Study: Arizona ranks among highest states for teen car insurance rates

Aug 11, 2015, 6:00 AM | Updated: 6:58 am
(Archive Photo)...
(Archive Photo)
(Archive Photo)

PHOENIX — Any parent with teenage drivers knows how expensive car insurance rates can be, even if their child has not gotten into an accident. For parents of 18-year-olds in Arizona, those rates are even higher, according to a study from InsuranceQuotes.com.

Eighteen-year-olds who do not piggyback onto their parent’s car insurance policy in Arizona pay about 23 percent more than those who do, compared to a nationwide average of 18 percent. Teenagers who stay on their parents’ insurance add about 95 percent of the cost to that policy, according to the study.

Laura Adams, Senior Insurance Analyst for InsuranceQuotes.com, said Arizona residents are particularly vulnerable to price increases for younger drivers because of the risk they pose.

“Insurance is regulated differently in each state, but typically what insurance companies are looking at is what are the claims going on with this profile of driver,” she said. “So if statistically they are getting into more accidents or even more expensive accidents in your area, they’re going to be charged more.”

Adams suggested that teenage drivers stay on their parent’s policy if they can, although it does drive the cost up exponentially for them.

“For young drivers, certainly staying on mom or dad’s plan is a great option,” she said. “If mom and dad don’t like that, maybe you can reimburse mom and dad the extra cost to have you on their plan instead of going and getting your own policy.

Fortunately, Adams said, those insurance rates do decrease as the child gets older and begins to grow out of their teenage years. Arizona ranked No. 49 in the nation, including the District of Columbia, for individual rate increases between the ages of 18 and 24, with just a 2 percent increase.

“As the teen gets older, these rates come down dramatically, so as you’re 19. 20, even up to 24-years-old, the rate to have your own policy does get much more affordable, but 18-year-olds, particularly in Arizona, are really paying some high rates.”

For teenagers who are seeking more independence, but do not want the financial burden that comes with being on their own policy, Adams said many insurance companies offer discounted rates for students with good grades.

“A good student discount will qualify those who are getting about a B-average or better for a 20-25 percent discount in most cases,” she said. Adams also suggested shopping around for different rates and getting multiple quotes from different companies.

Being a teen driver is expensive no matter who is paying for it, Adams said, but it’s important for both parties to know the responsibilities they are taking on.

“Adding a teen driver is always expensive no matter where you live, so this is something that mom and dad are going to have to consider the consequences of,” she said. “If a teenage driver goes and gets their own policy, they just need to understand they will be paying a premium.”

KTAR’s Jeremy Foster contributed to this report. 

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Study: Arizona ranks among highest states for teen car insurance rates