Teen drivers pose a higher risk than older, more experienced drivers, so the cost of insurance for them is typically higher. Teenage drivers‘ actual vehicle insurance costs vary depending on a number of variables, including whether they are eligible for discounts.
Here is a look at the typical price of teen vehicle insurance and some tips on how to minimize your expenditures.
KEY NOTES
- Because younger drivers pose a larger risk, car insurance for teenagers typically costs more than for older drivers.
- According to Investopedia data, it costs $250 monthly on average to add a 16-year-old to an adult’s coverage.
- The sort of vehicle that the youngster is driving is one of several variables that affect the cost of teen auto insurance.
- The teen’s age, gender, and driving record are other variables that may influence the price of auto insurance for teenagers.
- The cost of the policy will also depend on how much coverage it offers.
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Teen drivers are more expensive to insure since they are inexperienced drivers and have a higher probability of being involved in an accident. The majority of drivers involved in accidents in the US are between the ages of 15 and 19. Auto insurers consequently charge more to cover them.
Average Price of Teen Car Insurance
According to Investopedia’s analysis of six major insurance providers, the average cost to add a 16-year-old newly licensed driver to an adult’s existing auto insurance policy is roughly $250 per month. However, prices might differ significantly between insurers and policyholders.
Tip: When deciding the price of an auto insurance policy, auto insurers take into account a variety of variables, including the driver’s age, gender, and driving record. The cost is also influenced by the types of vehicles covered and the scope of the coverage.
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A Pricing Example with Typical Auto-Added Discounts
Because the insurer considers a number of elements that are unique to each person’s condition, each person will receive a different insurance quote. These hypothetical quotes from May 2023 are based on two scenarios: one with and one without a freshly licensed 16-year-old male driver.
The insurance covers comprehensive coverage with a $500 deductible, collision coverage with a $500 deductible, and liability with limits of $50,000, $100,000, and $50,000. A 2015 Toyota Corolla with 12,000 annual kilometers is the vehicle covered.
When you request rates, many insurers will automatically apply discounts, such as those for a safe vehicle, good grades, a clean driving record, or a history of consistent car insurance coverage.
The quotes in the examples below show pricing with automatically added discounts. Remember that costs may also change depending on your location and other aspects.
No-discount pricing
What happens if you’re ineligible for discounts? Except for Farmers, all of the insurers displayed the amount they subtracted from quotations. The prices of the various auto insurance rates, without any savings, are compared below.
Best 4 Insurance Firms
Based on the sample quotations that Investopedia received, the following four businesses provided the best car insurance rates for an adult and a newly licensed adolescent driver:
1. Progressive
All things considered, Progressive had the cheapest vehicle insurance estimates. They demanded a little down payment at first, then five equal payments, which made up the payment schedule. Most insurance companies provided a substantial down payment followed by six equal payments, or they offered both options.
Progressive provided the best rates both with and without discounts, despite the fact that there was a lengthy list of discounts that were included automatically throughout the estimate process.
2. Geico
The second-lowest non-discounted monthly policy quote came from Geico and was just $10 more expensive than Progressive’s. Get a quote from Geico if you discover that you aren’t eligible for the majority of the savings that insurers are providing. With a lowered price that came in at $333 per month, it wasn’t quite as affordable.
3. Allstate
After applying discounts of $1,281 off the six-month pricing, Allstate provided the second-lowest cost among the discounted estimates, coming in at just $261 per month.
This insurance could be a good fit if you’re adding a kid with good grades who will be driving a car with safety features and both have clean driving records. The non-discounted rate of $474 offered by the insurance company fell roughly in the middle of all the quotes.
4. Farmers
Farmers was one of just a few insurers that identified the kind of discounts that were added but not the amount by which their plans were automatically discounted. (Therefore, comparing Farmers’ non-discounted plans to other non-discounted plans proved challenging.)
Farmers, however, provided the adult who added a teen to their policy with the third-lowest discounted rate. The monthly payment was $320.
Discounts for Teen Drivers
Most auto insurance companies provide a number of discounts that might help you reduce your auto insurance costs, including:
- Bundle discounts: Save money when you buy your auto insurance from the same company as another type of coverage, such as renter’s or homeowner’s insurance.
- Discount for multiple vehicles: Save money by insuring multiple vehicles with the same insurer.
- Save money by driving a car with airbags, anti-lock brakes, anti-theft devices, or other safety features.
- Get a percentage off your insurance when you successfully complete a defensive driving course.
- Member or group discounts: Depending on the organizations you belong to or the company you work for, you may be able to save money.
- Teen drivers might receive a discount if they attend school full-time and do well in school. A 3.0 GPA or better is frequently necessary.
- Discounts for driving tracking programs: Insurance companies might provide a mobile app or plug-in gadget that monitors your teen’s driving and provides savings for safe driving practices and/or less driving overall.
- Good-driver discount: You frequently qualify for a good-driver discount if the drivers on your insurance haven’t recently been involved in any accidents, citations, or claims.
- Discounts for paperless billing: If you agree to get your statements online, insurers may give you a discount.
- Automatic payments: By approving automatic withdrawals of your monthly payments, you may also be able to save money.
- Full payment: If you pay for six-month coverage in advance rather than on a monthly basis, some insurers will give you a discount.
Most vehicle insurance companies will ask you questions as you request estimates and will automatically reduce your quote if you respond. You can also have the choice to add more discounts, according to them. To be sure you aren’t skipping any opportunities for discounts, you can do some research.
Note: The listed reductions aren’t guaranteed and might be subject to additional proof, like transcripts to demonstrate a specific grade point average.
How to Update Your Policy to Cover a Teen Driver
By calling your current auto insurer and requesting it, you can add a teen to your auto insurance coverage. You might need to call customer care to add a driver; alternatively, you might be able to do it online using an account portal. The new driver’s name, license or permit information, date of birth, and driving history details (if any) are typically required.
Online quotes are frequently the best place to start when looking for coverage through a new provider. If you decide that you desire the coverage, you can submit the application and enroll in the new one online, by phone, or in person with a nearby insurance agent.
How to Lower Your Insurance Costs for Teens
The following three strategies will help you save money on adolescent driver insurance:
1. Select a cheap vehicle: The cost of auto insurance varies depending on the car that the driver will be operating, and some vehicles are more expensive to cover than others. For instance, newer, sportier, and convertible automobiles will cost more to insure than older, used economy cars with lower sticker prices.
2. Review your coverage and deductibles. Choosing larger deductibles for collision and comprehensive damage can help you save money. If your kid gets into an accident, just make sure you feel comfortable paying the deductible.
If it makes sense for your overall financial condition and is not required by a lienholder, you might also want to think about reducing the physical damage coverage amounts on older automobiles.
3. Compare prices from different insurers before choosing your coverage; you don’t have to accept what your present insurance is willing to give you. Find the best value on coverage for you and everyone else on your policy by comparing prices from different providers.
Who Offers Teen Drivers the Cheapest Car Insurance?
Investopedia’s analysis of six major insurance providers revealed that Progressive offered the cheapest adolescent driver’s auto insurance. The monthly fee for an adult and a teen who had just received their license was $199 with discounts and $365 without discounts.
When should I include my teen on my car insurance?
Teens will need insurance as soon as they acquire their permits and begin driving because they must have it in order to drive on public roads in your state. If a youngster is involved in an accident, having coverage in place will help you ensure that damages won’t have to be covered entirely out of pocket.
At What Age Is Insurance the Cheapest?
According to Progressive, the cost of auto insurance continues to decrease as you age and accumulate more driving experience, reaching a low for drivers between the ages of 65 and 74. However, the cost may start to rise once you reach the age of 75.
What Age Is the Ideal Age to Begin Insurance?
Due to their higher risk of collision, younger drivers must pay more for auto insurance. Then, rates often decrease as you get older.
For instance, Progressive offers typical rate reductions of 8% for drivers who turn 19 and another 7% for those who turn 21. Progressive’s average rates are almost 45% lower by the time drivers are 30 than they were when they were 18.
What to Do to Save Money on Car Insurance
Avoiding traffic violations and collisions, taking advantage of available discounts, boosting your deductibles, lowering your coverage limits, and shopping around will all help you save money on your auto insurance.
In summary
Your insurance policy will cost more if you include a teen. The actual cost increase will depend on the car they drive, the other vehicles covered by your policy, the teen’s academic performance, the insurer you select, and other elements.
By taking actions that can affect your insurance rates, such as making sure you receive as many discounts as you can and searching around to find the best offer, you can get reduced prices for adding a young driver.
Think about talking to your teen about how much insurance costs. Make sure they are aware of how to reduce insurance costs by practicing good habits like attending class and driving safely.
