Auto Insurance For Teenagers: Understanding The Average Costs

Teenage drivers pay a high price for car insurance, with rates more than double those of 35-year-olds. The average cost of car insurance for teens in the US is $5,769 per year, or $481 per month. This is based on rates for 16 to 19-year-olds. The cost varies depending on the age and gender of the driver, the state they live in, and whether they are added to a parent's policy or have their own.

Average cost of auto insurance for teenagers

The cost of car insurance for teenagers varies depending on several factors, including age, gender, location, and the insurance company. Here is an overview of the average costs and some factors that can influence the price of auto insurance for teenagers.

Average Costs for Teenagers on Their Parents' Policy

On average, it costs $278 per month to add a teenager to a parent's car insurance policy. This amount can vary depending on the insurance company and the state. For example, Nationwide offers the cheapest rates for parents adding a teen to their policy, with an average cost of $364 per month. State Farm and American Family are also known for having competitive rates for similar situations.

Average Costs for Teenagers with Their Own Policy

When teenagers obtain their own car insurance policy, the average cost is significantly higher. The average cost of car insurance for a teen driver with their own policy is $532 per month. This price varies by insurance company and location. State Farm offers the cheapest rates for teens with their own policies, charging an average of $379 per month.

Factors Affecting the Cost of Auto Insurance for Teenagers

The cost of auto insurance for teenagers can be influenced by various factors:

• Age: Younger teens tend to pay more for car insurance. For example, 16-year-olds pay an average of 85% more than 19-year-olds.
• Gender: In most states, female teens pay less for car insurance than male teens due to lower crash rates.
• Location: The cost of auto insurance varies by state due to differences in insurance requirements, crash rates, and the cost of medical treatment and car repairs. For example, the average cost of car insurance for teen drivers ranges from $126 per month in Hawaii to $884 per month in Connecticut.
• Driving History: Teens with a history of accidents or moving violations may have higher insurance rates.
• Vehicle Type: The make and model of the vehicle can impact the insurance rate due to factors such as safety features, repair costs, and crash statistics.
• Insurance Company: Different insurance companies offer varying rates for teen drivers, so it is essential to shop around and compare quotes.

Cheapest auto insurance companies for teenagers

The cost of car insurance for teenagers vary depending on age, gender, location, and the type of coverage purchased. Here are some of the cheapest auto insurance companies for teenagers:

USAA

USAA offers the cheapest rates overall for teenagers, but it is only available to current and former military members and their families. USAA also provides excellent coverage, including accident forgiveness and new car replacement.

Erie

Erie has the highest grade from CRASH Network, reflecting its efficient claims process, quality of repairs, payment process, and customer satisfaction. Erie also has the lowest rates for teens on their own policies and the second-lowest rates for parents adding teens to their policies.

Nationwide

Nationwide has the best rates for parents adding a teen driver to their policy. It also offers usage-based insurance, accident forgiveness, and gap insurance.

State Farm

State Farm has the cheapest rates for teens who are getting their own insurance policies. It is also the largest auto insurance company in the United States, making it widely available. State Farm offers various specialty coverage types and discounts for teens.

Travelers

Travelers has the cheapest rates for teen drivers, especially for female teens. They also offer a variety of discounts, including good student, driver training, and student-away-at-school discounts.

Geico

Geico is one of the cheapest options for teenage drivers due to its competitive rates and generous discounts. They also have great ratings from customers and editors.

American Family

American Family offers the third-best rates for parents adding a teen to their policy. They also provide unique ways to save, such as discounts for teens who volunteer for non-profit organizations.

Grange

Grange Insurance has very good rates for teen drivers and is available in 13 states. They offer various types of auto insurance, including mandatory coverage and add-ons like new car replacement insurance and pet injury coverage.

Mercury

Mercury is a great choice for teens in the 11 states where it operates, offering competitive base premiums. While they don't have as many discounts as other insurers, Mercury specializes in standard auto insurance.

Progressive

Progressive offers low prices, attractive discounts, and varied coverage options. They provide a teen driver discount for parents who add drivers under 18 to their policies.

Cost of auto insurance for teenagers on their parents' policy

The cost of auto insurance for teenagers is high due to their increased risk of accidents. While it is possible for teens to get their own insurance policy, it is usually more expensive and requires a parent or guardian's co-signature. Hence, most teens are added to their parents' insurance policy.

The average cost of adding a teen to a parent's insurance policy is $278 per month, according to QuoteWizard. This amount can nearly double the rate that a two-parent household pays for car insurance. However, it is still 48% cheaper than having a teen get their own policy, which costs an average of $532 per month.

The cost of adding a teenager to a parent's insurance policy varies depending on the insurance company and the state. For example, Nationwide has the cheapest rates for parents adding a teen to their policy, while State Farm and American Family have the lowest rates for teens getting their own insurance.

The age and gender of the teenager also impact the cost. Younger teens typically pay more for insurance, with 16-year-olds paying an average of 85% more than 19-year-olds. Additionally, female teens have lower crash rates and pay less for insurance than male teens.

Parents can also take advantage of discounts offered by insurance companies to reduce the cost of adding a teen to their policy. These include good student discounts, student-away-from-home discounts, multi-vehicle discounts, and family plan discounts.

Overall, while the cost of auto insurance for teenagers on their parents' policy can be significant, there are ways to mitigate the expense by comparing insurance companies and taking advantage of available discounts.

Cost of auto insurance for teenagers on their own policy

The cost of auto insurance for teenagers on their own policy can be expensive, with the average cost of car insurance for a teenager being $215 per month for an individual policy. The cost varies depending on the age and gender of the teenager, with younger teens typically paying more for car insurance coverage. For example, 16-year-old drivers pay an average of 85% more than 19-year-olds, and teenage boys pay around 10% more than girls.

The average cost of car insurance for a 16-year-old is $813 per month for full coverage, while the average cost for a 17-year-old is $5,954 annually. The cost of insuring a teen between the ages of 16 and 19 on their own policy is $468 per month.

The reason that auto insurance for teenagers is so expensive is that they are considered high-risk drivers due to their lack of driving experience. Teen drivers are nearly three times as likely to be involved in a fatal car accident as drivers over the age of 20, and drivers aged 16 to 19 have the highest rate of accidents among any age group in the United States. As a result, insurance companies charge more to cover them.

However, there are ways to reduce the cost of auto insurance for teenagers. One way is to add them to an existing policy, such as a parent's insurance policy, rather than having them purchase their own policy. This can result in significant savings, as the cost of adding a teen to a parent's policy is still cheaper than the cost of a separate policy. For example, a 16-year-old male could reduce his rates by 45% by joining his parents' car insurance policy.

Another way to save on auto insurance for teenagers is to look for discounts specifically offered to young drivers. Many insurance companies offer good student discounts, where full-time high school or college students with a certain GPA (usually a "B"/3.0 or above) can get a reduction in their rates. Some companies also offer discounts for teens who complete an approved driver education course or a defensive driving course.

Additionally, insurance companies may offer discounts for safe driving habits. They may provide a telematics driving tracker, which monitors driving behaviour and rewards safe driving with a discount.

It is also worth shopping around and comparing quotes from multiple insurance companies, as rates can vary significantly between insurers. For example, Progressive, Travelers, and Geico are known for offering cheap car insurance for teens.

Finally, the type of car a teenager drives can impact the cost of insurance. Safe cars with advanced safety features and average horsepower engines, such as the Mazda 3 and Subaru Legacy, can help reduce insurance rates. On the other hand, sports cars and large SUVs tend to be more expensive to insure.

Discounts for teenagers

Adding a teenager to your car insurance policy can be expensive, but there are several discounts that can help you save on the costs. Here are some of the common discounts offered by car insurance providers for teenagers:

Good Student Discount:

This is one of the most widely available discounts for teenage drivers. Insurance companies often offer a discount for teen drivers who are full-time students and maintain good grades, usually requiring a GPA of 3.0 or higher. The good student discount can help you save a significant amount on your insurance premiums, with average savings ranging from 8% to 20%. Some insurance companies may also require you to provide transcripts periodically to prove that your teenager is maintaining the required grades.

Defensive Driving/Safe Driving Discount:

Insurance providers often encourage young drivers to take professional driving courses or participate in safe driving programs. By completing a defensive driving course, your teenager can not only become a safer driver but also help you save on insurance costs. Insurance companies view young drivers who have undergone professional training as less risky, and therefore offer discounted rates. Be sure to check with your insurance provider about the specific requirements for this discount.

Multi-Vehicle Discount:

If you have multiple vehicles insured with the same insurance company, you may be eligible for a multi-vehicle discount. This discount is often applicable when adding a teenager to your existing policy. By insuring all your vehicles through the same insurer, you can benefit from reduced rates for each vehicle, including the one driven by your teenager.

Safety Discount:

Insurance providers may offer discounts for vehicles equipped with various safety features and equipment. These include anti-theft devices, anti-lock brakes, airbags, and other advanced safety technologies. When choosing a vehicle for your teenager, consider opting for one with robust safety features, as it can help lower your insurance costs while also providing added protection for your young driver.

Student-Away Discount:

If your teenager goes away to college or university and leaves their car at home, you may be eligible for a student-away discount. This discount is typically offered when the student attends school at least 100 miles away from their permanent residence. The amount of the discount can vary, ranging from 5% to 35% depending on the insurance provider.

Driving Tracking Program Discounts:

Some insurance companies offer mobile apps or plug-in devices that track your teenager's driving habits and offer discounts for safe driving practices. These programs not only provide accountability for your teenager but also help you save on insurance costs. By enrolling in these driving tracking programs, you can benefit from reduced rates over time as your teenager demonstrates safe and responsible driving.

Family Plan Discounts:

Adding your teenager to your existing insurance policy can often result in lower rates compared to them having their own separate policy. Insurance companies may offer family plan discounts when parents have an existing policy, recognizing the reduced risk associated with having multiple drivers on the same plan.

When exploring insurance options for your teenager, be sure to ask about the specific discounts offered by each insurance provider. By taking advantage of these discounts and comparing rates, you can help keep the costs of insuring your teenage driver more manageable.

Frequently asked questions