Best Car Insurance For Teens And Young Drivers (2022)

Content of the material

  1. Final Verdict
  2. Video
  3. State Farm
  4. State Farm: Best for Claims Handling
  5. What car insurance does a teenager need?
  6. Liberty Mutual
  7. Liberty Mutual: Best for Extra Coverage Options
  8. How To Add Teens To Your Car Insurance Policy
  9. Should I Add A Teen Driver To My Car Insurance Policy?
  10. Educating Parents and Teen Drivers
  11. Best Cheap Car Insurance for Teens FAQ
  12. Expert Insights to Help You Make Smarter Financial Decisions
  13. Emily Barkley-Levenson, Ph.D.
  14. Do you feel that parents having their teen children take on the responsibility of a big purchase, such as a car, provides a teachable moment that is worth the monetary cost? Why or why not?
  15. Some states prohibit the use of gender to determine insurance rates, even though the motor vehicle death rate of male 16- to 19-year-olds is nearly double that of females of the same age. How do male and female teens pose different levels of risk to insurers?
  16. The North Carolina Department of Transportation has the right under law to suspend teens’ driving privileges if they drop out of school or do not pass at least 70% of their courses. Should academics play a strong role in a teen’s eligibility to drive? Why or why not?
  17. What is the psychological difference between learning in the classroom and learning “on the road” as a driver?
  18. How Much Coverage Does a Teen Driver Need?
  19. Who Can Purchase Car Insurance for Teens and College Students?
  20. Our recommendations for car insurance
  21. How do you save money on auto insurance for teens?
  22. Frequently asked questions
  23. Can I save money if I add a young driver to my auto insurance policy?
  24. Should I buy my teenager a new or used car?
  25. How much will my car insurance increase when I add a teenager to my policy?
  26. Which is the best auto insurance discount for a teenager?
  27. Keeping Them in the Family

Final Verdict

Car insurance for teens and college students can be expensive, and perhaps confusing to buy. The good news is that many insurance companies offer discounts and other ways to help young people save while getting the coverage they need. 

Offering a compelling overall package of price, opportunities to save, ease of use, and financial stability, State Farm is our choice for the best overall car insurance for teens and college students. The company offers teens and college students a good student discount, a driver training discount, and a discount for being away at college. 

State Farm

                Best for Claims HandlingState Farm

Best for Claims HandlingState Farm Rating image, 5.00 out of 5 stars. 5.00 stars Circle with letter I in it. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. = Best = Excellent = Good = Fair = Poor Get a Quote for State Farm

State Farm: Best for Claims Handling

State Farm bested all the companies listed here in J.D. Power's latest Auto Insurance Claims Satisfaction Survey. It also has some nice teen driver discounts that can help young drivers reduce their rates.

Video

What car insurance does a teenager need?

Drivers should make sure their insurance policies provide adequate financial protection, but increasing coverage limits for teens can be a good idea since they’re more likely to be in crashes.

Liability coverage is a good example. Buying the state required minimum isn’t enough to protect you from lawsuits, and sometimes it’s not enough to cover an accident, according to the Insurance Information Institute (III).

If a state only requires $50,000 in bodily injury per accident and a driver causes $70,000 worth of medical bills, they’re on the hook for the remaining balance. Depending on the value of your assets, it may be worth increasing coverage to $100,000 or more for greater peace of mind when it comes to your teen’s driving habits.

Another option is accident forgiveness, which keeps your insurance rate the same after the first at-fault accident on your policy. The “forgiveness” varies by state and insurer, and a policyholder usually has to be claim free for a number of years to be eligible or pay to add it to their policy.

Because some insurance companies include accident forgiveness for free and others offer it as an inexpensive add-on, it could save you money overall if your young driver has an at-fault car accident. This type of insurance isn’t available from every provider.

 Lastly, if a car is still being financed, you’ll likely need to maintain comprehensive coverage and collision insurance until the loan is paid off regardless of who is driving.

Liberty Mutual

                Best for Extra Coverage OptionsLib

Best for Extra Coverage OptionsLiberty Mutual Rating image, 3.50 out of 5 stars. 3.50 stars Circle with letter I in it. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. = Best = Excellent = Good = Fair = Poor Get a Quote for Liberty Mutual

Liberty Mutual: Best for Extra Coverage Options

Liberty Mutual doesn't offer the cheapest car insurance for teens, but it does have some less-common coverage options like new car replacement, gap insurance, and accident forgiveness. These may appeal to teens worried about their car or their insurance rates following an accident.

How To Add Teens To Your Car Insurance Policy

Once your teen receives a driver’s license, you have to begin preparing for the additional expense, even if you use one of our recommendations for the best car insurance for teens. As a two-car family, you are looking at a 58-percent average increase in rates, according to . As a three-car family, those numbers go even higher.

The reason for this increase is the additional risk that teenage drivers bring. Inexperienced teenagers are more likely to get into accidents, and according to the Centers for Disease Control and Prevention, the leading cause of death for teens is motor vehicle accidents. Every day, six teenagers between the ages of 16 and 19 will die due to a motor vehicle crash.

With higher rates, you need to take your time when shopping for car insurance for teens. Once you find the provider you want to work with, though, adding your teenager isn’t difficult:

  1. Ask the insurance company when it requires coverage. Some expect you to add your teen while driving with a permit, while others wait until your child has a license.
  2. Get car insurance quotes on your existing policy, but also consider changing your plan to one with higher liability protection.
  3. Remember to ask for discounts.
  4. Shop various providers every time you are up for renewal.

Should I Add A Teen Driver To My Car Insurance Policy?

It’s often more cost-effective to add a teen driver to your policy instead of having them receive their own plan. Of course, this does increase your yearly premiums but saves your child money. Most auto insurance companies provide a family discount or lower rate when insuring multiple vehicles.

Another reason to add your teen to your policy is to receive coverage no matter what car they drive. If your teenager is involved in an at-fault accident, it won’t matter which one of the covered vehicles was damaged.

It’s almost always a better move to put your teen driver on your own auto insurance policy. Be sure to prepare for higher overall premiums, though. These will likely come regardless of whether your teen motorist has a clean driving record or not.

Educating Parents and Teen Drivers

Experience helps teen drivers stay safe on the road. Experience also helps share a responsible attitude about driving. And responsible driving could help keep your car insurance rates low. We’ve compiled some helpful resources to get teens and parents started.

Best Cheap Car Insurance for Teens FAQ

No. It’s usually cheaper to keep a teen driver on a parent’s policy. There are some cases where a separate auto insurance policy can be cheaper. For example, if a parent has a sports car on the policy, and the insurance company matches the teen driver with the costliest vehicle (some do), then the combination of the car and novice teen driver could push rates sky high.

For national averages, we found the cheapest rate for a family with a teen driver from American Family, Geico, Nationwide, State Farm and USAA. Our rankings also factor in complaints and collision repair scores.

You normally need to add a teen to your insurance when they get a driver’s license. Most insurance companies will cover the teen with your policy while they have a learner’s permit. So if they spend two years learning to drive with a permit—for example, from ages 16 to 18—you can enjoy those two years before high rates kick in.] However, some companies, like USAA, request that you add the teen as soon as they get their permit. With this in mind, don’t assume your teen with a permit is covered. Instead, ask your agent when the young driver must be added (during the permit stage or when fully licensed).

Expert Insights to Help You Make Smarter Financial Decisions

ValuePenguin has curated an exclusive panel of professionals, spanning various areas of expertise, to help dissect difficult subjects and empower you to make smarter financial decisions. Read on for auto insurance insights. Do you feel that parents having their teen children take on the responsibility of a big purchase, such as a car, provides a teachable moment that is worth the monetary cost? Why or why not? Some states prohibit the use of gender to determine insurance rates, even though the motor vehicle death rate of male 16- to 19-year-olds is nearly double that of females of the same age. How do male and female teens pose different levels of risk to insurers? The North Carolina Department of Transportation has the right under law to suspend teens’ driving privileges if they drop out of school or do not pass at least 70% of their courses. Should academics play a strong role in a teen’s eligibility to drive? Why or why not? What is the psychological difference between learning in the classroom and learning “on the road” as a driver? Emily Barkley-Levenson, Ph.D. Assistant Professor of Psychology Read Answer The commentary provided by these industry experts represent their viewpoints and opinions alone.

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Emily Barkley-Levenson, Ph.D Assistant Professor of Psychology, Hofstra University Do you feel that parents having their teen children take on the responsibility of a big purchase, such as a car, provides a teachable moment that is worth the monetary cost? Why or why not? A lot of the attributes that make up what it means to be responsible, like self-control and delayed gratification, are still developing during adolescence and into early adulthood. In fact, the part of the brain that is responsible for these processes, the prefrontal cortex, is still maturing until around age 25. These are also skills that can be trained and improved with practice, which means that the teen years are a great time to work out those self-control muscles, so to speak. Taking on increased responsibility and autonomy with a car can provide an adolescent with lots of chances to build up their self-control and delayed gratification skills. There’s also a phenomenon called the endowment effect, where we value things more if they belong to us or we have a sense of ownership over them. So having your teen pay for their car themselves (or at least contribute their own money toward it) should increase the value they place on it, leading to safer and more responsible behavior. Some states prohibit the use of gender to determine insurance rates, even though the motor vehicle death rate of male 16- to 19-year-olds is nearly double that of females of the same age. How do male and female teens pose different levels of risk to insurers? The research is quite clear that men engage in more risky behaviors than women, including wearing seat belts less frequently and running yellow lights more often. Women perceive a higher likelihood of negative consequences and less enjoyment from these actions than men do, which leads to less risk-taking behind the wheel. I expect these findings would play out similarly with adolescent boys and girls as well. That said, statistical averages can’t predict the actions of any particular individual; teens of all genders can be reckless and risk-taking, and there are many teen boys who are extremely safe drivers. The North Carolina Department of Transportation has the right under law to suspend teens’ driving privileges if they drop out of school or do not pass at least 70% of their courses. Should academics play a strong role in a teen’s eligibility to drive? Why or why not? The reasons why driving privileges are revoked typically have to do with safety (underage possession of alcohol, speeding or reckless driving, etc.). In this case, if there isn’t a strong connection between dangerous driving and poor academic performance, then linking the two in terms of policy doesn’t seem particularly effective. Academic performance does relate to other health-risk behaviors (like violence and drug use), but this is one of those cases of correlation not being the same thing as causation: Other factors such as family stress and poverty can make teens more likely both to underperform academically and to engage in health-risk behaviors, but skipping school doesn’t cause you to drive more poorly. What is the psychological difference between learning in the classroom and learning “on the road” as a driver? Something that shows up over and over again in research with adolescents is a big difference in behavior between “cold” settings (nonemotional, intellectual contexts like a lab or a classroom) and “hot” settings (emotional situations in the real world, especially when peers and social pressure are involved). A teen may make entirely rational and safe decisions in the classroom (or when a driving instructor is in the car) but take risks on the road when they are more “amped up” by the presence of their friends. Back to all experts {“backgroundColor”:”white”,”content”:”\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\”ShortcodeImage–root left\” \u003E\n \u003Cdiv class=\”ShortcodeImage–image-container \”\u003E\n \u003Cimg alt=\”headshot of expert\” class=\”ShortcodeImage–image lazyload\” style=\”width: 60px;\” data-src=\”https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_1.0,f_auto,h_1600,q_auto,w_60\/v1\/emily-barkley-levenson_uajgkh\” src=\”https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_2.0,e_blur:1000,f_auto,h_1600,q_1,w_60\/v1\/emily-barkley-levenson_uajgkh\” data-srcset=\”https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_1.0,f_auto,h_1600,q_auto,w_60\/v1\/emily-barkley-levenson_uajgkh 1x, https:\/\/res.cloudinary.com\/value-penguin\/image\/upload\/c_limit,dpr_2.0,f_auto,h_1600,q_auto,w_60\/v1\/emily-barkley-levenson_uajgkh 2x\”\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\u003C\/p\u003E\n\n\u003Ch3 id=\”expert-emily-barkley-levenson\”\u003EEmily Barkley-Levenson, Ph.D.\u003C\/h3\u003E\n\n\u003Cp\u003EAssistant Professor of Psychology, Hofstra University\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\”ShortcodeToggle–root ShortcodeToggle–article \” id=\u003E\n \u003Cbutton class=\”ShortcodeToggle–toggle\” onclick=\”this.parentNode.classList.toggle(‘ShortcodeToggle–open’);\”\u003E\u003Cp class=\”ShortcodeToggle–label\”\u003ESee their advice\u003C\/p\u003E\u003C\/button\u003E\n \u003Cdiv class=\”ShortcodeToggle–contents-wrapper\”\u003E\n \u003Cdiv class=\”ShortcodeToggle–contents\”\u003E\n \u003C\/p\u003E\n\n\u003Ch4\u003EDo you feel that parents having their teen children take on the responsibility of a big purchase, such as a car, provides a teachable moment that is worth the monetary cost? Why or why not?\u003C\/h4\u003E\n\n\u003Cp\u003EA lot of the attributes that make up what it means to be responsible, like self-control and delayed gratification, are still developing during adolescence and into early adulthood. In fact, the part of the brain that is responsible for these processes, the prefrontal cortex, is still maturing until around age 25. These are also skills that can be trained and improved with practice, which means that the teen years are a great time to work out those self-control muscles, so to speak. Taking on increased responsibility and autonomy with a car can provide an adolescent with lots of chances to build up their self-control and delayed gratification skills. \nThere\u2019s also a phenomenon called the endowment effect, where we value things more if they belong to us or we have a sense of ownership over them. So having your teen pay for their car themselves (or at least contribute their own money toward it) should increase the value they place on it, leading to safer and more responsible behavior.\u003C\/p\u003E\n\n\u003Ch4\u003ESome states prohibit the use of gender to determine insurance rates, even though the motor vehicle death rate of male 16- to 19-year-olds is nearly double that of females of the same age. How do male and female teens pose different levels of risk to insurers?\u003C\/h4\u003E\n\n\u003Cp\u003EThe research is quite clear that men engage in more risky behaviors than women, including wearing seat belts less frequently and running yellow lights more often. Women perceive a higher likelihood of negative consequences and less enjoyment from these actions than men do, which leads to less risk-taking behind the wheel. I expect these findings would play out similarly with adolescent boys and girls as well. That said, statistical averages can\u2019t predict the actions of any particular individual; teens of all genders can be reckless and risk-taking, and there are many teen boys who are extremely safe drivers.\u003C\/p\u003E\n\n\u003Ch4\u003EThe North Carolina Department of Transportation has the right under law to suspend teens\u2019 driving privileges if they drop out of school or do not pass at least 70% of their courses. Should academics play a strong role in a teen\u2019s eligibility to drive? Why or why not?\u003C\/h4\u003E\n\n\u003Cp\u003EThe reasons why driving privileges are revoked typically have to do with safety (underage possession of alcohol, speeding or reckless driving, etc.). In this case, if there isn\u2019t a strong connection between dangerous driving and poor academic performance, then linking the two in terms of policy doesn\u2019t seem particularly effective. Academic performance does relate to other health-risk behaviors (like violence and drug use), but this is one of those cases of correlation not being the same thing as causation: Other factors such as family stress and poverty can make teens more likely both to underperform academically and to engage in health-risk behaviors, but skipping school doesn\u2019t \u003Cem\u003Ecause\u003C\/em\u003E you to drive more poorly.\u003C\/p\u003E\n\n\u003Ch4\u003EWhat is the psychological difference between learning in the classroom and learning \”on the road\” as a driver?\u003C\/h4\u003E\n\n\u003Cp\u003ESomething that shows up over and over again in research with adolescents is a big difference in behavior between \”cold\” settings (nonemotional, intellectual contexts like a lab or a classroom) and \”hot\” settings (emotional situations in the real world, especially when peers and social pressure are involved). A teen may make entirely rational and safe decisions in the classroom (or when a driving instructor is in the car) but take risks on the road when they are more \”amped up\” by the presence of their friends.\u003C\/p\u003E\n\n\u003Cp\u003E\u003Cdiv class=\”ShortcodeAlign–root ShortcodeAlign–horizontal-center\”\u003E\n \u003Cdiv class=\”ShortcodeAlign–container\”\u003E \n \u003Cspan\u003E\u003Ca class=\”ShortcodeLink–root Button–root Button–primary Button–auto-width\” title=\”Back to all experts\” href=\”#expertadvice\”\u003EBack to all experts\u003C\/a\u003E\u003C\/span\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\u003C\/p\u003E\n\n\u003Cp\u003E\n \u003C\/div\u003E\n \u003C\/div\u003E\n\u003C\/div\u003E\n\n”,”padding”:”double”}

How Much Coverage Does a Teen Driver Need?

Most states require drivers to maintain a minimum amount of car insurance in order to legally operate a vehicle. Our guide to state insurance requirements can help you determine how much auto insurance a teen or young driver needs. Depending on your state, you’ll likely need personal injury or personal liability coverage, which helps pay for bodily injury and property damage you cause in the event of an accident.

Who Can Purchase Car Insurance for Teens and College Students?

Car insurance for teens and college students can be purchased by most licensed drivers. Specific age ranges vary by insurance company. Some of the companies in our study required a driver to be 18 to purchase coverage, others required a driver to be only 16.

Our recommendations for car insurance

Insuring a teenage driver can be a balancing act between price and the quality of coverage. Our insurance experts recommend getting auto insurance quotes from several companies and looking at comparisons like State Farm vs. Geico to see which providers meet your coverage needs. We’ve identified State Farm and Geico as smart choices for young drivers. You can read more about them below.

How do you save money on auto insurance for teens?

There are ways to cut down on insurance premium policy costs. For instance, being a safe driver and using more efficient vehicles (such as Honda Civics, Toyota Priuses and Nissan Rogues) tends to cut costs, even for teen drivers, according to Giusti. There are also discounts based on how often you use your car: “Some companies offer discounts to motorists who drive less than the average number of miles per year,” says Janet Ruiz, director of strategic communication at the Insurance Information Institute.

Teens may also qualify for “good student” discounts, or discounts based on learning safe driving habits from a defensive driving course or graduated driver licensing programs.

You may also be able to save money if the younger driver on your policy isn’t using their car because they’re away at college. “If there is a young driver on your policy who is … away at college without a car you may also qualify for a lower rate,” according to Ruiz. Every insurance carrier offers different discounts depending on your coverage option and other factors, so it pays to check which ones apply to you before signing up.

Frequently asked questions

Can I save money if I add a young driver to my auto insurance policy?

It is typically less expensive to add a young driver to your existing auto insurance policy rather than purchasing a standalone policy for them. In addition, your teen will be unable to hold their own auto insurance policy until they turn 18. If you have a young driver to add to your policy, you may want to search for companies with student or young-driver discounts, like good student, student at school, driver training or teen driver savings.

Should I buy my teenager a new or used car?

Several factors go into the price of insurance for various car models, including the value of the vehicle, the statistical likelihood that it will be in an accident and the cost of repairs. Generally, an older vehicle is going to be cheaper to insure with a teen driver than a newer vehicle, usually because parts are more readily available and cheaper.

With an older vehicle, you may also feel comfortable buying liability-only coverage rather than full coverage, meaning that the insurer will not cover damage to the vehicle. That can help keep your auto insurance cost lower, although you should be aware that you’ll have to pay for damage to your vehicle out of pocket.

How much will my car insurance increase when I add a teenager to my policy?

On average, you will spend an average of $1,200 to $1,900 more per year after adding a teenager to your existing auto insurance policy.

Which is the best auto insurance discount for a teenager?

The best discount for your teen is whichever one applies to them. For instance, if your teen is a safe driver, they may benefit from enrolling in a telematics program that tracks their driving in real time. If they are away at college, they may want to benefit from a distant student deal.

Keeping Them in the Family

GEICO makes it easy to move a teen or young driver to their own auto insurance policy. We can apply discounts they qualify for and give them the benefit of their experience on an existing policy. They’ll also continue getting the same great customer service. We’re here to help—from making a policy change, filing a claim, or even just asking us a question.

Disclaimer: GEICO invites driver’s education, law enforcement, civic and community organizations that provide education on highway and traffic safety to download a supply of our materials at no cost. For a complete list of brochures and presentations, please visit our Auto Safety Library. GEICO contracts with various membership entities and other organizations, but these entities do not underwrite the offered insurance products. Some discounts, coverages, payment plans, and features are not available in all states or all GEICO companies. Discount amount varies in some states. One group discount applicable per policy. Coverage is individual. In New York a premium reduction may be available. GEICO may not be involved in a formal relationship with each organization; however, you still may qualify for a special discount based on your membership, employment, or affiliation with these organizations.

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