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How to find affordable car insurance for teens
Car insurance provides critical protection for teen drivers, but it can be expensive due to their inexperience behind the wheel.
If a new learner’s permit or driver’s license is in your teen’s future, here’s what to know about car insurance coverage options, rates, choosing a car insurance company, and keeping insurance costs manageable.
Getting started with car insurance for teens
While every state has different car insurance requirements, your teen will most likely need insurance whether they’re obtaining their permit or full license.
There’s an important caveat related to car insurance for young drivers, though. Most auto insurance companies require policyholders to be at least 18 years old. For this reason, many parents opt to add their teens to their existing policies. Doing so is often easier than obtaining a separate policy for a young driver. It’s also cheaper.
Understanding car insurance coverage options
As mentioned, insurance coverage requirements vary by state. Drivers in Massachusetts, for instance, are required to purchase bodily injury and property damage liability insurance, uninsured motorist, and personal injury protection coverages. In Rhode Island, drivers are only required to get bodily injury and property damage liability coverage.
That said, most states require all drivers to obtain a minimum amount of liability coverage. This coverage protects your teen if they’re involved in an at-fault accident and injure another driver or damage someone’s property.
Other insurance options are available to cover your teen driver, some of which may be optional depending on your state.
Collision coverage: Protects your teen if their car is damaged, no matter who’s responsible for an accident.
Comprehensive coverage: Pays for repairs to your teen’s car if it’s damaged due to a natural disaster, weather event, fire, burglary, or another event outside of their control.
Uninsured/underinsured motorist coverage: Protects your teen if their car is hit by a driver who doesn’t have adequate insurance coverage.
Personal injury protection: Also called no-fault insurance, this coverage protects your teen if they’re injured in an accident, no matter who’s at fault.
Roadside assistance: Offers 24/7 coverage from a network of local mechanics and tow trucks for services such as towing, flat tire repair, fuel delivery, battery replacement, and locksmiths.
Accident forgiveness: Offered by some companies as a reward for maintaining a good driving record and by others as a paid add-on, this coverage keeps your insurance rates from going up after a first at-fault accident — which can be especially valuable when covering an inexperienced teen driver on their parent’s policy.
How to find affordable teen car insurance
Your teen driver’s inexperience behind the wheel will impact your cost of car insurance — namely, driving it up. But insurance companies consider multiple other factors when setting rates, specifically:
Location or ZIP code
Make, model, and mileage of your vehicle
While you can’t control some of those factors, you can help others work in your favor, for example, by working to raise your credit score or putting your teen behind the wheel of a safe sedan instead of a sports car. You should also look at your coverage limits and deductibles. A higher deductible generally saves money on monthly premiums.
Do you live in a no-fault or tort state?
You need to know if you live in a no-fault or tort insurance state. In no-fault insurance states, drivers are compensated by their own insurers, but in tort states, drivers are compensated by the at-fault party’s insurer.
In New York, for instance, drivers are required to get bodily injury and property damage liability coverage, personal injury protection, and uninsured/underinsured motorist coverage. New York is a no-fault state. But the requirements are different for California drivers, who only need bodily injury and property damage liability coverage. California is a tort state.
Seek out car insurance discounts
As mentioned, insurance premiums tend to be expensive for new drivers, whether you add your teen to your policy or they obtain coverage on their own. Fortunately, many car insurance companies offer discounts that can help offset these costs. These car insurance discounts may be an option for your teen, depending on the insurer you choose.
Good student discount: Many insurers offer a discount for teens who maintain good grades in school – often a 3.0 GPA or B average.
Student away at school: An away-at-school discount may be another option if your teen attends college.
Safe driving: Safe driving discounts may be available for those who take a defensive driving course or use a telematics device in their vehicle.
Bundling: Your premiums may be lower if you bundle your policies or insure multiple vehicles.
Low mileage: If your teen only drives locally, you may also be eligible for a low mileage discount.
In addition to discounts, it’s critical that inexperienced drivers develop and maintain safe driving habits and follow the rules of the road. Drivers with clean driving records generally pay less for coverage than those with at-fault accidents or other moving violations.
Frequently asked questions (FAQ)
Why are car insurance rates for teens so high?
Insurance companies view new drivers as a high risk to insure because of their lack of experience on the road. As a result, they pay higher insurance premiums (or their parents do).
Insurance rates typically start to decrease when young drivers reach age 25. So if you’re shopping around for coverage for your teen, the average cost will be high to start but should gradually come down with good driving behavior.
Can a teenager get their own auto insurance policy?
A teenager may be able to get their own car insurance policy, but it depends on their age. Insurance companies generally require that individuals be at least 18 years old to obtain their own policy. But if your teen is younger, they’ll likely need to be added to your policy.
Do you need new auto coverage when your teen goes to college?
Whether your teen is attending an in-state or out-of-state college, they’ll likely be able to stay on your car insurance policy. If they cannot have a car on campus and won’t be driving while at home, you may want to consider reducing their coverage amounts temporarily. Depending on your insurer, it’s possible you could also qualify for an away-at-school discount to lower your premiums.
What is the cheapest car insurance for a 16-year-old driver?
The cost of car insurance varies widely by state, the city or town where you live, and other factors. Thus, the cheapest car insurance for a 16-year-old driver will vary depending on your family’s location and situation.
To find the best car insurance for your teen, comparing policies from popular insurance providers can help you find the most affordable option. Start with top insurers like State Farm, GEICO, Allstate, Nationwide, Progressive, and USAA. Each is highly rated by AM Best, which measures insurance companies’ financial stability.
Is car insurance more expensive for teenage boys?
Insurance companies typically view young male drivers as a higher risk on the road than young female drivers. And data from the Insurance Institute for Highway Safety (IIHS) supports this position. The IIHS indicates that males are twice as likely to die in fatal crashes than females. Thus, car insurance tends to be more expensive for teenage boys than girls.