, one-third of teen drivers have been forced to get a job to pay for driving expenses. About two of every 10 parents say their child will have to use a family car instead of getting his or her own (21 percent), or they are not buying a car for their teen as originally planned (15 percent).

The survey was conducted Dec. 10, 2010, to Jan. 5, 2011.