Teenage Drivers: Best Auto Insurance Options

Teenage drivers are considered high-risk by insurance companies due to their lack of driving experience, which results in higher insurance premiums. On average, teens pay $445 per month or $5,340 per year for car insurance. The best way to save money on car insurance for teens is to add them to their parents' existing policy, which can reduce the cost by half.

When looking for the best auto insurance for teenage drivers, it is important to compare quotes from multiple companies, as rates can vary significantly. Some companies that offer cheap car insurance for teens include USAA, Erie, State Farm, Travelers, Progressive, and Liberty Mutual.

To further reduce the cost of car insurance for teens, look for companies that offer discounts such as good student discounts, safe driving discounts, and multi-car discounts. Additionally, choosing a safe and moderately priced car can also help lower insurance premiums.

Liability Insurance for Young Drivers

Liability insurance is a type of insurance that covers the costs of damages to other people or their property. It is important for young drivers to have liability insurance in case they are involved in an accident. The minimum level of liability coverage varies from state to state and it is one of the most important types of insurance for new drivers to have.

Bodily injury liability insurance covers lost wages, medical bills, and other expenses for someone who is injured when the policyholder is at fault for an accident. Property damage liability insurance covers damage to someone else's property, such as a vehicle, when the policyholder is at fault for an accident. For example, motorists in North Carolina are required to have a policy that would pay up to $30,000 per person for bodily injury, $60,000 per accident for bodily injury, and $25,000 per accident for property damage.

Liability-only coverage is the cheapest option for young drivers if they are driving a car that is paid off. However, if they have an auto loan, even with a cosigner, the lender will require the car to have full coverage, including comprehensive and collision insurance.

Adding a teen driver to an existing policy is typically cheaper than purchasing a separate policy for them. This is because the young driver benefits from the lower rate that the policyholder has earned as a more experienced driver. Additionally, young drivers may be eligible for discounts if they are a good student, are away at school, or have completed a driver's education course.

Collision Auto Insurance

Collision coverage will reimburse you for damage to your car and provide a payout up to the actual cash value (ACV) of the vehicle if it is deemed a total loss. It is important to note that collision insurance does not cover damage in non-moving situations.

• Colliding with another vehicle
• Hitting a road hazard, such as a pothole

When it comes to insuring teenage drivers, collision coverage is typically included as part of full coverage. Full coverage for teenage drivers can be quite expensive, often costing twice as much as insurance for older drivers. To save money on collision coverage for teenage drivers, consider the following:

• Adding your teenager to your existing policy: It is usually more affordable to add a teenager to your policy than to purchase a separate policy for them.
• Taking advantage of discounts: Many insurance companies offer discounts for teenage drivers who maintain good grades, complete driver training programs, or drive infrequently.
• Choosing the right vehicle: Sports cars and luxury vehicles can be expensive to insure. Opting for a car with good safety ratings and lower repair costs can help reduce insurance costs.
• Increasing deductibles: Raising your deductible can lower your insurance premium, but keep in mind that you will need to pay more out of pocket if your teenage driver is involved in an accident.

Comprehensive Car Insurance

Comprehensive insurance is particularly relevant for teenage drivers, who are more likely to be involved in accidents and require additional financial protection. While it is not a legal requirement in all states, lenders will typically require comprehensive coverage for financed vehicles.

The cost of comprehensive insurance for teens varies depending on factors such as age, gender, location, vehicle type, and driving history. On average, teens pay around $445 per month or $5,340 per year for car insurance, with rates decreasing as teens get older and gain more driving experience.

To save money on comprehensive insurance for teenage drivers, consider the following:

• Good student discounts: Many insurance companies offer discounts for students with good grades (usually a B average or above).
• Defensive driver/safe driving discounts: Taking a professional driving course can result in lower premiums.
• Choosing a safe and moderately priced car: Opting for a vehicle with high safety ratings and lower repair costs can reduce insurance rates.
• Keeping your teen on your insurance policy: Adding your teen to your existing policy is typically more affordable than a separate policy.
• Increasing liability limits: This can provide additional financial protection in the event of an accident.
• Enrolling in a telematics program: These programs monitor driving habits and can lead to lower insurance rates over time.

Good Student Discounts

Several car insurance companies offer good student discounts, including:

• Liberty Mutual
• State Farm
• Geico
• Travelers
• USAA
• Mercury
• Progressive
• The Hartford
• AAA
• Esurance
• American Family
• Nationwide
• Auto-Owners Insurance

In addition to good student discounts, many of these companies offer other discounts for teen drivers, such as driver training discounts, distant student discounts, and usage-based insurance programs.

It's important to note that eligibility requirements and discount amounts may vary between providers and states. It's always a good idea to shop around and compare quotes from multiple companies to find the best rates and discounts for teen drivers.

Accident Forgiveness

GEICO, for example, offers Accident Forgiveness as a reward for qualifying drivers who have been accident-free for five years or more. This may not apply to drivers under 21 years of age. With Accident Forgiveness, your insurance rate won't increase as a result of your first at-fault accident.

Progressive also provides accident forgiveness benefits as part of your auto policy for certain accidents in most states. They offer three types of accident forgiveness: Small Accident Forgiveness, Large Accident Forgiveness, and Progressive Accident Forgiveness. Small Accident Forgiveness is automatically included for new customers in most states, and your insurance rate stays the same for your first claim that's less than or equal to $500. Large Accident Forgiveness is available to customers in most states who have stayed with Progressive for at least five years and have remained accident and violation-free for up to five consecutive years. With this, your rates won't increase even if the total claim exceeds $500. Progressive Accident Forgiveness can be purchased when you buy or renew your auto policy, and you may have one eligible accident forgiven per policy period.

Frequently asked questions