Car insurance for families: Finding cheap coverage with multiple drivers

Factors that can affect the cost of car insurance for your family

Insurance companies set your premiumThe payment required for an insurance policy to remain in force. Auto insurance premiums are quoted for either 6-month or annual policy periods. based on the drivers, vehicles, and risk factors such as tickets and accidents. Adding a teen, changing cars, moving, or adjusting coverage can raise or lower your rate, along with location, driving history, vehicle type, and discounts.

The main factors that affect car insurance cost for families are:

The year, make and model of vehicles
Tickets or accidents
What state you reside
Age of drivers
Gender
A student driver’s grades
Whether a family has multiple policies with the same company

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Whenever something major changes for your family, it's a good time to shop around and compare car insurance rates. Whether you're a newly licensed driver or a student heading off to college, comparing quotes can save you a significant amount of money.

How much is car insurance for families?

The average cost of full coverage car insurance for a family with two adults and one teen driver aged 16-19 is $6,945. That's without additional discounts, like good student ($6705 a year). When you combine driver training, good student and student-away-from-home discounts, the average drops to $5,971 a year.

Here are average rates for two adult drivers and one teen, with various discounts applied.

Teen driver discount	Avg. annual premium	Annual savings
No discounts	$6,945	-
With the driver training discount	$6,807	$138
With the good student discount	$6,705	$240
With the student away from home discount	$6,232	$713
With all three discounts (driver training, good student, student away)	$5,971	$974

"There are so many variables when it comes to car insurance, especially with multiple drivers in the household," says John Espenschied, owner of the Insurance Brokers Group, "I would estimate the average family is paying $300 to $500 for car insurance per month, assuming this includes young drivers and multiple vehicles."

Adding teens to a parent's policy is the cheapest way to insure them, adding an average of $4,515 a year. A solo policy for a teen requires a co-signer under the age of 18, and costs more, averaging $9,825 a year.

“It's generally less expensive for parents to add teenagers to their auto insurance policy than it is for teens to purchase one on their own,” says Loretta Worters, vice president of media relations at the Insurance Information Institute. “Rates can increase anywhere from 45% to 60%. By insuring your teenager’s car with your insurer, you may qualify for a multi-vehicle discount, which can offset that amount slightly. That said, insurance companies differ in how they price policies for young drivers, so do some research into prices to be sure to find the best fit for you and your teen.”

Does it matter what car you buy and which car each family member drives?

Yes. The car each person drives affects your insurance cost because insurers look at vehicle value, repair costs and safety ratings when setting rates. When you already face a big increase from adding a teen, choosing the right vehicle can help control your total premium.

Car insurance companies base rates in part on the value of the vehicle, its safety ratings and its crash statistics. Bear in mind that:

An expensive, powerful car is more expensive to insure
You don't want your teenager listed as the primary driver
If you have fewer cars than drivers, you can avoid listing your teen as the primary driver of any of them

If you're in the market for a family car, keep rates low by:

Choosing a lower-priced vehicle with good safety ratings
Sticking to a less valuable vehicle for teen drivers
Checking insurance rates for the cars you're considering before you buy

Check out our list of the cheapest cars to insure for some ideas.

How to get the cheapest car insurance for families

Shopping around, bundling policies, choosing a cheaper vehicle to insure and discounts are among the easiest ways to reduce your family’s car insurance cost. Adding a teen without discounts costs $6,945 a year, while stacking all available discounts lowers it to $5,971, saving $974 annually

Shop around and compare rates regularly. Compare quotes whenever your household changes. Use the same coverage levels so you can see which insurer offers the lowest price.

You should also look at the rates if any of these circumstances arise:

Purchasing a new or different car
Combining cars on a multi-car insurance policy
Adding or removing a driver
Marriage
Divorce
Moving
Adding a teen driver
Home purchase
DUI or major violation (more on DUI insurance)
Accident
Change in credit score

Choose a vehicle that’s cheap to insure. The car you drive plays a big role in your premium. Always check insurance costs before buying a new vehicle.

Bundle policies when you can. Putting your homeowners' or renters' insurance with the same company as your car insurance (often called “bundling”) almost always gets you a better price. In some cases, you can save more than 25% on your liability, collision, and comprehensive coverages.

Increase your deductible. A higher deductibleThe deductible is the amount you pay out of pocket for a covered loss when you file a claim. will mean more money out of your pocket if you need to make a claimAn insurance claim is a request you make to your insurance company for coverage after your car is damaged or you have an accident. You can file a claim online, by phone, or in writing., and that savings on the front end can become expensive should you cause an accident. (See "How much can I save by raising deductibles?").

Multi-car discount - Families with a multi-car insurance plan typically save anywhere from 10% to 25% on their premiums compared to separate policies. You can also stack a home and auto insurance bundle discount on top of a multi-car discount, saving around 15% more on average.

Good student discount - If you've got a student in your family with good grades, you'll likely get a decent discount on your insurance. Most car insurance companies offer a good student discount, both for high school students and college students. A "good student" generally translates into maintaining a "B" (3.0) or better average to qualify for this discount, and typically applies to students under 25. A good student discount lowers the annual premium from $6,945 to $6,705, saving about $240 per year (roughly $20 per month).

Loyalty discounts - Even sticking with your company can help you save money. American Family, Progressive, Allstate, State Farm, and Amica Mutual are among the companies that offer loyalty discounts. It'll usually get you about a 10-15% discount.

Good driver and safe driver discounts - Good driver and safe driver discounts can get you between 5% and 25% in savings, depending on your carrierAn insurance carrier is the company that provides your car insurance policy and pays claims.. Speeding tickets, accidents, drunk driving citations -- all can drive your insurance rates higher. Insurers will check your record to see if you present a risk.

To get the cheapest rates, an insurance company usually requires that you have a clean driving record for at least three years; that means no DUIs, no moving violations, and no at-fault collisions.

Paid-in-full discount - Grab another small discount by paying the annual car insurance bill in full, if you can. That can get you about a 10% savings.

Understand all the car insurance discounts for which you may qualify, so that you can take advantage of some reductions in your bill that can add up.

FAQ: Car insurance for families

How do family auto insurance plans work?

Family car insurance, also known as multi-car insurance, lets you bundle two to five vehicles under a single policy as long as they’re all kept at the same address. It usually costs less than buying separate policies for each vehicle, and it also simplifies things by giving you just one renewal date and bill to manage. This can make your coverage easier to track and may help you save money overall.

Do car insurance rates go down when you have a baby?

No, your car insurance rates won't go down because you had a baby. Although car insurance companies consider parents safer drivers, there's no specific discount applied to your insurance just because you have a baby.

Does car insurance get cheaper after you buy a home?

Yes, your car insurance may get cheaper after buying a home if your insurance company offers a homeowner discount. This discount is offered in addition to the auto and home bundling discount, and you can get it even if you don't bundle.