The Cost of Teen Car Insurance
Car insurance for teens is expensive. Here's what it costs, plus why it costs so much and how you can lower your rates.
Car insurance for teens costs a lot. How much does it cost? If you’re a teenager and you buy your own individual car insurance policy, you’ll pay an average of $438 a month for it, according to QuoteWizard research. And if you’re a parent who adds a teen driver to your policy, you’ll pay an extra $278 a month, on average, for it.
In this article, you’ll learn more about how much auto insurance costs for teenagers. You’ll also learn:
- Why insurance for teen drivers is so expensive
- How to get cheap car insurance for teens
- The best cars for teenagers
- What kinds of insurance coverage teenage drivers need
How much does car insurance cost for teenagers?
To find just how much it costs to insure a teen driver these days, we conducted an experiment. We pulled quotes for teenagers across the country from top insurance companies. Quotes include individual policies for teenage males and females as well as bundled policies for teens with both single parents and married parents.
Our teen driver profile is a 16-year-old without tickets or accidents. The insured vehicle is a 2010 Toyota Camry owned by the teen's 45-year-old parents, who have good driving records. Liability levels are set at 50/100/50, with 50/100 uninsured motorist coverage and a $500 deductible. In other words, a relatively standard insurance policy.
Here are the results:
Some key findings from our survey:
- Teen car insurance is expensive. Insuring a teenage driver is expensive no matter how you look at it. It costs an average of $278 a month to add a 16-year-old to a parent's policy. Buying an individual policy for a teenager costs a staggering $438 a month, on average.
- Teenage boys pay more than girls for auto coverage. Adult men pay more than women for car insurance. This remains true for teenagers, as a 16-year-old boy pays an average of $37 more per month than a 16-year-old girl for an individual plan. That's an extra $444 in a year to insure a boy!
- Bundling can save you money on teen car insurance. Adding a teenager to a parent’s policy is cheaper than buying an individual policy. It costs $302 extra per month to add a teenage boy to a plan. But purchasing an individual plan with identical coverage for a teenage boy costs $456 — or $278 more per month.
- Single parents don’t save much when it comes to adding a teen child to their auto insurance coverage. A policy for a teen and a single parent only costs $13 less than insurance for two parents and a teen. Bundling favors couples.
How much does it cost to add a teenager to a parent’s policy?
The short answer: It costs a lot to add a teen driver to an existing car insurance policy. The exact cost depends on several factors like car make and model, coverage levels, location and more.
According to our study, it costs $193 per month to add a teenage boy and $180 per month to add a teenage girl to a parent’s policy. Remember, however, that these numbers may vary for you.
Do I need to add my teen to my policy if we share a car?
Yes, if your child drives your vehicle, they need insurance. Buying two separate policies for one car doesn't make sense and is illegal in some cases.
So, if you're sharing a car with your kid, put them on your policy. Fortunately, it's usually cheaper to insure teens who share a car.
Why is car insurance for teens so expensive?
Teen car insurance is so expensive because teenage drivers pose a big risk to insurance companies.
For example, young people between the ages of 15 and 19 accounted for 6.5% of the U.S. population in 2017. But according to the CDC, those same teens caused over $13 billion in total costs of motor vehicle injuries. That was about 8% of all injury costs that year.
There are many reasons why teens tend to be dangerous behind the wheel — and why they tend to pay a lot for car insurance:
Teens are new to driving. They're more likely to make mistakes behind the wheel. According to the National Highway Traffic Safety Administration, 75% of serious accidents involving teens are due to “critical errors.”
Inexperience leads to mistakes, and mistakes lead to accidents. Teen drivers get into a lot of accidents — 14% of all police reported accidents involve a teenage driver, according to the Virginia Tech Transportation Institute.
Not only do teenagers crash more often than older drivers. Their accidents are also more serious. In 2017, an average of six teenagers died every day due to car accidents. Drivers between the ages of 16 and 19 are three times more likely to be in a fatal car accident than those over the age of 20.
The human brain doesn't stop developing until the mid-to-late 20s. Your prefrontal cortex, the part of the brain responsible for planning and impulse control, is one of the last brain regions to mature. This may explain why teenagers have a higher propensity for risky driving.
Teens rack up tickets and citations. In California, for example, the citation rate for drivers between the ages of 16 and 19 is 2.1 times higher than it is for all other age groups.
A 2015 AAA study of 1,700 teen driver accidents found that distraction was a factor in 58% of accidents. And we’re not just talking about phone use here. Fiddling with the radio, checking out your reflection and talking with a passenger all count as distractions. Teens are simply more vulnerable to distraction while driving.
When do car insurance rates go down for young drivers?
Drivers typically benefit from big insurance discounts when they turn 25. Insurance companies find that drivers ages 25 and up are statistically better drivers than younger people. They're less likely to cause accidents and violations, and their insurance rates reflect that.
While a rate decrease is typical around age 25, it's not a guarantee. If you have a bad driving record, you may still pay high insurance premiums.
How can I get cheaper teen car insurance?
Teen auto insurance is expensive, but that doesn’t mean you have to pay top dollar for it. Here’s how to get the cheapest car insurance for teens.
People who complete certain driving courses and programs often earn great car insurance discounts. Defensive driving courses could net you a 10% rate discount. Graduated Driver Licensing (GDL) programs may help you save money, too. Plus, a GDL helps ensure that a teenager is a safer driver.
Most insurance companies offer discounts to student drivers with good grades. Check with your insurer to see if you qualify for one of these good student discounts.
You may qualify for big discounts if your car has safety features or enhancements. Some of the vehicle add-ons that can save you money:
- Anti-theft devices
- Blind-spot detection systems
- Electronic stability control
- Monitoring devices
If you want your best deal, getting quotes from multiple insurance companies is crucial. Each insurer uses different methods to decide your monthly rate. One may charge you considerably more than another for the same coverage. That's why shopping around and comparing quotes from several insurers is so important.
Bundle your policies
One of the best ways for teens to save money on car insurance is to get on their parent's policy rather than buying their own. If you do buy your own policy, try to bundle it with another one, like a renters insurance policy. That should earn you a bundling discount.
Buy a safe car
Insurance companies determine your rates in part by your car make and model. This is even more important when insuring a young driver. Teens can get big discounts when they drive a safe vehicle.
Best cars for teen drivers
With so many makes and models available, picking a first car for a teen is no easy feat. One car feature that matters no matter what make or model you choose, though, is safety. Driving a safe car as a teen is vital for two reasons:
- It costs less to insure a safer vehicle. That's especially true for teen drivers.
- Teenagers get in more fatal car accidents than any other age group. A safe car can be the difference between life and death.
The Insurance Institute for Highway Safety has published a study of the best car make and models for teenagers. These rankings are based on four parameters:
- Cars with less power are safer for teens. There are no flashy sports cars with high horsepower on this list.
- Bigger and heavier vehicles are safer, too. They accelerate slower, and they protect the driver more in the event of a crash.
- Electronic stability control, or ESC, helps drivers control the car on curves and poor terrain.
- Safety ratings are crucial. This list contains only vehicles with a minimum four-star safety rating from the National Highway Traffic Safety Administration.
Most teenagers drive used vehicles, so we set a $10,000 price limit for the table below. Listed prices are based on Kelley Blue Book valuation. Using this data and qualifiers, we selected the following 10 best cars and SUVs for teen drivers:
|Ford||Flex||2011 and newer||$8,700|
|Ford||Fusion||2013 and newer||$8,100|
|Ford||Taurus||2013 and newer||$10,000|
|Honda||Accord (coupe)||2013 and newer||$8,900|
|Honda||Accord (sedan)||2013 and newer||$9,400|
|Mazda||6||2014 and newer||$9,000|
|Subaru||Legacy||2013 and newer||$8,300|
|Volkswagen||Jetta||2015 and newer||$8,900|
|Volkswagen||Passat||2013 and newer||$6,600|
|Volvo||S60||2011 and newer||$7,900|
What kinds of car insurance coverage do teens need?
There are many different types of car insurance coverage. Use the following information to decide which kind and how much you need as a teen driver.
Every teen's car insurance policy must include liability coverage. Liability coverage pays for damages to other people and their property.
Skimping on liability car insurance is a common mistake. If you or your teen cause an accident involving another person, though, you're going to be on the hook for that person’s damages. Without liability coverage, those costs could wreck your financial future. If you can afford it, buy more than your state's minimum level of liability coverage.
Buying state-minimum coverage is tempting because it saves money. But it opens the door for lawsuits and bankruptcy if you cause an accident. That's why experts recommend you buy at least $50,000 in property damage liability and $100,000/$300,000 in bodily injury liability.
Comprehensive and collision
These two coverages work together to pay for damage to your car. Comprehensive coverage protects your vehicle from non-collision damage like natural disasters, theft and vandalism. Collision coverage reimburses you for vehicle damage caused by an accident.
These coverages are usually required for financed cars. If you drive an older used car that isn't worth much, consider skipping collision and comprehensive. Why? Let’s say your car is worth $2,500. If you pay $500 a year for collision insurance, that equals 20% of your car’s value.
Uninsured and underinsured
Uninsured and underinsured motorist coverage protects you when a driver without insurance — or without enough insurance — hits you and can't pay your bills.
If you have collision insurance, it will help cover your car's damages. That's a possible reason to skip out on uninsured and underinsured coverage.
Since this coverage depends on other drivers, it's not vital for teens like liability insurance. If you can afford it, though, it's a great added layer of protection.
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