Best Cheap Car Insurance For Teens Of May 2022

Why teen drivers get higher insurance rates than any other driver?

The first question that pops up in our head is; why teenage drivers get higher insurance rates? As per the insurance companies around the country; teen drivers are much risky as compared to other experienced drivers. Do you know every day almost 6 teen drivers die in fatal road accidents?

With the increasing number of road accidents due to teen drivers, insurance companies have to pay huge claims every year. And this is the reason they charge higher from the teen drivers.

Read more >> How Much Does Your Car Insurance Go Up After an Accident?

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How Much Does It Cost To Add a 16 Year Old To Car Insurance?

As mentioned above, it can cost a lot of money to add your 16 year old to your car insurance. However, there are few things you can do to make sure you’re not over paying.

Take advantage of the few discounts available to young drivers.

Good Student Discount– Generally a 3.0 or better GPA will qualify you for this discount. This can save you anywhere from 3% to 15%.

Driver Training– This discount is not available with as many insurance companies as it used to be. But it can still be a sizeable discount and it’s still a valuable course for your young driver to take.

Monitoring App/Device– Most every insurance company has the option to add a monitoring device. These devices monitor driving habits such as miles driven, speed, hard breaks, etc and give discounts depending on how the driver performs. Since a young driver does not have a driving history, this is the best way to quickly learn driving habits and adjust the insurance rate accordingly.

Older Car– Unless you are wanting to pay an insane amount for your teenagers car insurance, don’t go buy them a brand new car. An older car, that doesn’t need full coverage, will be the best priced car for your young driver.

How rates are determined for teen drivers

Car insurance companies consider several factors when determining teen car insurance rates. A few of the main considerations include:

  • Car make and model: Your vehicle’s make and model affect car insurance rates for several reasons. Certain cars are made with more expensive parts and are costlier to repair, which increases insurance costs. Certain vehicles come with more sophisticated safety features, which may lessen a car insurance company’s risk, and as a result, decrease your premium. However, some of those sophisticated safety features might actually drive your costs higher as they can be expensive to repair. In addition, vehicles have different crash statistics. If your vehicle make and model has a high rate of collisions, your car insurance company may charge you a higher price.
  • Driving history: If a teen has a history of car accidents and moving violations, the car insurance company may see them as riskier to insure, and as a result, increase their premium.
  • Types of car insurance coverage: Minimum coverage car insurance is cheaper than full coverage car insurance. However, most insurance experts recommend purchasing more than the minimum coverage insurance required to better protect your finances. There may be some additional coverage options, however, that you don’t need. For instance, if you drive an older vehicle that you own outright, you would not be required to have comprehensive coverage or collision coverage.

Non-owner Car Insurance

Non-owner car insurance is coverage for drivers who don’t own a car but use rental vehicles, ridesharing, and borrowed cars to get around. While it may be tempting to consider non-owner insurance for your teen, parents should be aware that insurance companies won’t write a policy for drivers with access to the family car.

Average auto insurance rate increase after adding a 16-year-old male driver

StateAnnual Premium without TeenAnnual Premium with Male Teen% Increase
Alabama$1,520$3,987162%
Alaska$1,535$3,678140%
Arizona$1,520$4,065167%
Arkansas$1,914$4,333126%
California$1,921$4,591139%
Colorado$2,020$4,861141%
Connecticut $1,726$3,811121%
Delaware$1,807$3,873114%
District of Columbia$1,809$3,750107%
Florida $2,371$5,362126%
Georgia$1,912$4,747148%
Hawaii$1,230$1,2754%
Idaho$900$2,372164%
Illinois$1,396$3,473149%
Indiana$1,253$2,992139%
Iowa$1,051$2,592147%
Kansas$1,573$3,792141%
Kentucky $1,903$4,524138%
Louisiana $2,654$5,988126%
Maine$1,034$2,734164%
Maryland$1,881$4,746152%
Massachusetts $1,254$3,193155%
Michigan$2,644$4,83683%
Minnesota$1,556$3,881149%
Mississippi$1,636$4,363167%
Missouri$1,725$4,190143%
Montana$1,600$3,592125%
Nebraska $1,316$3,211144%
Nevada$2,277$5,116125%
New Hampshire $1,265$3,162150%
New Jersey $1,908$4,143117%
New Mexico$1,409$3,437144%
New York$2,745$5,26492%
North Carolina$1,380$3,152128%
North Dakota$1,064$2,581143%
Ohio$1,032$2,951186%
Oklahoma $1,846$4,212128%
Oregon $1,271$3,073142%
Pennsylvania $1,533$3,573133%
Rhode Island$2,017$4,888142%
South Carolina $1,548$3,525128%
South Dakota$1,374$2,977117%
Tennessee$1,300$3,820194%
Texas$2,024$4,756135%
Utah $1,417$3,486146%
Vermont$1,130$3,565216%
Virginia$1,221$3,370176%
Washington$1,130$2,934160%
West Virginia$1,406$3,829172%
Wisconsin$1,106$2,720146%
Wyoming$1,316$3,277149% 
National Average$1,742$4,048132%

Quadrant Information Services, 2020

Difference between teen car insurance and young driver car insurance

This is also a very important section to cover for all the parents and the teen and young drivers. Most parents get confused between teen car insurance and young driver car insurance. They believe that both are the same. It is important to understand that teen car insurance is different from car insurance for young drivers.

Teen car insurance is for the teenagers that are legally eligible to drive; drivers between 16 years and 19 years old. While young drivers are the ones between 21 years and 25 years of age.

With age the rate of car insurance keeps decreasing, hence teen drivers get higher insurance rates than young drivers. Some national insurance companies still consider teen drivers and young drivers the same. It can be a bit expensive for young drivers and a bit affordable for teen drivers. So it is always better to make it clear with your carrier. Before buying your policy, ask the insurance company about teen drivers and young drivers.

Read more >> Cheap Car Insurance For Young Drivers

The cost difference of adding a male versus a female teen driver

Clearly, some states weigh gender more heavily when insuring teen drivers. Generally, parents that live in a state which deems male teenagers more risky can anticipate adding another 30% to their premium. 

If insuring a daughter, parents will be happy to know her rates will be substantially less steep. 

Here’s a quick look at the states where adding a male vs. female teen driver will affect parents’ budgets the most and the least. 

30% Parents that live in a state which deems male teenagers more risky can anticipate adding another

Can a teenager get their own car insurance policy?

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.

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.

Frequently asked questions

Country Financial , a regional insurer, offers the cheapest overall rates we found for teen drivers, while State Farm had the lowest rates for national insurers. Auto-Owners had the lowest rates for parents with teens on their policies.

Teen drivers with their own policy pay an average of $4,917 per year. However, the increased cost of adding a teen to a parent’s plan is only $1,809 per year.

Insurers often provide discounts to teen drivers for getting good grades , taking an additional training course beyond basic driver’s education and being away at school, where you won’t be using your parents’ car much. Going on a parent’s or guardian’s policy can lower rates by more than 60%.

How to lower rates for teen drivers

There are several key ways that young drivers can lower the price of their auto insurance and save money.

The first is by qualifying for discounts, as most major insurers offer discounts young drivers can take advantage of.

Discount How you get it Good grades discountMaintaining good grades, usually at least a 3.0Safety course discountsTaking a defensive driving course approved by your insurerAway at school discountLetting your insurer know when a teen is at school and doesn’t have access to a carSafe driving discountAvoiding accidents and speeding tickets

You can also see if your insurer offers accident forgiveness at a reasonable price. It will cost more in the short term, but young drivers are prone to getting into accidents, and the savings will be significant if that happens.

Another significant way to reduce costs is by omitting coverages — such as collision insurance.

Collision insurance is costly for teen drivers because this demographic is statistically more likely to get into an accident and file an insurance claim than more experienced drivers.

It’s important to remember that if a teen driver is at fault in an accident without collision coverage, they will have to pay for repairs themselves. Unless your car is older and valued at only a few thousand dollars, we recommend you maintain collision insurance.

The Cost of Teen Auto Insurance

Expect your premium to increase when you add your teen to your car insurance. According to Reviews.com, motorists ages 16 to 19 have higher accident rates than all other drivers. That creates a significant risk of a claim for the auto insurance company, which results in higher premiums for you.

Insurance.com looked at the changes in rates from insurance companies in 10 different zip codes when a 40-year-old man with full coverage on a 2019 Honda Accord received quotes to add a 16-year-old teen driver. The website found that:

  • Households in California had the highest rate increases of more than 200 percent.
  • On average, the cost of coverage increased by 152 percent.
  • The average increase was 129 percent for a female teen and 176 percent for a male teen.

Insurance companies raise rates for teen drivers because of the high rate of serious crashes among drivers ages 16 to 19. Insurance.com reports that according to the Centers for Disease Control and Prevention this age group has a 400 percent higher accident rate than other age groups. What’s more, the accident rate for 16-year-old drivers is 200 percent more than drivers aged 18 and 19.

They also report these average annual rates for adolescent drivers:

  • Allstate – $3558
  • Farmers Insurance – $7136
  • GEICO – $1695
  • Nationwide – $2857
  • State Farm – $1928
  • Progressive – $3478

The average overall for drivers in this age group is $3442 a year, which breaks down to an average rate of $2712 a year for teen girls and $4172 for teen boys, who have the highest overall accident rate of any demographic group.

In another example, WalletHub looked at the change in the price of a six-month policy for a 2014 Hyundai Sonata when adding a 16-year-old driver to a policy owned by a 50-year-old parent and found an average increase of $2259 for the policy period. In contrast, the average six-month increase to add another 50-year-old to the same policy is just $939.

Should My Teenager Get Their Own Insurance Policy?

No, your teenage driver should not get their own insurance. They should be insured under your policy. This is the case so long as they are living in your house and driving your car. Not only is it more cost efficient to add your teenager to your car insurance but it also ensures you have the correct coverage. Getting your teenager their own car insurance policy while they are living in your house creates all kinds of coverage issues that may affect you at the time of a claim.

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).

How much is car insurance for teens?

A separate car insurance policy for teen drivers can be expensive because they have a greater tendency to drive distracted, speed, tailgate, and not wear a seatbelt. The average cost of teen car insurance, however, will vary based on the exact age of the driver, their ZIP code, driving history, and vehicle type. Learn more about the factors that impact car insurance rates.

Methodology

Bankrate utilizes Quadrant Information Services to analyze 2021 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Quoted rates are based on 16- to 70-year-old male and female driver with a clean driving record, good credit and the following full coverage limits:

  • $100,000 bodily injury liability per person
  • $300,000 bodily injury liability per accident
  • $50,000 property damage liability per accident
  • $100,000 uninsured motorist bodily injury per person
  • $300,000 uninsured motorist bodily injury per accident
  • $500 collision deductible
  • $500 comprehensive deductible

To determine minimum coverage limits, Bankrate used minimum coverage that meets each state’s requirements. Our base profile drivers own a 2019 Toyota Camry, commute five days a week and drive 12,000 miles annually.

These are sample rates and should only be used for comparative purposes.

Age: Rates were calculated by evaluating our base profile with the ages 16-70 (base: 40 years) applied and reflects the cost of adding those ages to their parents’ policy (Bankrate’s base premium). Hawaii does not use age as a determining factor in calculating premiums.

Gender: the following states do not use gender as a determining factor in calculating premiums: California, Hawaii, Massachusetts, Michigan, Montana, North Carolina, Pennsylvania.

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