As anyone who owns a vehicle knows by now, auto insurance rates have been skyrocketing in the post-pandemic era. Premiums are reportedly up by 26% this year according to Bankrate.com. Multiple causes are to blame, including the fact that modern vehicles have become increasingly expensive to repair and especially to replace if totaled in a wreck.
According to a study conducted by Marketwatch.com, those having freshly-licensed drivers at home are facing some of the biggest budget-busting car insurance premiums among all demographics.
On the plus side, once a teenager finally obtains his or her driver’s license, mom and dad become refreshingly unshackled from the unrelenting cycle of parental pick-ups and drop offs and pick-ups. But this freedom apparently comes at a stiff price.
Got one or more kids with learners’ permits in hand champing at the bit to finish their pre-license requirements in anticipation of a trip to the DMV? Are you sitting down? Marketwatch data shows that, on average, 16-year-olds pay up to 485% more for car insurance than older drivers. And as is the case with virtually everything to do with insurance, the cost can vary wildly from one state to another.
The study found that 16-year-old drivers living in Delaware pay the highest car insurance rates in the nation, at an annual average $13,788. At the other end of the ledger, teen drivers living in Hawaii are charged the least at an average $1,805 per year. Younger drivers tend to get into more frequent wrecks than older motorists, with distracted driving and alcohol use being among the main reasons. Reportedly, a third of all 20-year-olds killed in crashes were found being under the influence of alcohol. We’re counting down the states where young drivers pay the most below.
Of course, there are variables in the actuarial process. For starters, gender matters, with male teens generally paying more for insurance than young female drivers. Also, city kids tend to get charged more than those living in suburban and rural areas. Regardless of lender or location, young drivers will see their rates jump even further should they amass one or more moving violations and/or at-fault accidents on their driving records.
Fortunately, car insurance rates tend to drop dramatically once a driver turns 25. For example, Marketwatch found that the sky-high rates being charged to teen motorists in Delaware become considerably more affordable once they reach 25 years old, dropping to an annual $2,852. Assuming no accumulated tickets or accidents, or other life changes, rates should remain steady from age 25 to 55.
Here’s a breakdown of the 10 costliest states in the union to insure teenage drivers, based on their average premiums, and how much the same motorists can expect to pay once they reach 25 years of age:
- Delaware: $13,788 / $2,852
- Rhode Island: $13,472 / $2,381
- Louisiana: $13,261 / $3,008
- Nevada: $11,788 / $2,768
- Connecticut: $11,410 / $1,951
- Utah: $8,534 / $1,913
- Wisconsin: $8,434 / $1,686
- Oregon: $8,403 / $1,903
- Tennessee: $6,897 / $1,521
- Idaho: $6,433 / $1,412
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