Car insurance companies calculate your premium by assessing the likelihood that you’ll file a claim. Statistically, teenagers are higher-risk drivers, so when you add your teen to your car insurance policy, you can expect your premiums to increase. And if that young driver gets a traffic ticket or is involved in a collision, those premiums could easily rise even higher.

Naturally, the first order of business after a driving incident is to ensure your teen is safe. Then comes the reckoning with the possible financial implications. Read on to learn about the rate increases you can expect after your teen gets a traffic ticket or is in an accident, and what you can do to reduce the financial impact.

How does a teen traffic ticket affect your car insurance?

Traffic tickets can matter to what you pay for car insurance. That said, your teen’s first ticket won’t necessarily hike your premium.

When a driver is ticketed, that fact shows up on the driver’s motor vehicle report (MVR). MVRs specifically detail any moving violations, like running a red light or speeding. On the other hand, non-moving violations, like parking tickets and tickets for broken tail lights, don’t show up on MVRs and don’t affect premiums.

How much your premium could go up if your teen receives a single speeding ticket, say, depends on a number of factors, including the state in which you live. By some estimates, however, you could see a jump in your rate of 20% to 25%.

Rack up successive speeding tickets or more severe violations on your MVR and the impact will likely rise. Driving under the influence (DUI, referred to in some states as driving while intoxicated or DWI), among the most serious violations, will cause greater legal penalties and higher insurance rates.

You can find online calculators that will estimate your new elevated premium after a traffic violation based on your state, type of violation and your current annual premium. Take these estimates with a grain of salt, though, as they exclude a great deal of information, such as previous claims history, the type of policy you have, and your specific provider.

How does a teen car accident affect your car insurance?

The effect a car collision has on your insurance will vary greatly depending on a number of factors. These include where you live, your insurance provider and the details of the crash.

On the whole, though, even a single accident involving your teen can often raise your premiums by as much as 40%, according to some estimates, and that’s not including the loss of “good driver” or “claim-free” discounts. You could find yourself paying closer to 60% more for your car insurance if your teen is found to have caused an accident, other industry data suggest.

But your teen being deemed innocent of causing an accident isn’t everything. It might come as a surprise to learn that your insurance rates might go up even if your teen is involved in an accident that isn’t their fault.

In part, understanding why such a hike can happen involves grasping the difference between states that apply at-fault rather than no-fault standards when it comes to the responsibility for car accidents.

Impact in an at-fault state

Most states are categorized as “at-fault” jurisdictions, though about one in four states are classified as “no-fault.” That distinction can affect the impact of an accident on your insurance.

In a car collision between two drivers in an at-fault state, one driver is deemed to be at fault, which means they caused the accident. If your teen causes a crash in an at-fault state, they – and likely you, as their parent and policyholder – will be responsible for the other driver’s injuries and damages as well as your own.

At-fault accidents can greatly increase your premiums, but you may still see a premium increase after your teen was in an accident that wasn’t their fault. According to a study from the Consumer Federation of America, drivers who were in accidents they didn’t cause faced an average premium hike – of $138.90. Some states including Florida, California and Oklahoma and California – ban rate hikes for drivers found not-at-fault, or less than 50% at fault, who submit claims.

Premium hikes for not-at-fault accidents also vary by insurer, the study found.

Impact in a no-fault state

In a car collision between two drivers in a no-fault state, each driver is responsible for their own damages and injuries, regardless of who caused the accident. In a no-fault state, you’ll be responsible for costs related to repairs of your own car and your teen’s medical bills, even if your teen didn’t cause the collision. In most instances, this will result in a claim filed with your insurer, which will result in higher premiums.

There are 12 no-fault states:

• Florida
• Hawaii
• Kansas
• Kentucky*
• Massachusetts
• Michigan
• Minnesota
• New Jersey*
• New York
• North Dakota
• Pennsylvania*
• Utah
  

*Kentucky, New Jersey and Pennsylvania are choice no-fault states, in which drivers can opt into a no-fault system.

How long the impact lasts

Fortunately, a car accident or traffic ticket on your driving record is similar to a missed payment on a credit report in that the negative impact dissipates over time.

Insurance companies generally look at the last three to five years of your driving history for most instances. More serious violations, like DUIs, have longer-lasting impact.

The amount of time your ticket will impact your premium also varies based on where you live, as states can regulate how far back a car insurance company can look into your driving history, known as a look-back period. For example, New Jersey limits the look-back period for most offenses to three years, though DUIs can affect your premiums for up to 10 years.

Lastly, once your teenager moves out of your home and purchases their own vehicle, they’ll purchase their own insurance. At that point, their driving history will no longer affect your insurance premium.

What to do about an accident claim

If you’re faced with submitting a claim under your insurance for an accident that involves your teen, you’ll want information to help determine what’s at stake. These steps will help you understand the impact, if any, of making a claim and decide if you indeed should do so, rather than choosing to pay the damages out of pocket.

Verify your coverage and any forgiveness it offers

Begin by reviewing your current insurance policy and its policies toward teen drivers. See how far back they look into driving history, how their accident forgiveness policies work and how much they generally increase rates after a collision or traffic violation.
If you’re unsure the extent of your coverage, you may want to check those details as well. While most policyholders carry comprehensive and collision coverage as part of their policy, such protection isn’t required by law. If you have just liability-only car insurance, your policy won’t cover damages to your vehicle.

If you’re concerned about rate hikes after filing a claim, it’s worth reviewing your policy to see if you qualify for accident forgiveness. Accident forgiveness means that your insurance company won’t increase your rates after you submit a qualifying claim, usually under a certain amount.

Accident forgiveness is often purchased as an add-on to your car insurance policy, but it can also be earned after several years of claims-free driving, depending on your insurance policy. Even if you know you have accident forgiveness included in your policy, you may want to review the fine print, as some accident forgiveness policies exclude teen drivers.

Some of this information should be readily available within the policy itself, or on the insurers’ website. But it can be helpful to contact the insurer for specifics about your coverage and the impact on your rates of making a claim.

Consider not filing a claim, if that's an option

Depending on where you live, and the details of the accident, filing a claim on your insurance may not be a requirement.

In situations where you can choose whether or not to file a claim after your teen is involved in an accident, there’s a simple rule of thumb: You should not file a claim if the cost of repairs is less than your deductible, as you’ll end up paying for all the repairs out of pocket anyway and you risk your premium increasing.

What to do about a traffic violation

In the days following a traffic violation, you can consider contesting your teen’s ticket in traffic court. Though it can be a time-consuming process, you may be able to have the ticket overturned or reduced in court, which could help you avoid rate hikes and other consequences like fines.

Although some courts and judges may be more lenient on younger drivers and impose consequences intended to educate rather than punish, you shouldn’t assume this outcome. It’s worth noting that some states and counties require drivers under a certain age to appear in traffic court if they receive a ticket rather than pleading guilty and paying the fine by mail.

Other steps to consider

Here’s what else can help remedy the damage done by your teen getting a ticket or having an accident.

Changing your insurance

After an accident or ticket raises your insurance premium, it’s a good idea to shop around for a new insurance company. While you don’t necessarily have to switch providers, you may be able to find a lower rate with another carrier.

Alternatively, you might adjust the terms of the policy with your current provider. That could include choosing a higher deductible in exchange for a lower premium. There might also be the option to switch to what’s known as usage-based car insurance.

Widely known as telematics programs, these policies require the use of devices – often the driver’s smartphone – to monitor and record driving behavior, and to reward safe driving with lower insurance premiums. A teen traffic ticket or accident claim may affect the initial premium under a telematics program, but it shouldn’t affect eligibility to give this policy type a try. These programs can offer an immediate discount for signing up, but the long-run impact on premiums will depend on how safely your teen drives.

Training your teen in defensive driving

You can also enroll your teenager in a defensive driving course, which allows a driver to reduce the total number of points on their license. For example, New York drivers can take a six-hour Points & Insurance Reduction Program and remove four points from their driver’s license, provided that their license hasn’t been revoked. In New York, this course can yield up to a 10% discount on insurance premiums for three years (provided that the teen is the primary operator of the car).

Installing an in-car dashcam

Additionally, drivers of any age can benefit from installing a dashboard-mounted camera. Footage recorded by these devices can save you money in several ways, including absolving you of fault in a collision, which can make a big difference in your insurance rates and claims process. A dash cam can also encourage your teen to drive more safely if they know that their driving is being recorded.

Finally, a move to avoid. When your teenager does something that will increase your car insurance premium, it may be tempting to remove them from your policy. That’s not a good solution, though.

For one, you may not be able to drop your child if they still live in your home. And even if your provider allows you to exclude your teenager from your policy, this would create a coverage gap in their insurance history, which may make it more difficult and costly for them to get insurance in the future.