- On average, insurance premiums increase 151% when adding a 16-year-old teen driver to a full coverage car insurance policy.
- There is a slightly larger increase in car insurance premiums if the teenager is male as opposed to female.
- The type of vehicle you choose for your teen, as well as the coverages and levels of coverage you buy, can affect your premium.
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. This change presents a challenge for many parents when faced with adding a teen driver to their car insurance policy. A study by Bankrate.com provides a sobering figure for parents adding a teen to insurance — full coverage car insurance premiums increase an average of 151% when adding a 16-year-old teen driver.
With an average annual increase of $2,531 for adding a teen to a full coverage auto insurance policy, is there any way for parents to offset the cost? Adding a teen driver to car insurance without intense premium increases requires taking advantage of discounts, utilizing safe driver programs, and being intentional with 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 insurance 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. Some companies may recommend the teen be added upon getting their permit, while others may require you to wait until the teen receives 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. While quoted premiums can change, getting a quote ahead of time can at least give you a ballpark figure, so you know how to budget for the future cost of adding your teen.
- Ask about discounts: Ask the agent about discount eligibility for your teen to help lower the cost of adding them to the car insurance policy. Many carriers offer good student discounts, driver training discounts, or telematics programs that could give your teen a discount for safe driving behaviors.
- Shop around: Get quotes from other car insurance companies to see which offers the best rates and coverage for your family when adding a teen to the insurance policy.
- Take advantage of usage-based telematics programs: Many insurance companies offer monitoring programs for teen drivers. These programs usually track your speed, hard brakes and acceleration, idle time, and other driving metrics. If your teen is a safe driver, they may earn a personalized discount.
- Stay current with your policy: As your life changes, your insurance needs may change too. Review your policy regularly and make sure you talk to an agent on occasion to help ensure the coverage types and levels still work for your situation.
How a Teen Driver Affects Car Insurance Premiums
Although the average cost increase for adding a teen driver to car insurance is already steep, at about 151%, the cost may 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 may need to be prepared for even higher premiums. However, a handful of states — California, Hawaii, Massachusetts, Michigan, Montana, North Carolina, and Pennsylvania — ban the use of gender as a car insurance rating factor.
The state you live in will also play a big role in the car insurance rate you pay for your teen. Some states have lower average car insurance premiums in general, so the cost for adding a teen is typically lower as well. Hawaii doesn’t allow car insurance companies to factor in age as a rating factor, so rates for teens may be quite a bit lower in the Aloha State. Additionally, the coverage types and levels you choose, as well as the type of vehicle your teen drives, will impact premiums. When in doubt, you can get quotes for a few different levels of coverage to figure out which works best for your needs. And if you’re shopping for a car for your teen, getting an insurance quote before you buy could help you avoid expensive surprises.
How to save on teen car insurance
Because adding a teen driver is almost guaranteed to cause a huge premium increase, 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 command a discount on cost increases and make the teenager a safer driver.
State Farm’s Steer Clear program, for example, 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 may receive a discount on the car insurance policy.
Additionally, American Family 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 may be awarded up to a 10% discount on car insurance premiums.
These programs (and others like those offered by other insurers) usually require a clean driving record free of tickets and accidents, encouraging 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 typically qualify for:
- Good student discount: Full-time students with a B or above grade point average in school can usually receive a discount from insurers for having good grades in high school or college, as long as the driver is unmarried and under 25.
- Low mileage discount: If your teen is just driving to and from school, they may qualify for a low-mileage discount, depending on how many miles they drive each day.
Even if the teen driver completes a safety program geared towards teenagers, the entire family can also enroll in programs like Progressive’s Snapshot or Allstate’s Drivewise.
These monitoring apps track cumulative miles driven and driving habits, rewarding safe driving practices like avoiding hard braking, avoiding rapid acceleration, and avoiding driving late at night. While teens can contribute to savings by demonstrating safe driving habits, the entire family can also participate. Discounts will be based on the data received from the tracking program. Be aware that some companies may increase your premium if the data shows you are a less-safe driver.
Similar to pay-per-mile, driving fewer miles is often rewarded, along with safe 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 be high if you have a teenager on your policy. Parents may want to consider making other policy changes to their car insurance policy for additional savings:
- Bundle policies: If your home and auto policies are not insured with the same company, consider bundling the policies together for more savings. Erie offers up to 20% in savings for bundling, and State Farm offers up to 17%.
- Increase your deductibles: Consider increasing the deductibles for comprehensive or collision coverage for savings; generally, the higher your deductibles, the lower your premium. Just make sure you choose levels that you can afford to pay if you file a claim.
- Choose a different car: Insurance rates vary by make and model, so it may make sense to get a different car. Although this may not be the most practical step for everyone, it could have a big impact on your premium.
Insurance Coverage Teens May Need
When adding a teen driver to car insurance, there are some coverages that may benefit you to consider including in your policy. Although 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 at-fault collision. If the teen driver is responsible for an accident, there is no coverage for the damages to their car unless collision coverage is in the policy.
- Comprehensive: Another part of full coverage, comprehensive provides physical damage coverage for many instances that collision doesn’t cover. This includes vandalism, theft of the car, hitting an animal, damage due to weather events, and broken glass.
- Higher liability limits: Increasing liability limits beyond state minimum requirements adds a layer of protection if a teenager causes damages or injury in a collision. The bodily injury and property damage liability coverage pays for the other parties involved. Higher limits could help you avoid high out-of-pocket costs after an accident.
Teen Car Insurance FAQ
Teens under 18-year-old are considered minors and cannot own their own insurance policies. Once a teen is 18 years old, they can legally buy their own policies, but there may be circumstances where it’s best not to. If your teen is still living at home (or is away at school but still technically a member of your household), it may be advantageous to leave them on your policy, as teens will usually pay higher rates on their own policies. But if your teen has moved out and has established their own household, they’ll probably need their own policy.
The best way to insure a teenager is to think about which coverages are most likely to provide essential financial protection and encourage safe driving to avoid accidents and tickets. These driving incidents generally increase rates, and because teens are already expensive to insure, tickets and accidents could send your premium skyrocketing. Taking advantage of discount programs is another way to save when adding a teen driver to car insurance.
It depends on the auto insurer. Some companies ask households to add permit-holders to their car insurance policies so that the carrier is aware an inexperienced driver is practicing with the insured vehicles. Other carriers add permit holders as drivers, which affects premiums. However, many companies ask households to wait until a teen has their driver’s license to add them to the policy. In that case, a permit does not affect your insurance prices.
Reviews.com reviews products, services, and companies based on five criteria to help readers understand how companies compare based on similar metrics. As for average pricing, we used Bankrate.com’s data of car insurance rates, based on the profiles of a 40-year male and female. For full coverage, the details used were the following:
- $100,000 bodily injury liability per person
- $300,000 bodily injury liability per accident
- $50,000 property damage liability per accident
- $100,000 uninsured motorist bodily injury per person
- $300,000 uninsured motorist bodily injury per accident
- $500 collision deductible
- $500 comprehensive deductible
To determine minimum coverage limits, Bankrate used minimum coverage that meets each state’s requirements. Our base profile drivers own a 2019 Toyota Camry, commute five days a week, and drive 12,000 miles annually.
Age: Rates were calculated by evaluating our base profile (40 years of age) with a 16-year-old driver applied. Depending on age, drivers may be a renter or homeowner. Hawaii rates indicate age is not a contributing factor.
Gender: The following states do not use gender as a determining factor in calculating premiums: California, Hawaii, Massachusetts, Michigan, Montana, North Carolina, Pennsylvania.
Rates are accurate as of February 2022. These are sample rates and should only be used for comparative purposes.