How Much Is Car Insurance for Teenagers: Overview, Cost, Companies & Policy

by

How Much Is Car Insurance for Teenagers: Explore the Ins and Outs of car insurance for Teenagers.

An image illustration of Car Insurance
Car Insurance: Make the right decision for your Teenager.

If you find yourself with a teenage driver in the family, you’re likely grappling with the prospect of insuring them—a venture known for its steep costs.

While teenage car insurance can be notably expensive, there are strategies to both save money and secure optimal coverage for your young driver.

This blog post addresses common queries regarding car insurance for teenagers, including:

  1. Average Cost of Car Insurance for Teenagers
  2. Reasons Behind High Costs
  3. Methods to Reduce Teen Car Insurance Expenses
  4. Top Car Insurance Companies for Teenagers

Average Cost of Car Insurance for Teenagers

Insights and Breakdowns

As per CarInsurance.com, the annual average expenditure for car insurance stands at $4,200 for a 16-year-old, $3,877 for a 17-year-old, $3,607 for an 18-year-old, and $3,219 for a 19-year-old.

These figures are computed by incorporating a teenager into a parent’s existing policy—an approach typically more economical than securing a standalone policy for the teen.

However, the precise costs can fluctuate significantly due to diverse factors, including:

  • Your state of residence.
  • The make and model of the car.
  • Your chosen coverage limits.
  • The selected deductible.
  • Eligibility for discounts.
  • The teenager’s driving history.

For a more tailored estimate of the expenses you might incur, leveraging online tools like The Zebra allows you to compare quotes from various insurers.

Why is Teen Car Insurance Pricy?

Understanding the Price Tag

Teen car insurance commands a high price tag primarily because insurance companies categorize teenagers as high-risk drivers.

This designation is influenced by several factors:

  • Limited driving experience
  • Greater likelihood of engaging in risky behaviors like speeding, texting, or driving under the influence
  • Proneness to accidents and violations compared to more seasoned drivers.

Citing statistics from the Centers for Disease Control and Prevention, motor vehicle crashes are the predominant cause of death for teens in the U.S.

In 2019 alone, 2,734 teens aged 16-19 lost their lives, with an additional 258,000 sustaining injuries in motor vehicle crashes.

Alarming figures like these lead insurers to impose elevated premiums on teenagers, aiming to offset potential losses and claims arising from their higher risk driving profiles.

Cost-Cutting Strategies for Teen Car Insurance

A Practical Guide

While teenage car insurance tends to be on the pricey side, there are effective measures to bring down costs and make it more budget friendly.

Here are some money-saving tips for teen car insurance:

  1. Comparison Shopping:
  2. Opt for a Safe Vehicle:
    • Choose a reliable and safe car for your teen.
    • Avoid sports cars, luxury vehicles, and SUVs, which typically incur higher insurance and repair costs.
    • Look for cars with favorable safety ratings, anti-theft devices, and low mileage.
  3. Adjust Deductibles:
    • Consider increasing your deductible, the amount you pay before insurance coverage kicks in.
    • While higher deductibles can lower premiums, ensure you can comfortably cover the chosen amount in case of an accident.
  4. Review and Adjust Coverage:
    • Assess the necessity of comprehensive and collision coverage, especially if your teen drives an older or low-value car.
    • Evaluate and potentially reduce optional coverages like roadside assistance, rental reimbursement, and medical payments.
    • Maintain adequate liability coverage, mandated by law in most states, to safeguard against potential legal repercussions.
  5. Exploit Discounts:
    • Inquire about available discounts, as many insurers offer them based on specific criteria.
    • Examples include:
      • Good student discount: Up to 25% for teens with a GPA of 3.0 or higher.
      • Driver education discount: Up to 15% for completing a driver education or defensive driving course.
      • Low-mileage discount: Up to 10% for teens driving below a specified annual mileage.
      • Safe driver discount: Up to 10% for maintaining a clean driving record.
  6. Policy Consolidation:

Top Car Insurance Companies for Teenagers

A Roundup

Forbes identifies some of the best car insurance companies catering to teenagers based on affordability, comprehensive coverage, and exceptional customer service:

  1. Erie:
    • Best rates for adding a 16-year-old, averaging $4,059 annually.
    • High grades from collision repair professionals and a low complaint volume.
  2. USAA:
    • Best overall rates for teens, with an average annual cost of $4,103 for a 16-year-old and $3,108 for an 18-year-old.
    • High customer satisfaction and low complaint levels, exclusively available to military members and their families.
  3. American Family:
    • Notable for a low complaint ratio compared to peers.
    • Offers good student and driver education discounts, along with a teen safe driver program.
  4. Nationwide:
    • Ideal for those interested in mileage-based programs.
    • Presents discounts for good students, driver education, and an accident forgiveness program for the first at-fault incident.

When should I add my teen to my Car insurance Policy?

Add your teen to your car insurance policy as soon as they obtain their learner’s permit or driver’s license.

Different states have varying regulations; some require notification when your teen gets their permit, while others mandate it upon obtaining the license.

Confirm the specific rules and deadlines with your state’s department of motor vehicles and your insurer.

FAQs

Q. Can my teen get their own car insurance policy?

A. Yes, your teen has the option to secure their own car insurance policy.

However, this might not be the most cost-effective choice.

Obtaining a separate policy for your teen is generally more expensive than including them in your existing policy.

Additionally, it might restrict their access to your car and coverage.

Nevertheless, if your teen has a less-than-ideal driving record, owns a high-value car, or resides in a different household, obtaining a separate policy may be necessary or advantageous.

ALSO READ:

Spread the love