- On average, insurance premiums can increase 130% when adding a teen driver to a car insurance policy.
- There is a slightly larger increase in car insurance premiums if the teenager is male as opposed to female.
- Giving a teenager a “clunker” for their first car might actually increase the cost of car insurance premiums due to the likelihood of car troubles and less safety features.
A 16th birthday is a milestone birthday for many teenagers who are eligible to graduate from a learner’s permit to a driver’s license. With this realization comes the hard truth for many parents when faced with adding a teen driver to their car insurance policy. A 2020 study by Coverage provides a sobering figure for parents adding a teen to insurance – expect premium increases around 130% to add a 16-year-old teen driver to the car insurance policy.
With an average annual increase of $2,300 for adding a teen to the insurance policy, is there any way for parents to offset the cost of insurance? Learning how to add a teen driver to car insurance without intense premiums increases includes taking advantage of discounts, utilizing safe driver programs, and carefully setting coverage limits.
How to Add a Teen Driver to Your Car Insurance
Follow these steps for adding a teen driver to your car insurance policy.
- Speak with your agent: Before your teen gets their learner’s permit, have a conversation with an insurance agent about when to add the teenager to the policy, when they get their permit or once they receive their driver’s license.
- Get a quote: Ask for a quote to add your teen to the car insurance so you can be prepared for the cost increase. Most insurance experts recommend liability limits of at least 100/300/100.
- Ask about discounts: Ask the agent about discount eligibility for your teen to help lower the cost of adding them to the car insurance.
- Shop around: Get quotes from other car insurance companies to see who offers the best rates for your family when adding a teen to the insurance plan.
- Take advantage of monitoring programs: Most insurance companies offer safe driving programs and driving behavior monitoring programs for teen drivers. These programs usually come with a discount for participating, with an additional discount awarded for safe driving habits.
- Renewal shopping: Each year or policy renewal, shop around for quotes and ask about new discounts available so you can get the cheapest rates possible.
How a Teen Driver Affects Car Insurance Premiums
Though the average cost increase for adding a teen driver to car insurance is already steep at about 130%, the cost could be even higher if the teenager is male. The Centers for Disease Control and Prevention (CDC) consider male teen drivers riskier to insure than females, so parents of male teenagers should expect an average of 30% higher increases to add their teen to the car insurance policy.
Each state weighs car insurance rate criteria differently, and some factor in gender more than others. In Ohio, Tennessee, Vermont, Virginia, and West Virginia, male teen drivers are the most expensive to insure with an average increase of 189%. In Delaware, Washington, D.C., Hawaii, Michigan, and New York, male teenagers increase rates by an average of only 80%. Massachusetts, Montana, and Pennsylvania have the least difference by gender in insurance premiums.
When adding a female teen driver to car insurance, it will cost the most in Massachusetts, Ohio, Tennessee, Vermont and Virginia, an average of 162% premium increase. In Delaware, Hawaii, Michigan, New York and South Dakota, the average increase for adding a female teenager is just 70%.
The good news is, every year a teen driver spends behind the wheel and stays ticket- and accident-free, the quicker their car insurance rate will decrease. According to data provided by Coverage, a 20-year-old male driver will see a 55% decrease in car insurance premiums, and another 54% decrease once they reach the age of 25.
How to save on teen car insurance
With a large increase almost guaranteed for adding a teen driver regardless of gender, it can pay to find ways to save on car insurance. Here are four ways to reduce the cost of adding a teenager to your auto insurance policy:
Many insurance companies offer teen driver safety programs, which can not only command a discount on cost increases, it can also make the teenager a safer driver.
State Farm’s Steer Clear program is app-based and requires teenagers to view safe driving videos, record driving trips and take quizzes to assess their knowledge. Once completed, the teenager receives a discount on the car insurance policy.
American Family also has a Teen Safe Driving Program, which helps teenagers develop safe driving habits. This program is also app-based, and after a year or 3,000 miles driven, the teen driver is awarded with a 10% discount on car insurance premiums.
These programs require a clean driving record free of tickets and accidents, which can encourage teen drivers to make better choices behind the wheel.
Another way to save on teen car insurance is to take advantage of discounts. Besides the teen driver safety and discount programs, there are several other discounts teens can be eligible for:
- Good student discount: Full-time students with a B or above GPA in school can receive a discount for having good grades in high school or college, as long as they are unmarried and under 25.
- Distance student discount: The student away at school discount offers a reduced rate on car insurance if the teen driver is at least 100 miles away from school and does not take a car with them.
- Low mileage discount: If the teenager does not drive much, taking advantage of pay-per-mile insurance may save on car insurance costs.
These monitoring apps track miles driven and driving habits, and rewards safe driving practices like stopping safely, staying within the speed limit and avoiding driving at night. The teen driver can prove safe driving habits and the entire family can also participate, which can save 40% or more on car insurance, according to Allstate’s website.
Similar to pay-per-mile, driving fewer miles is rewarded, along with smart driving styles. Parents can lead by example and use the app data to discuss safe driving habits with teen drivers while also monitoring when and where they are driving when the parent is not with them.
Even when participating in driving safety programs, monitoring apps and applying discounts, car insurance premiums can still have a high cost with a teenager. Parents can consider making policy changes to their car insurance policy for more savings:
- Bundle policies: If the home and auto are not insured with the same company, consider bundling the policies together for more savings. Erie offers up to 25% in savings for bundling, and State Farm offers up to 17%.
- Increase the car deductible: Consider increasing the deductible for comprehensive and collision coverage for savings.
- Choose a different car: Insurance rates vary by make and model, so it may make sense to get a different car. Parents may be able to drop comprehensive and collision if they purchase an older car.
Insurance Coverage Teens Should Have
When adding a teen driver to car insurance, there are some coverages to consider. Though it may cost more initially, these coverages can provide financial protection if the teenager is involved in an accident.
- Collision: This coverage is part of what is considered full coverage. It pays to repair or replace a vehicle damaged in an accident. If the teen driver is involved in an at-fault accident, there is no coverage for the car without collision coverage.
- Comprehensive: Another part of full coverage, comprehensive provides physical damage coverage for instances that collision doesn’t cover. This includes vandalism, theft of the car, hitting an animal, weather events, and broken glass.
- Extended liability limits: Increasing liability limits beyond state minimum requirements adds a layer of protection if a teenager causes an accident. The bodily injury and property damage liability coverage pays for the other parties involved, and in some states, drivers and policyholders can be sued if the costs are higher than the liability coverage on the car insurance policy.
- Liability umbrella: If increasing liability limits, consider a liability umbrella. This coverage pays if a claim exhausts the underlying liability coverage on the car insurance policy.
Teen Car Insurance FAQ
Yes, you can get car insurance with a learner’s permit, but a licensed driver must be listed on the policy as a rated driver until you get a full driver’s license.
To add a teenager to car insurance, the extra cost is on average $2,300 per year. The rate for a teen driver could be higher or lower depending on location, gender, and coverage amounts.
A teenager should get their own car insurance policy if they are on the title of the vehicle, but they may be able to be added to the parents policy for a lower cost.
The best way to insure a teenager is to encourage safe driving to avoid accidents and tickets. Taking advantage of discount programs is another way to save when adding a teen driver to car insurance.