Car insurance for teens

By Posted : 10/16/2015

When it comes to teen drivers and car insurance, things get confusing - and expensive - very quickly. A parent adding a male teen to their policy can expect their new rate to run as high as $6,186, and in some cases 227% higher than insuring an adult driver alone, and a teen buying their own policy can be even more expensive. Let us guide you through this decision - discounts, options, special circumstances - so you find the best teen car insurance.

Even though the right answer is usually to add them onto your policy to mitigate some of the cost, there are other options and discounts that can save you money. We did as much of the legwork as possible for you, hunting down discounts and reading the fine print. In the end, you'll need to compare auto insurance quotes using our quote comparison tool to see which company is best for you.

To start at the beginning, simply scroll down. You can also jump directly to your unique situation:

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Cheat sheet for Adding a teen and Teen policy


Getting Started: An Easy Primer

  1. Know your timing. Chances are excellent your existing car insurance company will contact you proactively. How do they know? Easy - they probably asked you for the names and birthdays of all the children in your home when you first signed up for your policy. So, if your teenager is 16 or 17 now, they know all about it. If you don't get the call, it makes sense to alert your carrier once your teen gets a learner's permit to talk through your options and to give yourself time to compare car insurance companies. In general, permitted drivers are automatically covered as a part of the parent or guardian's policy with no action needed on your part, but when they do have a true driver's license, even provisional, they will need to be on your policy or get their own.
  2. Get ready to compare quotes. Our research shows that insurance companies all across the U.S. (except Hawaii) use age and experience as a rating factor. It's a fascinating point of difference. In our studies, adding a teen raises your costs anywhere from 100% to more than 200%. However, the rates insurance companies will charge you for adding a teen varies widely, as show in the California Adding A Teen To Your Policy table below. Also, 
  3. Understand available discounts. When you add a teenager to your car insurance policy or they get their own, car insurance companies don't actively communicate what discounts are available to you. Use our discount guide below so you're not in the dark.

All 50 states and the District of Columbia now have a Graduated Driver's License (GDL) system, according to the Insurance Institute for Highway Safety (IIHS). GDL programs save lives. A study by the IIHS found states with stronger graduated licensing programs had a 30% lower fatal crash rate for 15- to 17-year olds.

Adding a teenager to your car insurance policy

Adding a teen to your policy is the cheapest way to get your teen insured. It still comes with quite a hefty cost, but you can certainly save if you choose the best car insurance companies for teens. We can help.

How much will adding a teen to my car insurance cost me?

Let's get down to numbers. Every situation is different, but to get a solid snapshot we compared rates in 10 zip codes in each state. The family profile we used owned a 2014 Honda Accord driven by a 40-year old man buying full coverage. Then we added a 16-year old teen to the policy. Here's what happened:

  • The average household's car insurance bill rose 152%.
  • A teenage boy was more expensive. The average bill rose 176%, compared with 129% for teenage girls.
  • California rates rose the most, more than 200%.

The reason behind the hikes: Teens crash at a much higher rate than older drivers - the risk is four times as much. According to the federal Centers for Disease Control and Prevention, the worst age for accidents is 16. They have a crash rate twice as high as drivers that are 18- and 19- years old.

Costs also vary widely by insurance company, which is the reason we suggest shopping for car insurance. It's easy to switch car insurance companies, and we'll provide you the guidance to switch, cancel, and save.

California Adding A Teen To Your Policy Rates by Company

The table shows how much your annual rates will increase when you add a teen.

 Company  Teen rate (female)   Teen rate (male)    Average  
 Company 1       $3,004       $4,112   $3,558
 Company 2       $1,632       $1,758   $1,695
 Company 3       $5,024       $9,248   $7,136
 Company 4       $2,486       $3,228   $2,857
 Company 5       $2,733       $4,223   $3,478
 Company 6         $1,394       $2,462   $1,928
 Average         $2,712        $4,172   $3,442

Note: The specific company names were not mentioned next to the rates, but the companies we're showing rates for are, in no particular order: Nationwide, Progressive, Farmers, Allstate, State Farm, and GEICO.

If you've seen enough and are ready to start comparing quotes for teens, dive into our quote comparison tool and see rates within 10 minutes. Start Now

How to add a teen to your policy

If your choosing a new car insurance company after shopping, you should have already added the teen to the policy when first signing up. If you want to add a teen to your current or new policy, follow these steps:

A quote about car insurance and teens

  1. Call your car insurance company, if they have not already contacted you.
  2. Talk through the changes to your policy in detail, minimum and maximum coverage and insist on hearing the ins and outs of each and every discount. These can add up to considerable savings. If you are also adding an additional car, be sure to ask about a multi-car discount.
  3. Have ready your teen's driver's license information and information about any new vehicles.
  4. Take the time you need to decide. Just make sure your teen isn't driving on a full license without being formally added to your policy or their own. That would be risky.

If my teen gets a ticket, will it raise my rates?

Yes. Once together on the same policy, all driving records - including your teen's - affect premiums, for better or worse. You share in the discounts, and you shall also share in the risk. To understand how a moving violation will affect your rates, we ran a study and found that the additional cost could run from 5% to as high as 20%.

Teen buying their own policy

Can a teen buy their own insurance? Yes. Companies will sell directly to teens, but state laws vary when it comes to a teen's ability to sign for insurance - meaning a parent may have to co-sign - and it's rarely cheaper. In fact, your teen will likely have a higher premium compared to adding a teen to a parent or guardian policy.

But, there are cases where it might make sense for a teen to have their own policy. Progressive cites two:

  • You have a luxury sports car. On a single plan, all drivers, including the teen, are insured against all cars.
  • The teen is eager to be financially independent.

Car insurance is different for a first-time car insurance buyer, but it's a great time to start a relationship with an insurance provider.

How much is car insurance for teens?

Like we've said, teen car insurance is expensive. The younger the driver, the more expensive the car insurance. Young drivers are far more likely to get into car accidents than older drivers. The risk is highest with 16-year-olds, who have a crash rate twice as high as 18- and 19-year-olds. That risk is reflected in the average car insurance rates for teenagers (multiple ages shown for easy comparison):

  • 16-year-old - $3,989
  • 17-year-old - $3,522
  • 18-year-old - $3,148
  • 19-year-old - $2,178
  • 20-year-old - $1,945

Rates not only depend on age, but the company you choose. This table shows the annual rate a teen will receive in California.

 Company      Female            Male            Average     
 Company 1    $2,646    $2,961    $2,804
 Company 2    $2,607    $3,472    $3,040
 Company 3    $5,613    $8,966    $7,290
 Company 4    $2,640    $3,080    $2,860
 Company 5    $2,642    $3,454    $3,048
 Company 6      $2,030    $2,064    $2,047
 Average    $3,030    $3,999    $3,515

Note: the specific company names were not mentioned next to the rates but the companies we're showing rates for are, in no particular order: GEICO, Farmers, State Farm, Progressive, Mercury, and AAA.

You'll notice that companies offer widely different rates. Use our quote comparison tool to receive side-by-side quotes from top insurance carriers in only 10 minutes. Get Started

Discounts for teen drivers

We've identified the best discounts for teen drivers to get affordable car insurance, nine to be exact. Most car insurance companies won't reach out to you with discounts, so you must be proactive. Ask and ask again, insisting on as many discounts as you possibly qualify. Discounts can only be stacked up to a certain point though.

  1. Good student discount. A popular discount is tied to doing well in school. This usually translates as a "B" average (3.0 grade point average) or higher. Age limits do exist; typically, the student must be under the age of 25. How much will you save? A recent study by Consumer Reports good student discount averages $263 a year. Liberty Mutual says its Good Student Discount could mean anywhere from 15% to 35% off. Data collected for Insurance.com by Quadrant Information Services shows that the nationwide good student discount is around 12%.
  2. Defensive driving discount. You can take extra driver education or a defensive driving course. This means go above and beyond the minimum state-mandated drivers' education and training. In some states, discounts can run from 10% to 15% for taking a state-approved driver improvement class. Online classes are a convenient option, but check with your carrier first to make sure it will lead to a discount.
  3. Student "away" discount. Most car insurance companies offer a student "away" discount for students who are away at college or living away from home during high school. You could receive a discount around 5% to 10% of the student's premium, but some insurers advertise up the 30% off.
  4. Raise your deductible. A common way to lower car insurance premiums is to raise your deductible, but weigh against the fact that young drivers are more likely to get into accidents. When you get into an at-fault accident, you have to pay the deductible amount. Increasing your deductible from $500 to $1,000 will reduce your annual premium by by approximately $400. You can also drop comprehensive and collision coverage if the car is not finance. Use our auto insurance coverage calculator to find out what coverage people "like you" have.
  5. Skip the red Mustang. Car insurance rates vary widely by type of car. A car with a high safety rating will be cheaper to insure. Use Insure.com's list of 2015 car models to find the cheapest cars to insure. This mostly has to do with the cost of the car, how easy it is to repair, and claim records. Jeeps are the least expensive to insure.
  6. Good driver discount. Keep a clean record and you can receive a discount. This means don't get into any accidents or violations.
  7. Look for unrelated discounts. Review discounts unrelated to teen like a multiple vehicle discount and a home and auto bundle discount for additional savings.
  8. Low mileage discounts. Pay-as-you-drive pay-per-mile insurance can offer a significant discount. Several car insurance companies offer discounts for if you allow a telematics device to be placed in your vehicle so they can monitor your driving habits. This is considered "pay-as-you-drive." This can give up to a 45% discount. With pay-per-mile, you'll pay for the distance you drive, rather than driving patterns. Both discounts are great for teens or families that don't drive very often.
  9. Delay getting a license. This is not really a discount and probably not the a popular option for an eager teen driver, but it's worth considering. An older teen driver is slightly cheaper to insure, approximately 20% cheaper from the age of 18 to 19.

"If a driver qualifies for several discounts, the first discount applies to your original premium and then your second discount to your revised premium and so on," says Joel Camarano, executive director for auto underwriting at USAA in San Antonio, Texas.

Car insurance for college students

College students can follow the same guidance as given to the rest of teens. There is potential to save though. If the student plans to leave their car at home and the college is more than 100 miles away, they could qualify for a "resident student" discount or a student "away" discount, as mentioned above. These discounts can reach as high as 30%. Also, do well in school because that could lead to a good student discount. Both discounts will require you to contact your insurance provider so they can begin to apply the discounts. While your on the phone with them, don't hesitate to ask about other discounts you may qualify for.

And remember, it's easy to shop for car insurance using our quote comparison tool that allows you to see side-by-side quotes. It's a free online tool and only takes about 10 minutes to see rates. Check it out

Learner's permit insurance

You can get insurance with a permit, but most car insurance companies include the permitted teen on the parents' policy without any action. However, the teen should be added to the parents' policy or get their own policy when they receive their driver's license. When that time comes, be sure to visit the rest of this article for guidance on options and discounts. Also, it may be wise to contact your insurance provider for all options available to you. But, as we have made abundantly clear in this article, it's probably in your best interest to shop using our quote comparison tool so you can see side-by-side quotes.

Opt for no coverage savings option

It's possible to tell your insurance company not to cover your teen, but it's not a given. This is called a named exclusion. Through an endorsement to your policy, you and your insurance company mutually agree that the driver is not covered, which means neither is any accident the driver causes. Not all companies allow this, and not all state do either.

Adding a teen driver cheat sheet

  1. Talk to your carrier as soon as your teen gets their license.
  2. Compare multiple car insurance quotes using Insurance.com.
  3. Consider all coverage options. Think about raising your deductible.
  4. Seek out and stack as many discounts as possible.
  5. Talk to your teen early and often about safety.
  6. Insist they drive a safe car.
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