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Car insurance for 18-year-olds
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Turning 18 is exciting, but for many, it also means more responsibility regarding bills. Some 18-year-olds might wonder whether now is the time to purchase their own car insurance policy or if it’s better to remain on their parents’ policy. Bankrate can help. It may be no surprise that 18-year-olds pay some of the highest car insurance premiums of all age groups, but coverage doesn’t need to break the bank. Our team of insurance experts helps you understand how insurance companies calculate rates for 18-year-old drivers so you can decide what option makes the most sense for you.
How much is car insurance for 18-year-olds?
The cost of insurance will typically be much cheaper on a parent’s policy versus an 18-year-old driver on their own policy. Generally, 18-year-olds pay relatively high premiums for car insurance, with the average full coverage policy costing $6,110 per year and minimum coverage costing $1,967 per year if on their own policy. If remaining on their parents’ car insurance, the average 18-year old driver pays $3,837 per year for full coverage and $1,261 per year for minimum coverage. The high cost is due in large part to the fact that 18-year-olds typically have much less experience behind the wheel than older drivers.
Drivers between the ages of 16 and 19 are at a higher risk for being involved in motor vehicle accidents than any other age group. However, as drivers get older and gain more driving experience, they can generally expect a gradual decrease. 18-year-old drivers on their parents’ policy pay about 6 percent less for full coverage compared to 17-year-old drivers with the same type of coverage.
Additionally, statistics from the National Highway Traffic Safety Administration (NHTSA) show that car accidents are the leading cause of teenage deaths in the country, with over 2,000 young drivers between ages 15 and 19 killed in 2020 alone. To offset these increased risks, insurance companies charge more for young drivers.
Average cost of car insurance for 18-year-old males vs. females
Gender can be used as a rating factor in all but six states — California, Hawaii, Massachusetts, Michigan, North Carolina and Pennsylvania. Male drivers can typically expect to pay higher car insurance premiums compared to female teen drivers, on average. Why? Male drivers statistically engage in riskier driving behaviors, which can lead to a greater number of and more severe accidents.
The table below breaks down the average cost of both full coverage and minimum coverage car insurance for 18-year-old males and females on their own policies. It is important to note that in the six states which ban the use of gender as a rating factor, men and women pay close to the same amount for insurance if all other rating factors are equal.
|Average annual premium||18-year-old male on their parent’s policy||18-year-old female on their parent’s policy||18-year-old male on their own policy||18-year-old female on their own policy|
Cheapest car insurance companies for 18-year-olds
One of the easiest ways to save money on your car insurance is to choose a company with low average premiums. Bankrate’s insurance editorial team obtained average premium information for the largest carriers by market share in the country. We then analyzed the premiums to find the companies that offer low average auto insurance rates for 18-year-olds. Based on our findings, the cheapest car insurance companies are USAA and Nationwide for 18-year-old drivers both on their parents’ policy and on their own.
When looking for a car insurance company, whether for yourself or for your family, it’s important to find a carrier with strong financial strength ratings, dependable customer service and options that you want to personalize your policy. The table below shows the cheapest car insurance rates for 18-year-old drivers for both scenarios, but keep in mind that the rates are averages and individual premiums will vary based on multiple rating factors like vehicle make and model, driving record and claims history.
|Company||Average annual full coverage premium for 18-year-olds on their parent’s policy||Average annual full coverage premium for 18-year-olds on their own policy|
Average car insurance cost for 18-year-olds by state
Location is often an important factor when it comes to car insurance. Whether you’re moving to another city or another state, you can expect that your car insurance rate may be affected. However, some states ban the use of ZIP codes, such as Michigan, while another, like California, limits how they can be used.
|State||Average annual full coverage premium for 18-year-olds on their parent’s policy||Average annual full coverage premium for 18-year-olds on their own policy|
|District of Columbia||$3,463||$5,811|
How 18-year-old-drivers can save money on car insurance
There are a variety of ways that young drivers may be able to save money on car insurance. Most involve taking advantage of the best car insurance discounts available, but there are a few other strategies.
If you’re an 18-year-old driver looking for ways to save on your car insurance, you may want to look into these tips.
Good student discount
Teens enrolled in high school or college with good grades are statistically less likely to speed or drive recklessly. For this reason, many insurance providers reward good grades with a discount. You will likely only be eligible for this discount if you are a full-time student, and you will probably need to provide a copy of your most recent grade card to prove that your grades qualify. Every insurance company will have its own underwriting regulations, but many providers require you to be below the age of 25 and maintain a GPA of at least 3.0.
Distant student discount
If you plan to go to college without taking a vehicle, you might qualify for a “distant student” discount. However, this option is typically only available if you are insured on your parents’ policy. Usually, you will still be covered to drive when you are home on breaks, but you may want to check with your company to determine its specific rules.
Usage-based car insurance and telematics discounts
Many companies offer discount programs that track your driving habits via a mobile app or telematics device, and award you a personalized discount. Usage-based programs, like Nationwide’s SmartMiles, track your mileage and allow you to pay based on the number of miles you drive, because being on the road less means you are at a lower risk of getting into an accident. Other telematics discounts, like Progressive’s Snapshot, track your habits behind the wheel as well as your mileage, speed, hard braking and rapid accelerations, to award discounts based on your driving performance.
Opt for a higher deductible
If you have full coverage, your policy likely has two deductibles: one for comprehensive coverage and one for collision coverage. If you file a claim for damage to your vehicle, you will pay the appropriate deductible and the insurance company will pay the rest of the claim. Generally, increasing your deductible lowers your premium, because you are willing to pay more out of pocket in the event of a claim, which saves the company money. However, you should make sure you can afford to pay the deductible if you do file a claim.
Most insurance companies offer discounts, and taking advantage of as many as you can might help you save. On top of good student, distant student and telematics discounts, you may be able to save by having a vehicle with safety features like anti-lock brakes, getting insurance with the same company as your parents and buying a renters insurance policy from the same company as your auto insurance, which often qualifies for a bundling discount.
How to get the best insurance for 18-year-olds
Although you may be purchasing car insurance for the first time as an 18 year old, finding the right coverage for you does not have to be a difficult process. It does, however, require a bit of research and understanding, especially with auto insurance rates on the rise in 2023. Before you shop for insurance, it might help to:
- Understand how to read a quote: Car insurance policies include several coverage types. Understanding what those coverage types are and what they mean might help you to choose the options that fit your needs.
- Think about your individual needs: Do you want a company that offers a mobile app? Are you looking for ridesharing coverage for your Uber or Lyft job? How much money can you spend on your car insurance? Knowing what factors are important to you could simplify your shopping process.
- Get quotes from several companies: Once you know what factors matter to you, you can get quotes from several companies that fit your needs. This will allow you to compare the premiums, coverage options, discounts, policy features and third-party scores. Just make sure you’re getting quotes for the same coverage types and limits from each company to compare rates accurately.
- Take advantage of discounts: Not all discounts are applied automatically. Talking to a company representative or your agent could help you find additional ways to save.
If you are completely new to purchasing auto insurance, talking to an agent when you begin to shop for coverage might be helpful. A licensed insurance professional can help you decide what type of coverage is best for your situation.
Frequently asked questions
Bankrate utilizes Quadrant Information Services to analyze 2023 rates for ZIP codes and carriers in all 50 states and Washington, D.C. Quoted rates are based on an 18-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 2021 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 18-60 (base: 40 years) applied. Depending on age, drivers may be a renter or homeowner. Age is not a contributing rating factor in Hawaii and Massachusetts.
Gender: The following states do not use gender as a determining factor in calculating premiums: California, Hawaii, Massachusetts, Michigan, North Carolina, Pennsylvania.