If you have a teenager living with you, it’s natural to be curious about how much you’ll have to pay for car insurance.
Insurance rates for young drivers are typically higher than those for other age groups due to their inexperience on the road and higher risk of accidents.
To help you understand how much car insurance for teens costs and how to find affordable insurance for young drivers, we’ve compiled all the information you need.
Why Is Car Insurance for Teens So Expensive?
Teenage drivers are at a high risk of auto accidents and traffic violations due to their limited driving experience. Statistically, new drivers with limited experience are more prone to causing accidents at a higher rate than older drivers.
The Centers for Disease Control and Prevention (CDC) has reported that motor vehicle crashes are a leading cause of death for children and teenagers.
Additionally, according to the Insurance Institute for Highway Safety (IIHS), teen drivers are involved in four times as many auto accidents as drivers over the age of 20.
While age is just one consideration, insurance companies take into account several factors when setting rates for drivers, including age and other factors that may affect their risk level.
- Marital status.
- Gender.
- Education.
- Credit score.
- Type of vehicle.
- ZIP code.
Young adults who are teenagers and don’t have a college degree, and also haven’t built a credit history, are more likely to be single. Due to these factors, they end up paying higher auto insurance rates.
Additionally, the gender of the teen driver can also play a role in determining the amount they have to pay for their insurance.
Statistics show that male teenage drivers have to pay more than their female counterparts. Although the difference in rates by gender is not significant for adults, teenage boys have to pay a much higher insurance rate than teenage girls.
Average Cost of Car Insurance for Teens
According to Forbes Advisor, the average cost of car insurance for two parents and a 16-year-old driver is $5,367 per annum or $447 per month. This average rate is for teen drivers with full coverage and may vary for those who opt for minimum coverage.
Teen drivers pay significantly higher rates for car insurance than any other age group, including seniors. The average cost of car insurance for a teen driver is also higher when they purchase their own policy, which is around $8,108 for a 16-year-old female and $9,422 for a 16-year-old male, according to Forbes Advisor. Many factors go into calculating the average cost of car insurance for teen drivers, besides their age.
In most cases, it’s better to add a teen driver to their parent’s policy. Since individuals below 18 cannot legally own any property in most states, an adult will need to co-sign the purchase of a car. Therefore, putting your teen on your insurance policy is more straightforward and affordable than getting their own policy.
However, it’s important to note that adding a 16- or 17-year-old driver to your current policy may increase your car insurance premium. The rate difference may be minimal if you have a long history with your insurance company or qualify for available discounts.
Lastly, teen drivers who want to purchase an auto insurance policy must own a car in their name. Additionally, most states require an insurance policy before driving a new car.
Best Car Insurance Providers for Teen Drivers
The cost of a policy for a teen driver is primarily determined by the chosen insurance company. Each car insurance company has a different way of assessing contributing factors, which means that the average cost of a policy can vary significantly.
Although insuring a teen driver is generally more expensive, the differences between insurers can have an impact on the overall cost.
According to Forbes Advisor, here are some of the top car insurance companies to consider when adding a 16-year-old teen driver to a policy with two parents:
- Travelers: Average annual cost of $5,065.
- USAA: Average annual cost of $4,103.
- Geico: Average annual cost of $4,471.
- State Farm: Average annual cost of $5,034.
- Progressive: Average annual cost of $5,088.
- Erie: Average annual cost of $4,059.
- Nationwide: Average annual cost of $4,502.
It’s worth noting that the actual rate you’ll receive for car insurance will vary depending on several factors such as your age, driving history, level of insurance coverage, and eligibility for any discounts.
It’s a good idea to compare rates from a few different insurance companies to find the best deal for your teenage driver.
How to Save on Car Insurance for Teens
The cost of car insurance for teens is usually high, so it’s important to try and reduce the costs as much as possible. Fortunately, there are several ways for teens to get discounts on their insurance policies. Below are some tips that can help to lower your teen’s auto insurance rates:
It’s important to keep car insurance costs low, especially when you have a teenage driver in your household. Here are some tips to help you save money on car insurance:
1. Maintain good grades: Many insurance companies offer good student discounts, which can be as much as 7%, for students who maintain a B average. Some car insurance companies also extend good grade discounts to college students.
2. Complete a defensive driving course: Taking a defensive driving course can lead to a discount of up to 10% on car insurance costs. Defensive driving can significantly reduce the risk of an accident. Additional driver’s education distinct from a defensive driving course could also earn a discount.
3. Ask for an Away Student Discount: College students who attend school away from home may qualify for a discount of between 5% and 10%.
4. Drive a cheap and safe car: The more expensive a vehicle is, the more costly it will be to replace and insure. Cars with high safety ratings and numerous driver assistance safety features will be more affordable to insure since these features can help reduce the occurrence of an accident. These vehicles are among the best for teens.
5. Be a good driver: Teen drivers don’t have any driving history, but keeping a clean record can lead to future discounts. Most car insurance companies offer a safe driver discount to someone free of accidents or traffic tickets.
6. Compare quotes: Comparing quotes is one of the most essential strategies for decreasing auto insurance costs. Get quotes from various insurers before signing off on any policy, ensuring you get a great deal. You can request insurance quotes online or work with an insurance agent to find more available insurance products.
7. Review quotes each year: As your teenagers earn more driving experience, the auto insurance policy rates they receive should decrease. Continue comparing and reviewing quotes with each renewal year. The cheapest provider for your 16-year-old may no longer be the cheapest option for your 17-year-old driver.
It’s possible to find an affordable insurance policy for a teen driver by considering certain policies and factors. However, even with every discount applied, car insurance for a teen will still cost significantly more than it does for an adult driver.
It’s only after the driver turns 25 years old and maintains a good driving record that serious deductions will occur. Insurance rates will increase again around age 65, but not as much as they do for drivers aged 16 to 19. It’s important to compare quotes and shop around before making any final decision on a teen car insurance policy.
Teaching your teen driver the rules of the road can also help keep them safe and prevent increased insurance rates. The National Highway Traffic Safety Administration (NHTSA) recommends educating teenagers about the risks of drinking and driving, distracted driving, and proper seat belt use.
How to Choose the Best Insurance for Teen Drivers
When it comes to purchasing auto insurance coverage for your teenager, you may have many options to choose from. However, it is important to keep in mind that the cheapest car insurance policy might not always be the best option. Your top priority should be ensuring your teenager’s safety on the road.
To keep your family’s auto insurance policy rates affordable, it may be helpful to choose an insurance provider that offers discounts. Some insurance providers offer programs such as accident forgiveness, which can be beneficial if your teenager gets into an accident during his or her first few years of driving. Additionally, maintaining a clean driving record can also help to control insurance costs for your entire family.
How Much Insurance Does a Teenager Need?
The insurance premiums that are the most affordable for teenagers are usually the minimum coverage policies that meet the state requirements. However, it may be necessary for you to consider additional policies to safeguard your young adult drivers, particularly if they are involved in a costly car accident. You can choose from different insurance types to provide adequate protection.
Liability coverage is a mandatory insurance policy required in most states. It includes bodily injury and property damage coverage, which helps pay for costs associated with an at-fault accident.
Full coverage insurance policy includes comprehensive and collision coverage and typically offers the highest level of coverage available, but it also means that it carries the highest premiums. However, it may not be necessary if your teenager is driving an older vehicle and doesn’t have an auto loan.
Uninsured and underinsured motorist coverage protects your teenager if they get into an accident with another driver who doesn’t have enough insurance coverage.
Medical payments coverage applies to the driver and passengers if they sustain injuries in a motor vehicle accident. However, it doesn’t cover anyone in other vehicles involved in the accident.
Personal injury protection (PIP) insurance is state-specific and helps cover medical expenses after an accident.
When choosing an insurance policy for a higher-risk teenager, it’s important to compare prices and coverage among providers. Full coverage can be the most expensive option but may offer benefits like roadside assistance and rental car coverage that could be helpful for your family.
At the very least, your teenager should have a policy that meets the state’s minimum requirements. To keep car insurance rates for teenagers low, they should maintain a clean driving record. The value of the car they drive also plays a role in determining the insurance rate.
If your teenager buys a new car, the lender may require them to carry full coverage. Moreover, a full coverage policy can be beneficial if they drive an expensive car. Comprehensive coverage can protect them from non-driving-related costs such as theft or damage from natural disasters.
The cost of car insurance for teens varies depending on the driver and insurance provider. However, you can expect a higher rate due to the higher risk posed by inexperienced drivers.
Fortunately, you can reduce the average cost of teen auto insurance by taking advantage of discounts and maintaining a clean driving record. As your teen gains more driving experience, they may qualify for more affordable rates.
