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The Best Cheap Car Insurance for Teens
Teens are more expensive to insure because they pose a big risk to auto insurers. Not only do drivers between the ages of 16 and 19 have less experience behind the wheel, they’re also nearly three times more likely to be involved in a fatal crash than other drivers, are more likely to speed, and have the lowest rate of seatbelt use of all age groups, according to the car insurance. A lot more.
But there are many ways that teens can save money on insurance. For example, joining a parent’s existing policy will 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. Check out our top picks below for the best policies for teens for the price.
The 5 best cheap car insurance for teens
- Best Overall: Geico
- Best Policies: Nationwide
- Best Customer Service: State Farm
- Best for Careful Drivers: Progressive
- Best for New Drivers: Erie Insurance
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How much does teen car insurance cost?
There are reasons why teen insurance costs more than the average policy. According to the latest numbers with the Insurance Information Institute, the average cost of car insurance in the U.S. is $1,004 for full coverage. You can expect teen driver insurance to be higher versus other age groups, since studies show teen drivers have more at-risk behaviors when driving, including:
- Underestimating dangerous driving situations
- Lower use of seatbelts
- Driving at night and during weekends
- Higher rates of distracted driving
- Higher speeding rates
- Higher rates of alcohol use
How to get cheaper car insurance for a teen
Join a parent’s policy
A great way to save money on a teen’s car insurance policy is by adding him or her to an existing parent’s policy. While this will likely be less expensive overall when compared to buying a separate policy, you should still anticipate a significant rate increase.
According to Insure.com, adding a teen driver to an insurance policy will, on average, lead to a 161% increase in rate. This varies by state. In Hawaii, the increase is only 3% on average, while it’s 223% on average in New Jersey.
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? 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 Kelly 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?
Before a teen purchases car insurance, they’ll need to determine how much coverage they need. Every state has a minimum required amount of insurance that all drivers must carry, but there are optional coverages that can also be beneficial. Here are the types of coverages that teens should consider:
- Liability: Liability is one of the most important coverages for a teen driver. Liability coverage pays for a teen’s legal fees if they hit another driver or cause property damage and they get sued.
- Collision: Collision coverage pays for damages to a vehicle after a crash. If your teen is nervous about getting into an accident, this is a good coverage to get.
- Comprehensive: Comprehensive coverage pays for vehicle damages from any event 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 protects 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 pay for a driver’s injuries or their passengers injuries after an accident, so this is an important coverage to have.
- Accident forgiveness: Accident forgiveness is always 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: 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 email@example.com with comments or questions.