Full Coverage Auto Insurance For Teenagers: How Much Does It Cost?

The cost of car insurance for teenagers is significantly higher than for older drivers, due to their lack of driving experience and the increased risk of accidents. The average cost of full coverage car insurance for a 16-year-old is around $5,769 per year, while a 17-year-old pays approximately $5,954. The cheapest option for teens is usually to be added to their parent's policy, which costs around $3,594 per year. Various factors influence the cost of teen car insurance, including age, gender, driving history, type of vehicle, and coverage level. To find the best rates, it is recommended to shop around and seek out discounts for good students and safe driving.

Discounts for teens

There are several discounts available for teens that can help lower the cost of auto insurance. Here are some of the most common ones:

Good Student Discount

Full-time students with good grades, usually a B average or a 3.0 GPA or higher, can qualify for a good student discount. This discount can save up to 25% on auto insurance premiums and may last until the student turns 25. Homeschooled students may also qualify by submitting evidence of taking certain national standardized tests.

Student Away at School Discount

Students who attend college or university away from home and only use the car while they are back home during school vacations and holidays can benefit from this discount. The distance criteria for this discount is usually set at 100 miles or more.

Driver Training or Driver's Education Discount

Many insurance companies offer discounts for teens who complete an approved driver safety course or a basic driver education program. Some insurers even provide their own training programs that teens can complete to save on their premiums.

Defensive Driving Course Discount

Passing a defensive driving course may also help reduce insurance rates. These courses teach students techniques for handling emergencies and stressful driving situations, as well as how to anticipate and react to potential hazards. According to the National Safety Council, young drivers who take defensive driving courses have lower accident rates and, as a result, lower insurance premiums.

Usage-Based Insurance (UBI) Discount

UBI programs use telematics devices or smartphone apps to monitor driving habits such as speed, braking, and mileage. If a teen demonstrates safe driving patterns, they can qualify for significant discounts through UBI programs.

Low-Mileage Discounts

Pay-as-you-drive or pay-per-mile insurance programs can also reduce rates for teens who don't drive frequently. Insurance companies may offer discounts if a telematics device is installed in the vehicle or if the teen is listed as a secondary or occasional driver.

Multi-Vehicle or Multi-Policy Discount

Adding another vehicle to an existing insurance policy or bundling home and auto insurance with the same company can often result in a discount.

Safe Driving Discounts

Some insurance companies offer discounts for maintaining a clean driving record or participating in safe driving programs. These programs may involve tracking driving habits through an app or device, and they encourage teens to follow safe driving practices.

Other Discounts

In addition to the discounts specifically targeted at teens, there are also other unrelated discounts that can be stacked to maximize savings. These include discounts for safety features in the vehicle, anti-theft devices, multiple vehicles, and more.

Adding a teen to a parent's policy

Adding a teenager to a parent's insurance policy can be costly. According to CarInsurance.com, the average cost for adding a teen between the ages of 16 and 19 to a parent's policy is $3,594 annually. This can increase the rate from 65% to 135%. However, it is still cheaper to add a teen to a parent's policy than for them to have their own policy.

There are several factors that influence the cost of adding a teen to a parent's insurance policy. Firstly, the age of the teenager plays a significant role. The younger the driver, the more expensive the insurance. For example, the average car insurance rate for a 16-year-old is $7,149 per year, while it drops to $5,954 for a 17-year-old and $5,249 for an 18-year-old.

Secondly, the gender of the teenager also impacts the cost, with male teen drivers typically costing more to insure than female drivers. This is because male teen drivers are statistically more likely to be involved in accidents.

Additionally, the state of residence affects the cost, as insurance rates vary by state and local laws. Some states, such as California, prohibit the use of gender in car insurance ratings, while other states have specific requirements for insuring teen drivers.

When adding a teen to a parent's insurance policy, it is important to shop around and compare rates from different insurance companies. It is also crucial to ask about available discounts, such as good student discounts, defensive driving discounts, and student-away discounts.

Furthermore, the choice of vehicle can impact the cost. Selecting a car with high safety ratings and low horsepower can help reduce insurance rates. Older vehicles that can be insured with only liability insurance can also cut costs.

It is worth noting that while adding a teen to a parent's insurance policy can be expensive, it is a legal requirement to ensure the teen driver is properly insured. Failing to do so can result in serious consequences, including the insurance company denying coverage in the event of an accident.

Cheapest car insurance companies for teens

Car insurance for teens is notoriously expensive, with teens paying, on average, $445 per month ($5,340 per year) for car insurance. This is because teens are considered to be high-risk drivers due to their inexperience, tendency for critical errors, distracted driving, and speeding. However, there are some car insurance companies that offer cheaper rates for teens. Here are some of the cheapest car insurance companies for teens:

USAA

USAA is a great option for teens, especially those from military families. It offers the cheapest average car insurance rate for 16-19-year-olds at $320/month. USAA also has excellent ratings from J.D. Power for customer and claims satisfaction, financial stability, and low customer complaint rates. However, it is only available to military members, veterans, and their families.

Erie Insurance

Erie Insurance is another good choice for teens, with an average monthly rate of $211. It offers a telematics app called YourTurn that helps decrease dangerous driving behaviour and phone distractions. Erie Insurance is highly rated by parents of teens for claims satisfaction. However, it is only available in 12 states and has a history of mobile app issues.

State Farm

State Farm is a widely available and highly rated insurance company that offers competitive rates for teens. It has a nationwide presence and consistently ranks high in customer satisfaction surveys. State Farm also offers good student and safe driving discounts.

Travelers and Geico

Both Travelers and Geico offer some of the cheapest car insurance rates for teens, with Travelers being the cheapest on average. They are good options for parents looking to shop around and find the best rates for their teen drivers.

Auto-Owners

Auto-Owners Insurance is another company to consider, with an average annual rate of $3,842 and an A++ AM Best rating.

Average car insurance cost by state for teens

The cost of car insurance for teens varies depending on the state, age, gender, and other factors. Here is an overview of the average car insurance cost by state for teenagers:

Connecticut, Louisiana, Nevada, and New York

These states are among the most expensive for teen car insurance. The annual full-coverage rates for young drivers in these states are as follows:

• 16-year-old: $6,226
• 17-year-old: $5,989
• 18-year-old: $5,669
• 19-year-old: $5,192
• 21-year-old: $3,710

Nevada, New Jersey, and New York

The aforementioned states are also among the most expensive for teens with minimum coverage insurance. The annual rates for this group are:

• 16-year-old: $3,141
• 17-year-old: $2,910
• 18-year-old: $2,716
• 19-year-old: $2,554
• 21-year-old: $2,015

Average Costs Across the United States

On average, teens pay around $445 per month or $5,340 per year for car insurance. The cost varies depending on factors such as age, gender, location, driving history, and vehicle type. Male drivers tend to pay more than female drivers, and rates decrease as drivers age and gain more experience.

Cheapest Options

According to sources, the cheapest car insurance options for teens are offered by USAA, Erie, State Farm, and Travelers. The average annual rates for these companies are as follows:

• USAA: $320/month
• Erie: $211/month
• State Farm: $394/month
• Travelers: $4,834/year

Strategies for Finding Cheaper Rates

• Shop around and compare rates from different insurance companies.
• Seek out discounts for good grades, driver education courses, and safe driving habits.
• Add a teen to a parent's existing policy, as it is usually cheaper than a separate policy.
• Choose a car with high safety ratings and low horsepower.
• Raise your deductible, but consider the likelihood of accidents with young drivers.

How to get the cheapest insurance for teens

Shop Around

The cost of car insurance for teens can vary depending on the insurance company, so it's important to compare quotes from multiple providers. Some companies, such as Travelers and Geico, are known for offering cheaper rates for teens. USAA also offers affordable rates, but eligibility is limited to military members, veterans, and their families.

Seek Out Discounts

Many insurance companies offer discounts for teens who maintain good grades (usually a "B" average or above) and those who complete driver education or defensive driving courses. Safe driving habits, monitored through telematics apps, can also lead to discounts.

Add Your Teen to Your Policy

Adding your teen to your existing insurance policy is typically much cheaper than them purchasing their own insurance. Having their name listed alongside yours reduces the risk in the eyes of insurers. This option is usually required if your teen lives with you and could potentially drive your vehicle.

Choose the Right Car

Insurers consider the make and model of the vehicle when setting insurance rates. Opting for a car with high safety ratings, such as used versions of the Ford C-Max Hybrid or Mazda 3, can help lower insurance costs.

Raise Your Deductible

Increasing your deductible can reduce your insurance premium. However, this should be weighed against the higher likelihood of young drivers being involved in accidents. You will need to pay the deductible amount in the event of an at-fault accident.

Delay Getting a License

While this may not be a popular option for eager teens, delaying getting a license can result in lower insurance costs. The risk of accidents is highest for 16-year-olds, and insurance rates drop significantly by age 20.

Additional Tips:

• Good Student Discount: Maintaining a GPA of 3.0 or higher can lead to significant savings, with an average discount of $283.
• Defensive Driving/Safe Driving Discount: Taking a professional driving course can make your teen a safer driver and also reduce their insurance premium.
• Student Away from Home Discount: If your teen is away at college, you may qualify for this discount, which averages 18%.
• Low-Mileage Discounts: Pay-as-you-drive or pay-per-mile insurance can reduce rates for teens or families who don't drive frequently.
• Unrelated Discounts: Review discounts unrelated to teens, such as multiple vehicle discounts or home and auto bundle discounts.

While insurance for teens can be expensive, following these tips can help you find the cheapest rates and reduce the financial burden.

Frequently asked questions