For a 16-year old to drive legally in North Carolina, he/she must carry car insurance. Ideally, teens are the most expensive to insure. Their lack of experience and proneness to accidents makes them high-risk drivers. Car accidents are the major cause of death for teens aged 15 to 20 years, according to the National Highway Traffic Safety Administration.

Having car insurance means you not only meet the State’s legal requirements to drive, but also help protect yourself financially if you cause an accident.

 

What car insurance entails

 

Car insurance for new drivers will include a range of liabilities which ultimately determine the cost of the coverage. The legal minimum coverage in North Carolina contains Bodily Injury liability (BI), Property Damage Liability (PD) and uninsured/underinsured motorist coverage.

• Bodily Injury compensates the bills of individuals that sustain injuries caused by your car accident. The policy terms will usually vary depending on the insurer, but typically will pay for:
• Medical expenses
• Funeral expenses
• Pain and suffering
• Loss of income
• Legal defense in case a lawsuit results from the car accident

 

• Property Damage pays for damages caused to another individual’s property (car, house, fence, guardrail, tree, pole, etc.) that you are found liable for after an auto accident. PD liability also gives you a legal defense if another individual files a lawsuit against you concerning damage to property resulting from a car accident.

 

• Uninsured / Underinsured motorist is an amount equivalent to the minimum liability limits to compensate for damages caused by an uninsured driver or whose insurance is insufficient to pay for damages. This covers you and other passengers in your car, and offers some help against hit and run drivers.

 

Keep in mind that Bodily Injury and Property Damage Liability do not cover your personal injuries and property damages. In this case, optional insurance covers provide room to increase liability limits, higher than the legal minimum.

 

 

Cost of insuring a 16-year old teenager

 

The minimum car insurance requirements in North Carolina is 30/60/25. This means that the insurance will pay up to $30,000 to anyone injured by the covered driver, up to $60,000 for everyone involved in a single accident and a maximum of $25,000 for property damage.

When purchasing auto insurance for a newly licensed driver, there are two options:

 

• Adding a teen to their parent’s policy

This approach is usually the easy and more economical way. What you pay will depend on a number of factors such as whether or not the teen is sharing the parent’s car, how they will use the car, whether the car includes an alarm and/or multiple airbags and more. These factors are weighed differently based on the particular insurer underwriting methodology and the auto insurance regulations in North Carolina.

Insurance rates obviously vary from one auto insurer to another. On average, a 16-year old teen in possession with the State’s Limited Provisional License will cost $1,953 in annual premiums. The amount may be higher or lower depending on a teen’s background and the car he/she drives.

 

• Obtaining an insurance policy for a teen

This is possible when the title of the car belongs to the teen. The best thing to do is purchasing an older car, which is obviously cheaper to insure, and buying a separate policy that will reduce liability exposure for the parent. In the event of an accident or any moving violation, the policyholder (teen) will be responsible for injuries or property damages.

The cost here will also depend on several variables, including whether the policyholder is male or female and type of car that they own.

Male teens have been reported to cause more accidents than female drivers, so insurance companies consider them high risk. More accidents translate to more claims and in turn more payouts. Therefore, a 16-year old boy will likely pay more premiums compared to his counterpart. In North Carolina, the annual figure is approximately $2,948 for both male and female.

Insurance costs for a Honda or Toyota are typically lower than high-performance cars such as Infiniti G35, Camaro or Mustang.

Parents may also benefit from car insurance discounts that consider factors such as driver education, discipline and parent-teen driving contract. Nonetheless, every parent should insist that their children stay safe on the road by abiding to all traffic rules.

 

If you want to learn more, please contact our team at ProtectiveAgency.com or call (877) 739-9367. Our licensed insurance agents will be happy to answer any questions you have.