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Many parents may struggle with the cost of their new car insurance premium after adding a teen driver to their policy. After all, teenagers are among the highest risk drivers due to their inexperience behind the wheel. However, there are savings opportunities specific to young drivers — you just need to know where to look. Bankrate’s insurance editorial team used their decades of industry experience to bring you these tips to help you save when adding a teen driver to your auto policy.
How to save on car insurance when adding a teen driver
Insurers charge higher rates on average for teens than for any other group of drivers, but cheap car insurance for teens is possible. In particular, driving behavior programs, good student discounts and telematics can help provide reductions in premiums. Here are a few discount opportunities to explore:
Good student discount
It’s common for car insurance companies to offer discounts for full-time students who maintain good grades. For instance, Allstate offers a good student discount to unmarried drivers, under 25 years of age, who have at least a B- average. Additionally, State Farm offers up to 25% savings for students with good grades, up to age 25 or their last year of school. If your teen is a top student, you may want to call your agent to ask about savings. Some companies require you to submit proof of grades by sending in a copy of your child’s report card, but the small amount of time it takes to do so could be worth it.
Enroll in a safe driving course
At-fault accidents on a teen’s driving record can cause rates to increase substantially, especially compared to drivers in other age groups. Many insurers now promote driver safety courses as a way to teach young, inexperienced drivers the rules of the road and provide teen driver discounts. Geico, State Farm, Allstate and Travelers are all examples of carriers that reward drivers with a premium discount upon completion of required driver safety training courses.
Distant student savings
If your young adult driver moves away from home to attend college and leaves their car behind, they might be eligible for a lower rate. For some companies, this savings comes in the form of a distant student discount. For others, the savings isn’t a discount but is instead an “away-at-school“ driver status that can cause a decrease in your premium. Either way, your child must usually be a certain distance away from home (typically 100 miles or more). Whether your company offers a distant student discount or an away-at-school status, this could be a great savings opportunity to have, especially when combined with the good student discount.
Similar to the distant student, if your teen drives the car a low number of miles each year, then usage-based insurance may be a good option. For example, Nationwide offers the pay-per-mile option through its SmartMiles program, providing coverage with a premium that changes each month, depending on the number of miles actually driven.
Consider the teen’s car
The make and model of your vehicle can have a considerable impact on car insurance rates. With this in mind, you may want to be strategic when buying a car for your teen driver. If you want the lowest rates, a used sedan could be a more economic option than a new, sporty coupe. However, remember that older vehicles may lack safety features such as anti-theft devices and anti-lock braking systems, which might lead to a higher premium. Most insurance professionals recommend that you get separate quotes for all of the vehicles you are considering purchasing before making your decision, but be sure to list your newly-licensed teen as the driver to get the most accurate rate.
Take advantage of telematics
Installing a telematics device in your teen’s car or downloading a telematics-based app from your insurer may help you monitor their driving habits, and it could net you a discount, too. A telematics device is a small piece of equipment that you plug into your vehicle, but could also work through your phone with the proper app installed, and gathers driving data such as rate of braking, average speed and the time of day a car is driven. Many companies now offer a telematics discount, including:
Why it costs more to insure teen drivers
The cost to insure a teen driver largely depends on whether you add them to your policy or if they purchase their own separate policy. For example, the average premium for an 18-year-old driver on their own policy (with no discounts applied) is $5,320 a year for full coverage. In contrast, the total premium for a policy that includes a married couple and their 18-year-old is $3,352 (with the good student and driver’s training discounts applied). For comparison, the national average cost of car insurance for a 40-year-old driver is $1,771. While it could be cheaper to add your young adult to your existing policy, comparing quotes is the only way to know for sure.
Car insurance for teen drivers is usually higher-than-average because teens typically practice more at-risk driving behaviors, including:
- Not using seatbelts
- More likely to drive distracted
- Higher rates of alcohol use
- More likely to speed
- More likely to be involved in accidents at nights and on the weekends
Despite these numerous risk factors, it is still possible to save money by seeking out the cheapest car insurance companies and requesting quotes.
Where to shop for teen driver car insurance
Knowing which carriers offer the best discounts for teen drivers while providing adequate coverage is critical. Requesting quotes from multiple carriers is important because it allows you to see equal coverage comparisons to make sure your teen has adequate insurance coverage at a competitive price. In addition, many insurance carriers will work with you to find the best insurance discounts and cheapest full coverage for teen drivers.
Based on our extensive research, the following carriers could offer the best car insurance for young drivers:
- Auto-Owners: Auto-Owners has plenty of savings opportunities that your teen may be eligible for, including good student and the GPS-centered Teen Monitoring discount. However, it is important to note that Auto-Owners is only available in 26 states, so it may not be an option in your area.
- Geico: If your young adult child lives at college at least 100 miles away and they do not have a vehicle, they could qualify for savings via the away-at-school status. Additionally, Geico offers eligible drivers good student and driver’s training discounts.
- Nationwide: Nationwide offers an array of discounts for teens, including a good student and distant discount, plus access to the Nationwide SmartRide program to monitor safe driving habits.
- Progressive: Progressive offers the Snapshot program, a telematic program designed to monitor teen driving habits and reward them with lower teenage insurance premiums. For safer teen drivers, this could be advantageous.
- State Farm: Although State Farm allows your teen driver to take advantage of many discounts geared towards their demographic, its Steer Clear program is what sets it apart. This program aims to help young drivers improve their skills behind the wheel by offering on-the-road training, mentoring and an online course.
Frequently asked questions
People have individual needs when it comes to car insurance. Some drivers are on a tight budget and as a result, cheap premiums are at the forefront of their minds. Others may be willing to spend more on coverage for the peace of mind that a high financial strength rating can bring. For these reasons, the best car insurance company will be different for everyone. To help narrow your search, you may find it helpful to prioritize what you’re looking for in your auto insurance and use this list when gathering quotes.
There are several things to keep in mind when searching for the best used car for your teen driver. Older cars could be cheaper to insure but may not have important safety features such as a backup camera. Furthermore, a minivan could offer a lower premium than a coupe, but the minivan’s lower gas mileage might outweigh the savings you could see on your insurance bill. Along with features, you’ll have to consider the car’s sticker price. To get a holistic view of how much money you’ll need to work into your budget, it may be a good idea to get free online car insurance quotes and add the monthly premium expense to your car payment (if applicable).
Most car insurance companies will not sell a policy to a minor, so if your teen is 16 or 17 years old, you may have no choice but to add your child to your car insurance. Based on our research, however, if your teen is 18 or 19 years old, their premium may be higher on their own compared to what they’d pay as an additional driver on your policy. Although adding your teen driver could allow for a lower premium, it’s important to note that if your teen gets into an accident or is issued a ticket, that activity can increase your overall rate. Additionally, some insurance companies may require you to submit proof that your teen is no longer in your household or has their own insurance to remove them.
Bankrate utilizes Quadrant Information Services to analyze 2022 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Rates are weighted based on the population density in each geographic region. Quoted rates are based on a 40-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 2020 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 16-19 (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 due to state regulations.
Teens: Rates were determined by adding a 16- or 17-year-old teen to a 40-year-old married couple’s policy.