Best car insurance for teens

For a teen, getting a driver’s license is an exciting time. For the parents and caregivers of teens, though, a teen getting licensed likely means insurance premium increases. Many parents dread calling their insurance companies to add a teen driver, knowing that their rates will probably increase. However, there are ways you may be able to keep your premium in check when insuring a teen or young driver.

Bankrate partners with Quadrant Information Services to obtain up-to-date rate information, including the average premiums to add teens and young drivers to a parents’ insurance policy. If you are armed with knowledge about teens and young drivers, such as the average premium increase when adding them to an existing policy and why they are relatively expensive to insure, you may be in a better position to know how to offset the increase in your insurance costs.

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Best car insurance for teens

Teenagers are a unique risk for insurance companies. Because teens do not have much experience on the road, insurance companies charge higher premiums to offset the risk of a claim. In fact, drivers aged 16-19 have a higher risk of auto accidents than any other age group. Finding the best auto insurance for a teenager starts with looking at the best providers. Here are some of the top options.

Geico

Geico, a company known for offering a multitude of discounts, may be a good choice for households with teen drivers to insure.

*16- and 17-year-olds on their parents’ policy

Among the insurers we have researched, Geico provides the best rates for teen drivers. Parents of teens may earn up to a 25 percent discount for insuring multiple vehicles, and teens with a “B” or better average in school may enjoy up to a 15 percent discount with the good student discount.

State Farm

State Farm is the largest personal auto insurer in the country and one of the best for teen drivers when it comes to discount programs.

*16- and 17-year-olds on their parents’ policy

State Farm’s discounts for teen drivers could help you control your car insurance costs. The Steer Clear program can help your teen develop safe driving habits and save you up to 20% on your car insurance premium. State Farm also offers a good student discount and a driver training discount to help teens save even more.

Progressive

Progressive is a well-known company that offers competitive rates for teens.

*16- and 17-year-olds on their parents’ policy

Progressive’s Snapshot program may offer peace of mind for parents and potential savings for their teen drivers. The usage-based insurance rating program uses an app or plug-in device to monitor a driver’s driving habits. Progressive claims Snapshot users save $145 per year, on average. Snapshot is not offered in all states.

Best car insurance for young drivers

Because they have a bit more driving experience than teens, the best car insurance for young adults might be different from the best option for teens. Here are the top car insurance providers for slightly older drivers.

Geico

Even after your teen has become a 20-something, Geico offers competitive premiums and multiple discounts.

For young adults, Geico comes through again with the lowest auto insurance rates. Recent college grads might also earn discounts for alumni association membership and fraternity or sorority affiliation. Young adults who are members of the U.S. Armed Forces could earn up to a 15 percent discount, along with additional savings when deployed.

Nationwide

Although this provider did not make our list of best insurance companies for teens, by the time a driver is in their 20s, Nationwide may be a good option for car insurance.

Young adults can save money on car insurance when they enroll in Nationwide’s SmartRide program. The usage-based insurance rating program uses an app to track acceleration, braking, idle time, mileage and nighttime driving. Because most college students who live on campus spend less time behind the wheel, limited driving and good driving habits may lead to great savings. Drivers get a 10 percent discount just for signing up and can earn up to a 40 percent discount depending on their driving habits.

State Farm

State Farm continues to be a great auto insurance option for drivers in their 20s, just like it was for teen drivers.

Young people often need help navigating the challenges of university life or leaving the nest to start their own families. State Farm makes life a little easier for young adults with an exceptional roadside assistance program. The covers battery jump starts, fuel delivery, locksmith service, towing and up to one hour of roadside mechanic’s labor.

Average cost of car insurance for teens and young drivers

Knowing the national average cost of car insurance for teens and young drivers may help you to know if the quote you have received to add your teen to your policy is competitive or if you need to consider switching carriers to get a better rate. The premiums below are the average annual full coverage premiums for males and females, by age.

*16- and 17-year-olds on their parents’ policy

Age and gender are major factors insurers use to determine teen auto insurance rates. On average, an 18-year-old pays around $5,727 for an annual premium. By the time they reach 25 years of age, males pay an average of around $2,046.

The price you pay for your teen driver will likely be different than the premiums above. Insurers use a number of factors, such as your geographic location, the type of cars you insure and the driving history for all the drivers in your household to determine premiums.

How are rates determined for young drivers?

Insurers determine premium rates for teens the same way they do adults. Rating factors include:

• Age: Typically, drivers 25 years of age and younger pay more for car insurance, because statistically, they cause more accidents than older drivers
• Automobile make and model: Some cars are more expensive to insure than others. Before buying a car, it may be a good idea to get a quote from your insurance carrier to make sure you can afford the insurance.
• Credit: Most states allow insurance carriers to use your credit score when calculating your policy rate. People with poor credit typically pay much higher rates than consumers with good credit scores.
• Gender: Males usually pay higher rates than females pay for car insurance, even if they have clean driving records. Men are statistically more likely to get into accidents than women, and those accidents tend to be more severe.
• Location: Car owners who live in areas prone to car theft and vandalism pay more for auto insurance. Additionally, every state has different insurance laws, which can affect premiums.
• Mileage: The more you drive, the more likely it is that you will have an accident. People who only use their cars occasionally usually pay lower rates than people who drive several miles every day.
• Types and amount of coverages: Drivers who only purchase required coverages such as bodily injury and property liability insurance generally pay less for car insurance than motorists who also buy collision and comprehensive insurance. If you own your vehicle outright, you can buy state required coverages, but if you finance a vehicle, the lender will require you to buy collision and comprehensive insurance too.

Because these variables will change your rate from provider to provider, always get several quotes before settling on an insurance company.

Discounts for teens and young drivers

Almost every car insurance company offers discounts to drivers, and some even offer discounts specifically for young drivers. Finding a company that offers the right discounts for your driving habits may be the best way to get cheap car insurance.

Multi-car discounts

Most carriers give you a discount when you add multiple vehicles to a single policy. However, the discount likely will not offset the cost of adding an additional vehicle. It may make each vehicle cheaper to insure, but your entire policy will likely be more expensive with two or more vehicles. Buying an additional car just for the multi-car discount is not an effective way to lower your car insurance premium.

Good student discount

Most companies offer discounts for full-time high school and college students who maintain a certain GPA or letter grade average. These discounts can save you hundreds of dollars per year.

*16- and 17-year-olds on their parents’ policy

To qualify for a good student discount, you will typically need to earn a 3.0 GPA or higher, or a B or better letter grade average

Young driver safety training

Many companies offer discounts to students who have taken a driver education class or an approved driver training course. Most courses go over the rules of the road and teach teens and young drivers to drive defensively.

Usage-based rating discounts

Usage-based rating is a relatively new way to reduce your car insurance rate, but more and more insurance companies are offering these types of discounts. Providers that offer the programs require policyholders to use a mobile app or plugin device, which monitors driving habits such as acceleration, braking, speed and trip distance each time they drive. Drivers who maintain good driving habits can earn discounts.

Distant student discount

Many insurance providers offer discounts for students who attend school away from home if they do not take a car with them. During the school term, many students can save on car insurance by using a distant student discount. It can save teens up to 6% on their annual insurance premiums.

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Frequently asked questions

Can I save money if I add my teenager to my auto insurance policy, or should I purchase a standalone policy?

If your teen is 16- or 17-years-old, they must be added to a policy with someone at least 18-years-old. This is because they are still considered minors. Once your child turns 18, they can get their own insurance policy. However, it is typically less expensive to keep teens and young drivers listed on a parents’ or caregivers’ policy until they move out of the household.

What types of discounts do insurers offer young drivers?

Insurance companies know that teens and young drivers are expensive to insure and offer discounts to help offset the cost. The most common ways to reduce your car insurance rates include good student and driver education discounts. Also, consider choosing an insurer that offers a usage-based discount program, which rewards good driving habits with lower rates.

Should I buy my teenager a new or used car?

There are a lot of factors that go into the price of insurance for various car models, including the value of the vehicle, the statistical likelihood that it will be in an accident and the cost of repairs. Generally, an older vehicle is going to be cheaper to insure with a teen driver than a newer vehicle. If you feel comfortable insuring a vehicle with liability only rather than full coverage, meaning that the insurer won’t help pay for damage to the vehicle, that can help keep your insurance cost down.

If my child goes away to college and leaves their car at home, can they get a discount on insurance?

Yes, depending on which company insures the vehicle. Many insurers offer substantial “student away at school” discounts. These discount programs even provide coverage for the student when they return home for weekends and holidays. However, most insurers require a certain amount of distance for a student to qualify for the discount.

Methodology

Bankrate utilizes Quadrant Information Services to analyze 2021 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Rates were determined by adding a 16- or 17-year-old teen to a 40-year-old married couple’s policy. The parent driver rates were calculated 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 coverages that meet each state’s requirements. Our base profile drivers own a 2019 Toyota Camry, commute five days a week and drive 12,000 miles annually.

Rates were determined by adding a 16- or 17-year-old teen to a 40-year-old married couple’s policy. The rates displayed reflect the added cost to the parents’ policy.

About the author

Cate Deventer

Cate Deventer is a writer, editor and insurance professional. She is currently pursuing a Bachelor’s degree in English with a concentration in Professional and Technical Writing from Indiana University East. She has nearly a decade of experience in the insurance industry as a licensed insurance agent.