Much Cheaper for Young Adults to Stay on Parents’ Car Insurance
Individual Policies Add to Already-Steep Teen Insurance Costs
SAN FRANCISCO – Aug. 12, 2015 – Eighteen-year-olds pay an average of 18 percent more for car insurance if they sign up for an individual policy, as opposed to remaining on their parents’ policies, according to a new insuranceQuotes.com report. The “penalty” for buying individual insurance instead of sticking with family coverage is much higher in some states.
For example, 18-year-olds in Rhode Island pay an average of 53 percent more for individual coverage. Connecticut (47 percent), Oregon (47 percent), Nevada (41 percent) and Maine (40 percent) aren’t far behind.
Hawaii doesn’t allow auto insurance companies to factor age or length of driving experience into their costs. Insurers in Illinois, Alaska and Florida only charge 18-year-olds an average of 7 percent more for individual coverage.
“In most states, individual policies significantly add to the already-high cost of insuring a teen driver,” says Laura Adams, insuranceQuotes.com’s senior analyst. “Parents with an 18-year-old on their policy pay an average of 77 percent more than they would without the teen. While this certainly isn’t cheap, it’s usually much better than the individual policy option. Parents who wish to foster financial independence can still ask their child to pay for all or at least some of the increase.”
Nationally, individual policies cost 9 percent more than family coverage at age 19 and 4 percent more at age 24. Even at age 24, though, there are states where individual coverage costs significantly more than family coverage (for example, 15 percent more in North Carolina and 10 percent more in Maryland).
Click here to view the average premium increases in all 50 states and Washington, D.C.:
insuranceQuotes.com commissioned Quadrant Information Services to calculate rates using data from the largest carriers (representing 60-70 percent of market share) in each state.
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