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The Best Cheap Car Insurance for Teens
Finding the best cheap car insurance for teenagers is relative. The age and type of car, whether the teen is on their parents’ insurance, the teen’s age, sex and whether they are a good student — these are all factors.
But there are many ways that teens can save money on insurance. For example, joining a parent’s existing policy will usually be much cheaper. Teens can also demonstrate responsibility and low risk by getting consistently good grades, completing driver education courses, and using safe driving practices, leading to better rates.
Of course, price isn’t everything; you don’t want your teen to hit the road with a skimpy insurance policy. We’ll look at auto insurance premiums for teens, factors in costs and how to save money on auto insurance for teens. We’ll also share our five favorite auto insurance providers for teens.
The 5 best cheap car insurance for teens
- Great Overall: Geico
- Great Policies: Nationwide
- Great Customer Service: State Farm
- Great for Careful Driving: Progressive
- Great for New Driving: Erie Insurance
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How much does teen car insurance cost?
You may have heard that auto insurance decreases as you get older when you’re under 25, but there is an unfortunate consequence of aging when you’re in that bracket. If you get off your parents’ insurance when you turn 18, your premiums can skyrocket. The premiums below are the average annual full coverage premiums for males and females, by age.
*Students were on parents’ insurance.
Bankrate utilizes Quadrant Information Services to analyze 2021 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Rates were determined by adding a 16- or 17-year-old teen to a 40-year-old married couple’s policy. The parent driver rates were calculated with a clean driving record and good credit.
Why the disparity? It’s partly due to inexperience. Here are some of the triggers that make teen drivers a risk to insurance companies, according to the Centers for Disease Control’s teen driver fact sheet:
- Inexperience. Teens often have trouble identifying dangerous situations.
- Nighttime and weekend driving. The CDC reports that in 2018, 37% of motor vehicle crash deaths among teen drivers and passengers ages 13–19 occurred between 9 p.m. and 6 a.m., and 52% occurred on Friday, Saturday, or Sunday.
- Not wearing seat belts. The National Occupant Protection Use Survey Controlled Intersection study reports that from 2010-2019, people ages 16-24 were consistently less likely to wear seat belts than adults ages 25 and older.
- Distracted driving. The U.S. High School Youth Risk Behavior Survey showed in 2019 that 39% of high school students reported texting or emailing while driving.
- Speeding. The CDC reports that teens are more likely than older drivers to speed and allow shorter headways (the distance from the front of one vehicle to the front of the next).
- Alcohol use. The Youth Risk Behavior Survey showed that in 2019, 5.4% of teens reported driving while under the influence, while 16.7% reported riding with a driver who had been drinking.
The CDC advises parents to warn teen drivers about:
- Driver inexperience
- Driving with teen passengers
- Nighttime driving
- Not using seat belts
- Distracted driving
- Drowsy driving
- Reckless driving
- Impaired driving
How to get cheaper car insurance for a teen
Join a parent’s policy
A potential way to save money on a teen’s car insurance policy is by adding him or her to an existing parent’s policy. Even after your teen graduates high school, if they are still living at home and you own or co-own their vehicle, you could consider keeping your adult child on your insurance, as your multi-car or multi-driver discount can cut their costs.
Use all available discounts
You can also save money by inquiring about specific discounts teens may qualify for. Discounts such as:
- Good student discounts: If your student gets good grades, your car insurance provider may be willing to offer them a lower rate in exchange for their demonstration of responsibility. For example, Geico offers discounts to students with an average grade of B or better.
- Student away discounts: Does your teen spend most of the year away at school without access to the family’s vehicles? If so, let your insurance provider know. Many companies will slash your rates during the time that your teen isn’t actively driving.
- Low-mileage discounts: Almost anyone can qualify for a low-mileage discount, but teens are usually a better fit for this type of discount since they generally don’t drive as far as most adults. If your teen is only driving to school and back, ask your insurance provider for a discount.
- Safe driving discounts: Technology is overhauling the car insurance industry. Many providers offer smartphone apps or devices that will monitor your teen’s driving habits. Not only will this encourage your teen to be safer on the road and potentially reduce their risk of accidents, your provider might also discount their insurance rate.
Pick a cheap car to insure
The car your teen drives also has an impact on the rates of the policy. You can lower the impact on your premiums by choosing a car that costs less to insure. According to Kelley Blue Book (KBB), the least expensive cars to insure include the Honda Odyssey LX, Jeep Wrangler Sport and Subaru Outback.
How much coverage does a teen need?
Every state has a minimum required amount of insurance that all drivers must carry. For example, Florida requires 10/20/10, while Alaska requires 50/100/25. (In the case of Florida, this means coverage must include up to $20,000 for total liability in an accident [middle number], subject to a limit of $10,000 for liability for each person [the first number], and $10,000 for property damage liability [the last number].)
That said, there are optional coverages that can be beneficial. Here are the types of coverages that teens should consider:
- Collision: Collision coverage pays for damages to your vehicle after a crash if you’re at fault or if you collide with an object.
- Comprehensive: Comprehensive coverage pays for vehicle damages from certain events other than an accident. If you live in an area that is prone to extreme weather or animal crossings, consider adding this coverage.
- Uninsured/underinsured motorist coverage: This type of coverage helps protect a driver if they get into an accident with someone who isn’t insured or doesn’t have enough insurance to cover their losses. This coverage also applies to hit-and-run situations.
- Medical payments: Medical payments coverage will help pay for a driver’s injuries or their passengers injuries after an accident regardless of who is at fault.
- Accident forgiveness: Accident forgiveness is often an optional coverage, but if your provider offers it, it can be a lifesaver for a young driver.
Factors that affect premiums
Insurance companies weigh many factors when determining auto insurance premiums, including:
- Age: Younger drivers have less experience behind the wheel and are statistically more likely to get into accidents, which increases their risk to insurers.
- Driving record: Teens don’t have much of a driving record to speak of, which makes it difficult for insurance companies to predict how safely they will drive, so they charge more to hedge against that risk.
- Credit score: Creditworthiness is used as a measure of responsibility and has been correlated with how likely a driver is to file a claim. Teens are again at a disadvantage here because they have little or no credit history they can use to demonstrate how responsible they are.
- Where you live: If you live in an area where there’s a high risk of car theft, for example, you can expect to see higher rates. Cities, in general, have higher auto insurance premiums than rural areas. Rates are also dependent on what coverages are required by your state.
- Your vehicle: Vehicles with high safety ratings and safety equipment like anti-lock brakes or an anti-theft device can earn you lower auto insurance rates.
- Your gender: Although some states have banned the use of gender in rating policies, statistics have shown that women are less likely to get into an accident than men, so they’re usually quoted lower rates, especially during their teenage years. Sorry, guys!
- Marital status and education level: Being married and having a college degree both decrease auto insurance rates because of a lower perceived risk. Unfortunately, this is also going to work against most teens.
- Your level of coverage: If you purchase higher coverage limits or optional coverages like accident forgiveness or rental car reimbursement, you can expect to pay more than someone choosing the state minimum.
We welcome your feedback on this article and would love to hear about your experience with the auto insurance companies we recommend. Contact us at firstname.lastname@example.org with comments or questions.