Car insurance for teens

Becoming a licensed driver can seem overwhelming. Buying a car and getting it insured is a lot of responsibility. If you’re over 18, a licensed driver and have the funds available to purchase a vehicle (and insurance coverage), you’re definitely free and clear to do so. But if you’re a younger teen, just having a license and the cash isn’t enough. In most states, minors aren’t allowed to own property on their own, and you must recruit a parent (or other trusted adult) to co-sign your purchase. When in doubt, consult your state’s DMV.

Adding a young driver to a family car insurance policy is cheaper than purchasing insurance on your own: you will likely pay 20 percent more than the increase to your family’s premiums would be by having your own separate plan.

The good news is that if you do need to strike out on your own and pay out for your own insurance policy, the difference in premiums will become lower year by year as you grow into an older and more experienced driver.

Until then, here are the best options for teen and college student drivers:

01 Best Overall: Erie Insurance
Erie Insurance
•••
If you live in Illinois, Indiana, Maryland, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, or Wisconsin, you should definitely call an Erie agent. It is easily one of the most affordable companies for teen and college-aged drivers. They offer discounts of up to 20 percent for drivers who live at home and are under 21, for each year they spend under the same policy, for taking a driving class, and even for participating in their competitive program that offers prizes to students who are the most engaged with safe driving. Neat, huh?

Erie Insurance is well-known for its competitive price and excellent claims service. They are rated A+ by A.M. Best, which is considered an Excellent rating. A.M. Best ratings are in relation to the financial stability of the carrier and the likelihood of your claim getting paid.

02 Runner-Up, Best Overall: American Family Insurance
American Family Insurance
•••
This reputable company has a free Teen Safe Driver program that can provide up to 10 percent discounts off of premiums after the driver completes either 3,000 driving hours or one year using the app, which tracks driving behavior and provides feedback. If you share a vehicle with your teen driver, don’t worry – you can remove trips from the log if someone else was the driver.

Consider driving a slightly older vehicle. Premiums are often lower for older vehicles – and certainly are lower than they are on the latest model of sports car. But given that the crash rate for teen drivers is almost twice that of other adult drivers, don’t skimp on safety: really old cars can sometimes lack the safety features that are essential to protect new drivers on the road in the event of an accident. At the minimum, make sure the vehicle has working airbags and a recent safety inspection from a reputable mechanic.

03 Best Good Student Discount: State Farm Insurance
State Farm
•••
State Farm comes with competitive premiums and is a great option for those who live outside of major metro areas and states not covered by smaller insurance carriers. They also have a sweet discount of 25 percent for good grades until the age of 25 and are known for their awesome customer service.

State Farm is the largest insurance company in the U.S. since they insure more cars and homes than any other carrier. In some states, State Farm offers a Steer Clear and Drive Safe & Save programs that offer discounts based on driving habits while helping young drivers learn to drive safely. Check with an agent in your area to see if these options are available.

State Farm Agents are highly trained professionals who are prepared to cover everything you own in one place. They are great for the whole family to have their insurance with one insurance company.

04 Best Direct Insurance Company: Geico Insurance
Geico Insurance
•••
Geico is also available in 50 states and even gives a discount for using your seatbelts, as well as for ensuring your vehicle has safety features such as anti-lock brakes, airbags and anti-theft protection. They also offer a Family Pricing Program that gives a lower rate to teens who stay on their parent’s insurance policies and later switch to their own Geico plan. If you drive between home and college often, you might want to spring for the company’s mechanical breakdown coverage, which covers the cost of repairs you need because of normal wear and tear rather than just serious accidents.

Geico is bought and sold directly online, which means you will not be going into an agent’s office. Direct insurance is not new and is continuously growing in popularity. You can speak with a licensed agent with a simple phone call. Some look at it as skipping the middleman with a little extra savings in your pocket.

It does help to have some familiarity with car insurance before buying it online. If you ever feel unsure of how your policy works, make sure to get answers from a trusted source.

05 Best Policy Perks: Nationwide Insurance
Nationwide
•••
Like the others on this list, Nationwide offers a good student discount. But it also offers accident forgiveness even for teen drivers, ensuring rates won’t increase even more after the first at-fault accident. They also offer 24/7 roadside assistance. If you’re willing to have your driving monitored at all times, their SmartRide program can qualify you for some steep discounts after a year of use. You can also combine discounts on a family plan, so if your parents qualify for a discount for being accident-free, you will, too.

Take driver’s ed, even if it’s not mandatory – and even if it doesn’t lower your premiums. It will still reduce your chances of causing a costly and premium-raising accident, so it will very likely save you money and pain in the long run.

06 Best for a Student Driver on Their Own: Progressive Insurance
Progressive Insurance
•••
With Progressive’s multi-car discount, you can offset the cost of insuring a teen or young person by getting a lower rate for covering many vehicles under the same policy. But, that is not always an option. If you are buying a policy on your own as a young driver, Progressive will take care of you.

Progressive’s website is rated as one of the best overall. Comparison shopping is made easy with their comparison tool. Remember, it’s always a good idea to shop around for insurance, ask about discounts, and never take the first offer. Whatever policy you eventually choose, just remember that you won’t be paying high-prices forever!

07 Best When Away At College: Allstate
Allstate
•••
Unmarried students under the age of 25 can get major savings if they are enrolled full-time and getting good grades, attend school at least 100 miles away from home (and their car) or complete a teenSmart driver’s ed program.

Allstate provides local agents to walk you through the insurance process. Always ask about discounts. Safe driver discounts, good grade discounts, discounts for installing a safe driving app…the list is limitless, and it always pays to talk to your insurance agent.

If you’re going off to school but your car won’t be coming along for the journey, you should ask your family insurance agent about a lower premium. If you’re not driving the vehicle year-round, then there’s no reason you should have to pay top dollar for year-round coverage. But definitely don’t just cancel your policy – you want to make sure that if your vehicle is stolen or damaged by an act of nature (or vandals) that you are covered.

08 Best Insurance for Newly Enlisted Military: USAA
USAA
•••
If you join the military right after high school or college graduation and need car insurance, you’re in luck, because USAA offers great policies that are only available to military members, veterans and their families. They often have the best customer service and price ratings in the industry.

Expect to find coverage for all of your insurance needs. Car insurance, motorcycle, boat, renters and even homeowners insurance are all available. USAA does not provide local agents but you will be able to reach a representative 24 hours per day, seven days a week.

USAA understands military life. They know moving often is part of the deal. They know your home state might be different than the state you currently reside. So look no further than USAA.
When it comes to teen drivers and car insurance, things get confusing — and expensive — very quickly. A parent adding a male teen to their policy can expect their new rate to run as high as $6,186, and in some cases 227% higher than insuring an adult driver alone, and a teen buying their own policy can be even more expensive. Let us guide you through this decision — discounts, options, special circumstances — so you find the best teen car insurance.

Even though the right answer is usually to add them onto your policy to mitigate some of the cost, there are other options and discounts that can save you money. We did as much of the legwork as possible for you, hunting down discounts and reading the fine print. In the end, you’ll need to compare auto insurance quotes using our quote comparison tool to see which company is best for you.

To start at the beginning, simply scroll down. You can also jump directly to your unique situation:

Adding a teenager to your car insurance policy
Teen buying their own policy
How much is car insurance for teens
Discounts for teen drivers
Other sections:

Car insurance for college students
Learner’s permit insurance
Opt for no coverage savings option
Cheat sheet for Adding a teen and Teen policy

Getting Started: An Easy Primer
Know your timing. Chances are excellent your existing car insurance company will contact you proactively. How do they know? Easy — they probably asked you for the names and birthdays of all the children in your home when you first signed up for your policy. So, if your teenager is 16 or 17 now, they know all about it. If you don’t get the call, it makes sense to alert your carrier once your teen gets a learner’s permit to talk through your options and to give yourself time to compare car insurance companies. In general, permitted drivers are automatically covered as a part of the parent or guardian’s policy with no action needed on your part, but when they do have a true driver’s license, even provisional, they will need to be on your policy or get their own.
Get ready to compare quotes. Our research shows that insurance companies all across the U.S. (except Hawaii) use age and experience as a rating factor. It’s a fascinating point of difference. In our studies, adding a teen raises your costs anywhere from 100% to more than 200%. However, the rates insurance companies will charge you for adding a teen varies widely, as show in the California Adding A Teen To Your Policy table below. Also,
Understand available discounts. When you add a teenager to your car insurance policy or they get their own, car insurance companies don’t actively communicate what discounts are available to you. Use our discount guide below so you’re not in the dark.
All 50 states and the District of Columbia now have a Graduated Driver’s License (GDL) system, according to the Insurance Institute for Highway Safety (IIHS). GDL programs save lives. A study by the IIHS found states with stronger graduated licensing programs had a 30% lower fatal crash rate for 15- to 17-year olds.

Adding a teenager to your car insurance policy
Adding a teen to your policy is the cheapest way to get your teen insured. It still comes with quite a hefty cost, but you can certainly save if you choose the best car insurance companies for teens. We can help.

How much will adding a teen to my car insurance cost me?
Let’s get down to numbers. Every situation is different, but to get a solid snapshot we compared rates in 10 zip codes in each state. The family profile we used owned a 2014 Honda Accord driven by a 40-year old man buying full coverage. Then we added a 16-year old teen to the policy. Here’s what happened:

The average household’s car insurance bill rose 152%.
A teenage boy was more expensive. The average bill rose 176%, compared with 129% for teenage girls.
California rates rose the most, more than 200%.
The reason behind the hikes: Teens crash at a much higher rate than older drivers — the risk is four times as much. According to the federal Centers for Disease Control and Prevention, the worst age for accidents is 16. They have a crash rate twice as high as drivers that are 18- and 19- years old.

Costs also vary widely by insurance company, which is the reason we suggest shopping for car insurance. It’s easy to switch car insurance companies, and we’ll provide you the guidance to switch, cancel, and save.

California Adding A Teen To Your Policy Rates by Company
The table shows how much your annual rates will increase when you add a 16-year-old teen.

Company Female Male Average Get a free quote online
Geico $1,632 $1,758 $1,695 Get an online quote from Geico
State Farm $1,394 $2,462 $1,928 Get an online quote from State Farm
Nationwide $2,486 $3,228 $2,857 Get an online quote from Nationwide
Progressive $2,733 $4,223 $3,478 Get an online quote from Progressive
Allstate $3,004 $4,112 $3,558 Get an online quote from Allstate
Farmers $5,024 $9,248 $7,136 Get an online quote from Farmers
Average $2,712 $4,172 $3,442
Methodology

If you’ve seen enough and are ready to start comparing quotes for teens, dive into our quote comparison tool and see free online quotes from multiple companies within 10 minutes. Start Now

How to add a teen to your policy
If your choosing a new car insurance company after shopping, you should have already added the teen to the policy when first signing up. If you want to add a teen to your current or new policy, follow these steps:

A quote about car insurance and teens

Call your car insurance company, if they have not already contacted you.
Talk through the changes to your policy in detail, minimum and maximum coverage and insist on hearing the ins and outs of each and every discount. These can add up to considerable savings. If you are also adding an additional car, be sure to ask about a multi-car discount.
Have ready your teen’s driver’s license information and information about any new vehicles.
Take the time you need to decide. Just make sure your teen isn’t driving on a full license without being formally added to your policy or their own. That would be risky.
If my teen gets a ticket, will it raise my rates?

Yes. Once together on the same policy, all driving records — including your teen’s — affect premiums, for better or worse. You share in the discounts, and you shall also share in the risk. To understand how a moving violation will affect your rates, we ran a study and found that the additional cost could run from 5% to as high as 20%.

Teen buying their own policy
Can a teen buy their own insurance? Yes. Companies will sell directly to teens, but state laws vary when it comes to a teen’s ability to sign for insurance — meaning a parent may have to co-sign — and it’s rarely cheaper. In fact, your teen will likely have a higher premium compared to adding a teen to a parent or guardian policy.

But, there are cases where it might make sense for a teen to have their own policy. Progressive cites two:

You have a luxury sports car. On a single plan, all drivers, including the teen, are insured against all cars.
The teen is eager to be financially independent.
Car insurance is different for a first-time car insurance buyer, but it’s a great time to start a relationship with an insurance provider.

How much is car insurance for teens?
Like we’ve said, teen car insurance is expensive. The younger the driver, the more expensive the car insurance. Young drivers are far more likely to get into car accidents than older drivers. The risk is highest with 16-year-olds, who have a crash rate twice as high as 18- and 19-year-olds. That risk is reflected in the average car insurance rates for teenagers (multiple ages shown for easy comparison):

16-year-old — $3,989
17-year-old — $3,522
18-year-old — $3,148
19-year-old — $2,178
20-year-old — $1,945
Rates not only depend on age, but the company you choose. This table shows the annual rate a teen will receive in California.

Company Female Male Average
Company 1 $2,646 $2,961 $2,804
Company 2 $2,607 $3,472 $3,040
Company 3 $5,613 $8,966 $7,290
Company 4 $2,640 $3,080 $2,860
Company 5 $2,642 $3,454 $3,048
Company 6 $2,030 $2,064 $2,047
Average $3,030 $3,999 $3,515
Note: the specific company names were not mentioned next to the rates but the companies we’re showing rates for are, in no particular order: GEICO, Farmers, State Farm, Progressive, Mercury, and AAA.

You’ll notice that companies offer widely different rates. Use our quote comparison tool to receive side-by-side quotes from top insurance carriers in only 10 minutes. Get Started

Discounts for teen drivers
We’ve identified the best discounts for teen drivers to get affordable car insurance, nine to be exact. Most car insurance companies won’t reach out to you with discounts, so you must be proactive. Ask and ask again, insisting on as many discounts as you possibly qualify. Discounts can only be stacked up to a certain point though.

Good student discount. A popular discount is tied to doing well in school. This usually translates as a «B» average (3.0 grade point average) or higher. Age limits do exist; typically, the student must be under the age of 25. How much will you save? A recent study by Consumer Reports good student discount averages $263 a year. Liberty Mutual says its Good Student Discount could mean anywhere from 15% to 35% off. Data collected for Insurance.com by Quadrant Information Services shows that the nationwide good student discount is around 12%.
Defensive driving discount. You can take extra driver education or a defensive driving course. This means go above and beyond the minimum state-mandated drivers’ education and training. In some states, discounts can run from 10% to 15% for taking a state-approved driver improvement class. Online classes are a convenient option, but check with your carrier first to make sure it will lead to a discount.
Student «away» discount. Most car insurance companies offer a student «away» discount for students who are away at college or living away from home during high school. You could receive a discount around 5% to 10% of the student’s premium, but some insurers advertise up the 30% off.
Raise your deductible. A common way to lower car insurance premiums is to raise your deductible, but weigh against the fact that young drivers are more likely to get into accidents. When you get into an at-fault accident, you have to pay the deductible amount. Increasing your deductible from $500 to $1,000 will reduce your annual premium by by approximately $400. You can also drop comprehensive and collision coverage if the car is not finance. Use our auto insurance coverage calculator to find out what coverage people «like you» have.
Skip the red Mustang. Car insurance rates vary widely by type of car. A car with a high safety rating will be cheaper to insure. Use Insure.com’s list of 2017 car models to find the cheapest cars to insure. This mostly has to do with the cost of the car, how easy it is to repair, and claim records. Jeeps are the least expensive to insure.
Good driver discount. Keep a clean record and you can receive a discount. This means don’t get into any accidents or violations.
Look for unrelated discounts. Review discounts unrelated to teen like a multiple vehicle discount and a home and auto bundle discount for additional savings.
Low mileage discounts. Pay-as-you-drive pay-per-mile insurance can offer a significant discount. Several car insurance companies offer discounts for if you allow a telematics device to be placed in your vehicle so they can monitor your driving habits. This is considered «pay-as-you-drive.» This can give up to a 45% discount. With pay-per-mile, you’ll pay for the distance you drive, rather than driving patterns. Both discounts are great for teens or families that don’t drive very often.
Delay getting a license. This is not really a discount and probably not the a popular option for an eager teen driver, but it’s worth considering. An older teen driver is slightly cheaper to insure, approximately 20% cheaper from the age of 18 to 19.
«If a driver qualifies for several discounts, the first discount applies to your original premium and then your second discount to your revised premium and so on,» says Joel Camarano, executive director for auto underwriting at USAA in San Antonio, Texas.

Car insurance for college students
College students can follow the same guidance as given to the rest of teens. There is potential to save though. If the student plans to leave their car at home and the college is more than 100 miles away, they could qualify for a «resident student» discount or a student «away» discount, as mentioned above. These discounts can reach as high as 30%. Also, do well in school because that could lead to a good student discount. Both discounts will require you to contact your insurance provider so they can begin to apply the discounts. While your on the phone with them, don’t hesitate to ask about other discounts you may qualify for.

And remember, it’s easy to shop for car insurance using our quote comparison tool that allows you to see side-by-side quotes. It’s a free online tool and only takes about 10 minutes to see rates. Check it out

Learner’s permit insurance
You can get insurance with a permit, but most car insurance companies include the permitted teen on the parents’ policy without any action. However, the teen should be added to the parents’ policy or get their own policy when they receive their driver’s license. When that time comes, be sure to visit the rest of this article for guidance on options and discounts. Also, it may be wise to contact your insurance provider for all options available to you. But, as we have made abundantly clear in this article, it’s probably in your best interest to shop using our quote comparison tool so you can see side-by-side quotes.

Opt for no coverage savings option
It’s possible to tell your insurance company not to cover your teen, but it’s not a given. This is called a named exclusion. Through an endorsement to your policy, you and your insurance company mutually agree that the driver is not covered, which means neither is any accident the driver causes. Not all companies allow this, and not all state do either.

Adding a teen driver cheat sheet
Talk to your carrier as soon as your teen gets their license.
Compare multiple car insurance quotes using Insurance.com.
Consider all coverage options. Think about raising your deductible.
Seek out and stack as many discounts as possible.
Talk to your teen early and often about safety.
Insist they drive a safe car.
Methodology: This table shows the average annual additional premium charged for 10 ZIP codes in each state from the following carriers: Progressive, Allstate, State Farm, Nationwide, GEICO and Farmers. Data was provided for Insurance.com by Quadrant Information Services. The premium profile used a base auto insurance price for an owned 2014 Honda Accord, driven by a 40 year-old man with full coverage (100/300/50 liability, plus comprehensive and collision insurance, and a $500 deductible). The additional premium cost was determined by adding a 16-year-old male driver to the base policy. This exercise was repeated for a 16-year-old female.