Car Insurance

Car Insurance Options for Teenagers 

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Do you have a teen in the house who may be getting their driver’s license soon? Along with all the other expenses from clothing to schooling to extra-curricular activities, now you can add in car insurance.

All drivers in the United States must be insured to get behind the wheel, but new young drivers, especially those aged twenty-five and younger, pay some of the costliest, if not the most expensive insurance rates around.

Teen drivers are aged 16 to 19, while aged 20 to 25 are young adults. So, if you are going to have to pay a lot, you need to make sure you are getting the most value for your money.

There are lower-priced insurance policies, but it’s necessary to read all the fine print, as they may not be offering extensive coverage in the event of an accident. Your goal will be to find the most affordable option, but with the right comprehensive coverage for the new driver on the road.

How Much Will Teen Car Insurance Cost?

If you, or your working teen plan on an individual auto insurance policy, get out the checkbook. Teen drivers pay approximately $5,000 annually for car insurance. A female may pay a little below that, while a male driver may pay as much as $500 more but depending on the provider it could be even more expensive.

Some providers may charge in the range of $3000, but others can charge well over $8000 per year for a 17-year-old. All things considered, it’s worth your while to shop around.

Does My Teen Need Car Insurance?

If they plan on driving, yes. The law requires all drivers of motor vehicles to be insured in most states. Depending on where you live, the state laws will determine exactly what kind of coverage your teen should have to be on the road.

What Kind of Coverage Does My Teen Need?

Generally, auto insurance will reimburse property damage for vehicles involved in a crash, medical and injury expenses as well as financial losses related to the accident such as work losses. If you get full coverage, you’ll also be reimbursed for vandalism, theft, and other incidents like fires or flooding.

One fact that will influence your choice is whether your teen will be driving your car, or another family member’s car, or have his or her vehicle. If the teen will have his or her car, that car must be insured for the minimum protection required by your state of residence.

Do I Have to Add My Teenager to My Car Insurance?

If your teen will be driving your car, you still need to add your teen to your insurance policy. The premiums you will pay will be regulated by the amount of risk posed by the driver, so plan on an increase if a teen is added on.

The company must be informed of a teen behind the wheel in the event of an accident. Without adding your teen to the policy, you, and your car won’t be covered, and your provider could decide to drop you making it more difficult and costly to find another policy.

Why Does It Cost So Much to Insure a Teen?

Statistics. NHTSA data says that seat belt use is the lowest among teenagers. It is also estimated that with a teenage passenger, a teen driver will be two and a half times more likely to drive irresponsibly. This estimate rises to three times if there are more than two teens in the car. So, with increased risks come increased price tags.

Is There a Way to Save on Teen Car Insurance?

It’s less costly to add a teen to your insurance policy than to purchase individual insurance. There are also discounts available, so ask your insurer if your teen qualifies. Inquire about these possibilities:

  • Driver training and defensive driving courses may qualify your teen for a discount of 5% or more.
  • Limited driving may grab you a discount by listing your teen as an occasional driver.
  • Install a monitoring device so that a provider can monitor driving habits. This may qualify you for a substantial discount.
  • Military discounts are available for military families.
  • Assign your teen the cheapest car to drive if you have a multi-car insurance policy.
  • Increase your deductible for a lower premium and apply any savings to your teen’s liability coverage costs.
  • Be a good student. If your teen has great grades and is at the top of the class, they may be eligible for substantial savings.

Does Insurance Go Up if My Teen is Involved in an Accident?

After an accident, insurance will go up for most drivers if they are at fault. Because they are in the high-risk category, teens will have higher rates after an accident. That’s why an important feature like accident forgiveness can be so important on a teen policy. The insurer will forgive your first at-fault fender bender and not increase your rates as a result. It may be a freebie or an add-on to the policy, but it’s worth checking into.

Car Insurance Options for Teenagers

Several car insurance providers do offer competitive costs even for teenagers and as such are worth looking into if your teen is about to get a driver’s license.

Geico

Geico offers lots of discounts for younger drivers including discounts for good grades, a new vehicle, and a multi-car policy.

Progressive

Policy discounts such as “Teen Driver Discount”, Good Student, and Limited Driving are available.

State Farm

State Farm offers substantial savings to young drivers through programs like their “Drive Safe & Save” app that monitors driving habits, or a “Student Away at School” discount.

USAA – United Services Automobile Association

For military families, a teen can get coverage with USAA. Pricing is competitive and discounts are available for good grades and driver’s courses.

Stay Protected Whatever the Cost

When looking for the best coverage for your teen driver, look for a policy that offers low rates, accident forgiveness, and multiple discounts.

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