Car insurance for teen drivers

Best car insurance for teen drivers

We chose the best car insurance companies for teens by analyzing factors specific to teen drivers. First, we researched average auto insurance rates pulled from Quadrant Information Services. Price is far from the only factor to consider when insuring a teen, though, especially when you know teens are more likely than any other age group to get into accidents. To that end, we also looked into coverage options, teen-specific discounts, safe driving programs and third-party scores for each insurer. Because we know that accidents do sometimes happen, we also analyzed 2023 claims satisfaction scores from J.D. Power.

We compiled these factors to create a Bankrate Score for each company, calculated on a scale of 0.0 to 5.0. The higher a company scored, the higher that carrier ranked in the individual categories. Our Bankrate Score can help you understand a company’s overall profile when shopping for teen car insurance.

It is helpful to know that, while your age factors into your car insurance premium in most states, Hawaii and Massachusetts prohibit this practice. Similarly, in California, Hawaii, Massachusetts, Michigan, North Carolina and Pennsylvania, car insurance companies are prohibited from using gender as a rating factor.

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Nationwide

Average cost of car insurance for teen drivers

The average cost of car insurance varies for male and female young drivers, with female teen drivers generally paying less than males. Keep in mind, however, that Hawaii and Massachusetts ban the use of age to calculate car insurance premiums. Additionally, California, Hawaii, Massachusetts, Michigan, North Carolina and Pennsylvania prohibit using gender as a rating factor.

Female drivers typically pay less than their male peers since male drivers are seen as riskier to insure. Studies show that males speed more and generally exhibit more risky behavior behind the wheel than female drivers. Teenage drivers and young adults also have the highest cell phone usage of all age groups, which may increase the risk of causing an accident or getting a ticket due to distracted driving.

Cost of car insurance for teens on their parents’ policy

As we noted above, the teenage car insurance average per month is generally on the high side. One factor that can bring the overall cost of car insurance for teens down is to remain on their parents' policy until they leave home and establish their own residence.

Here is the average annual premium for full coverage car insurance for teen drivers, both males and females, added to their parents’ policy:

Cost of car insurance for teens on their own policy

If you compare the rates for teens with their own policy against the rates of teens on their parents' policy in the table above, it becomes clear that savings generally lie in remaining on the parents' policy even after the teen turns 18, when possible.

Car insurance rates generally decrease as drivers get older and gain more experience behind the wheel. By maintaining a clean driving record and taking advantage of discounts, teenage drivers can typically expect lower car insurance costs over time.

Average car insurance costs for teen drivers by state

The state where you live also affects your auto insurance premium, as illustrated in the table below. Massachusetts and Hawaii are the cheapest states for teen drivers of all four ages, which makes sense because these states don’t permit age as a rating factor. However, Massachusetts is allowed to factor in years of driving experience in lieu of age.

New York, Louisiana, Florida, Michigan and Nevada have the most expensive average rates for car insurance when adding a young driver to their parents’ policy.

These rates are based on the top insurers in the country and are for full coverage car insurance for teens added to their parents’ policy and thus reflect added cost and not the total cost.

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 sophisticated safety features might increase your costs as they can be expensive to repair if damaged in a covered claim. In addition, vehicles have different crash statistics. If your vehicle's make and model has a high rate of collisions, your car insurance company may charge you a higher price.
• Age: Statistics show that drivers with less experience on the road are more likely to be involved in a car accident or engage in risky driving behaviors like speeding. As young drivers become more experienced, they are considered less of a risk in most states and typically see lower premiums as long as they maintain a clean driving record. Hawaii and Massachusetts, however, do not allow using age as an insurance rating factor.
• 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 increase their premium.
• Types of car insurance coverage: Minimum coverage car insurance is generally cheaper than full coverage car insurance. However, most insurance professionals recommend purchasing more than the minimum coverage insurance required to better protect your finances. There may be some additional coverage options, however, that you may not 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.

Discounts for teen drivers

Teen drivers and young adults may lower their car insurance premiums by benefiting from some of the best car insurance discounts for students and various other discounts.

• Good student discounts: Unmarried, full-time students may get a good student discount by maintaining a certain letter grade or grade point average. The savings amount and eligibility criteria vary by company.
• Distant student discounts: A distant student discount, also called student away at school, is a potential way to save for college-aged drivers. This discount typically applies to students who go to college at least 100 miles from home and do not take a car with them.
• Driver training discounts: Driver training programs help teenage drivers develop safer and more responsible driving habits and may also save money on car insurance. The requirements and savings differ by carrier.
• Usage-based program discounts: Many insurance companies offer a way for all family members to save on car insurance with a usage-based program, also known as a telematics program. Telematics programs require a smartphone or plug-in device installed into the car to monitor driving habits and miles driven. Maintaining safe driving habits can earn you cheap car insurance rates.

What coverage type does my teen need?

In almost every state, you are required to carry a minimum amount of insurance coverage to drive legally on public roads. This generally consists of liability insurance to cover damage and injuries to the other driver, their vehicle and any other damaged property in an at-fault accident. Depending on the state, other requirements may include other elements such as uninsured motorist coverage or personal injury protection.

If you have a car loan or lease on your teen's vehicle, it's likely that you'll also need to purchase collision and comprehensive insurance which together with liability are often referred to as full coverage. This insurance helps pay for damage to your teen's car if they are in an at-fault accident or have a mishap such as hitting an animal.

If you don't have a loan or lease, and your teen's car is an older model, you may consider dropping (or not signing up for) full coverage. This is likely to save you money and may be a good idea if the car is old enough to not be worth fixing in the event of an accident.

Frequently asked questions

Methodology

Bankrate utilizes Quadrant Information Services to analyze April 2024 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 single, 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 2022 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.

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

Teens: Rates were determined by adding a 16-, 17-, 18- and 19-year-old teen to their 40-year-old married parents' policy. The rates displayed reflect the total cost of a driver this age added to their parents’ policy.