The average cost to add a teenager to a parent’s policy last year was $278 per month, and an even steeper $438 monthly hit to secure his or her own standalone insurance, according to QuoteWizard. Car insurance for teens isn’t cheap, and premiums often can be more than the monthly lease or loan payment for the car they’re driving.
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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 Centers for Disease Control and Prevention. Due to these reasons, teens get charged more for 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.
Best Cheap Car Insurance for Teens
- Best Overall: Geico
- Best Customer Service: State Farm
- Honorable Mentions: Nationwide and Progressive
Each of these top picks have strong financial ratings and are known for offering consistently affordable rates. They provide quality coverage, 24/7 claims service, accident forgiveness, and special discounts to students and younger drivers to help lower premium costs.
Geico gets top spot for its low overall rates and wide range of discounts available to teens. When your teen becomes an adult and is ready for his or her own policy, they’ll benefit from the Family Pricing Program, which will offer them a low rate on their first policy.
State Farm offers great customer service and claims handling, although not always at the lowest price. But don’t worry, there are still plenty of discounts for teens to choose from, including a highly reduced rate if your teen goes away to school for most of the year.
Nationwide doesn’t offer quite as many student discounts as its competitors, but its SmartRide program will let you install a device in your teen’s car to monitor for safe driving habits, encouraging your teen to stay safe and potentially reducing your insurance rate.
Like Nationwide, Progressive also offers a safe driving device called Snapshot. The provider also offers GAP insurance, which is nice to have for teens who are driving a newer car that hasn’t been paid off.
Joining Your 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 be less expensive overall than 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% in New Jersey.
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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.
Car Insurance Discounts for Teens
If you’re shocked by the amount your car insurance rate goes up after adding a teen driver, know that there are a few other ways to save money. Here are a few ideas:
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.
Almost anyone can qualify for a low-mileage discount, but teens are usually a better fit for this type of discount since they 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 an accident, your provider might also discount their insurance rate.
Frequently Asked Questions
Why are teens expensive to insure?
Teen drivers are more expensive to insure because they are more likely to be involved in accidents. According to the CDC, teen drivers get involved in three times the number of fatal crashes as older drivers.
Why is it more expensive to add a teen boy than a teen girl?
Teen boys are typically more expensive to insure than teen girls because insurers have determined that they are statistically riskier when it comes to safe driving and accidents.
What car insurance discounts are offered to teen drivers?
Many discounts are available to teen drivers, including good student discounts, student away discounts, low-mileage discounts, and safe driving discounts.
Can a teenager get their own car insurance policy?
Teenagers can get their own insurance policy, but it’s less expensive to add them to a parent’s policy.