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Car insurance for teens

By Posted : March 17, 2020

When it comes to teen drivers and car insurance, things get confusing -- and expensive -- quickly.

A parent adding a male teen to a policy can expect auto insurance rate to balloon to more than $3,000 for full coverage. It's even higher if the teen has his own policy. That policy would likely cost more than $6,000 -- and may eclipse $10,000 depending on the state. 

Now, that we've reviewing those sobering facts, let's guide you through your auto insurance buying. We'll look at discounts, options and special circumstances -- so you can find the best teen car insurance.

Even though the right answer is usually to add a teen onto your policy to mitigate some of the cost, there are other options and discounts that can save 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:

Other sections:

Cheat sheet for Adding a teen and Teen policy

 

Getting Started: An Easy Primer

  1. Know your timing. Chances are that your car insurance company will contact you. How does the company know? It 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, it knows all about it. If you don't get the call, 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. However, 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 across the U.S. (except Hawaii) use age and experience as a rating factor. In our studies, adding a teen raises your car insurance costs anywhere from 100% to more than 200%. However, the rates that insurance companies charge you for adding a teen varies, as shown 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 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 2019 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 increased 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-year-olds.

Costs vary by insurance company, which is the reason we suggest shopping for car insurance. It's easy to switch car insurance companies. 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 16-year-old teen.

CompanyFemaleMaleAverageGet a free quote online
Geico$1,632$1,758$1,695Get an online quote from Geico
State Farm$1,394$2,462$1,928Get an online quote from State Farm
Nationwide$2,486$3,228$2,857Get an online quote from Nationwide
Progressive$2,733$4,223$3,478Get online quote from Progressive
Allstate$3,004$4,112$3,558Get an online quote from Allstate
Farmers$5,024$9,248$7,136Get an online quote from Farmers
Average$2,712$4,172$3,442

Methodology

How to add a teen to your policy

If you're choosing a new car insurance company, 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 haven't 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 his or her own insurance? Yes.

Companies will sell directly to teens. However, state laws vary when it comes to a teen's ability to sign for insurance. That means 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.

However, 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:

  • 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.

CompanyFemaleMaleAverage
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 are, in no particular order: GEICO, Farmers, State Farm, Progressive, Mercury and AAA.

Discounts for teen drivers

We've identified the best discounts for teen drivers to get affordable car insurance. 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? Our research shows you can an average of 7% for the discount. That's $361 on average. 
  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. The average student away at school discount is more than 14%, which is a savings of $404. 
  4. Raise your deductible. An easy way to lower car insurance premiums is to raise your deductible. However, 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 isn't financed and not worth much. Use our auto insurance coverage calculator to find out what coverage people "like you" have.
  5. Skip the red Mustang. A car with a high safety rating will be cheaper to insure. Use Insure.com's list of car models to find the cheapest cars to insure. This mostly has to do with the car's cost, how easy it is to repair and claim records. Insure.com also has a list of used cars. 
  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 teens 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 isn't 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. However, you should also understand the insurer still charge higher rates for the first few years of the license. 

"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 teens. There is potential to save. If the student plans to leave a car at home and the college is more than 100 miles away, the college student 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. 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 potential discounts.

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 he or she receives a 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.

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 isn't 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 a driver's 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.

Methodology: This table shows the average annual additional premium charged for 10 ZIP codes in each state  from the following carriers: Progressive, Allstate, State Farm, Nationwide, GEICO and Farmers. Data was provided for Insurance.com by Quadrant Information Services. The premium profile used a base auto insurance price for an owned 2019 Honda Accord, driven by a 40-year-old man with full coverage (100/300/50 liability, plus comprehensive and collision insurance, and a $500 deductible). The additional premium cost was determined by adding a 16-year-old male driver to the base policy. This exercise was repeated for a 16-year-old female.

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