How Much Is Car Insurance for Teens?

How Much Is Car Insurance for Teens?

If you have a teenager in your household, you might find yourself asking, “How much is car insurance for teens?” Teenage drivers face higher car insurance rates due to their lack of driving experience and increased risk. In this article, will explore everything you need to know about the cost of car insurance for teens, along with valuable tips for finding affordable insurance for young drivers.

Why Car Insurance for Teens Is Expensive

How Much Is Car Insurance for Teens?
How Much Is Car Insurance for Teens?

Car insurance for teenagers is costly because they have less driving experience, making them more prone to auto accidents and traffic violations. Statistical data shows that new drivers with limited experience are more likely to cause accidents compared to older, more seasoned drivers.

According to the Centers for Disease Control and Prevention (CDC), motor vehicle crashes are one of the leading causes of death for teenagers. Additionally, the Insurance Institute for Highway Safety (IIHS) reports that teen drivers are involved in four times as many accidents compared to drivers older than 20.

Insurance companies consider various factors when setting rates for drivers, and age is just one of them. Other factors affecting insurance costs for teens include marital status, gender, education level, credit score, type of vehicle, and ZIP code. Since teens often tend to be single, without a college degree, and lacking an established credit history, their auto insurance rates are higher. Even gender can influence how much a teen driver pays for insurance, with males generally paying slightly more than females.

Average Cost of Car Insurance for Teens

How Much Is Car Insurance for Teens?
How Much Is Car Insurance for Teens?

On average, car insurance for teens costs significantly more than it does for any other age group, including seniors. According to Forbes Advisor, the average cost of a car insurance policy for two parents and a 16-year-old driver is $5,367 per year or $447 per month, for full coverage. Policies with minimum coverage may have lower rates.

When teens purchase their own policies, the average cost of car insurance is even higher, with about $8,108 for a 16-year-old female and $9,422 for a 16-year-old male, according to Forbes Advisor. In most cases, it’s more cost-effective to include a teen driver on their parent’s policy, as young adults under 18 usually can’t legally own any property in most states. Furthermore, purchasing a car will require an adult co-signer. Adding teens to their parent’s policy is generally a more straightforward and affordable option.

Best Car Insurance Providers for Teen Drivers

How Much Is Car Insurance for Teens?
How Much Is Car Insurance for Teens?

The cost of car insurance for teens can vary significantly depending on the insurance company chosen. Forbes Advisor provides average annual costs for a 16-year-old driver on a policy with two parents, with some of the top car insurance companies as follows:

  • 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

Remember that individual rates may vary based on factors such as age, driving record, level of coverage, and qualifying discounts. It’s crucial to compare quotes from multiple insurers to find the best rates for your teenage driver.

How to Save on Car Insurance for Teens

How to Save on Car Insurance for Teens
How to Save on Car Insurance for Teens

Given the high cost of car insurance for teens, it’s essential to explore ways to decrease the expenses. There are several ways to reduce your teen’s auto insurance rates:

  1. Maintain good grades: Many insurance companies offer good student discounts, usually averaging around 7%, for students with a B average or higher. Some insurers extend good grade discounts to college students as well.
  2. Complete a defensive driving course: Taking a defensive driving course can lead to around 10% discounts on car insurance costs. These courses significantly reduce the risk of accidents, and additional driver’s education may also qualify for a discount.
  3. Ask for an Away Student Discount: College students who attend school away from home may be eligible for discounts between 5% and 10%.
  4. Drive a cheap and safe car: Less expensive vehicles with high safety ratings and driver assistance features are more affordable to insure. Choosing a safe car can help reduce the likelihood of accidents.
  5. Maintain a clean driving record: While teen drivers lack a driving history, keeping a clean record can lead to future discounts. Most insurance companies offer safe driver discounts for those free of accidents or traffic violations.
  6. Compare quotes: Comparing quotes from various insurers is vital to finding the most cost-effective policy. Request insurance quotes online or work with an insurance agent to explore available insurance products.
  7. Review quotes annually: As your teen gains more driving experience, insurance rates should decrease. Regularly compare and review quotes during each renewal year to ensure you’re getting the best rates.

By employing these strategies, you can find an insurance policy for your teen that is as affordable as possible. Keep in mind that car insurance for teens will still be higher than it is for adult drivers, even with discounts.

How to Choose the Best Insurance for Teen Drivers

When choosing auto insurance for teen drivers, it’s essential to consider more than just the price. The cheapest option may not provide adequate coverage or protect your teenager’s safety. Instead, look for an insurance provider that offers discounts and additional benefits.

Some insurance providers offer accident forgiveness programs, which can be beneficial if your teenager is involved in an accident during their early driving years. Maintaining a clean driving record can also help control insurance costs for the entire family.

How Much Insurance Does a Teenager Need?

The cheapest insurance premiums for teens typically provide minimum coverage, meeting state requirements. However, you may want to consider additional policies to protect your young drivers, especially in the event of an expensive accident.

Available insurance types include:

  • Liability coverage: A requirement in most states, this policy includes bodily injury and property damage insurance to cover costs related to an at-fault accident.
  • Full coverage: This policy includes comprehensive and collision coverage, offering the highest level of protection, but also the highest premiums. It may not be necessary for teens driving older vehicles without an auto loan.
  • Uninsured and underinsured motorist coverage: This coverage protects your teenager if they’re involved in an accident with a driver who lacks sufficient insurance.
  • Medical payments: Covering medical expenses for the driver and passengers after an accident, but excluding others involved in the accident.
  • Personal injury protection (PIP): A state-specific insurance that covers medical expenses after an accident.

In conclusion, the cost of car insurance for teens is generally higher due to their lack of driving experience and increased risk. However, by leveraging available discounts and maintaining a clean driving record, you can lower insurance costs for your teenage driver. It’s essential to review your options, compare quotes, and choose the policy that best suits your young driver’s needs while ensuring their safety on the road.


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