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There’s a reason car insurance rates are notoriously high for teen drivers. Teens aged 16 to 19 are almost three times more likely to be in a fatal car accident, according to the U.S. Centers for Disease Control and Prevention. Insurance carriers know this, which is why it typically costs more to insure a young driver.
As your child gains more experience behind the wheel, their insurance costs should come down. If they maintain a good driving record, that should start happening at around 18 or 19.
Here are some simple steps you can take to help you get the most affordable car insurance for your teen driver.
Step 1: Start by lowering your own rate first
You can expect your premium to go up when adding a teen driver to your car insurance policy, but having a low rate to begin with can help prevent sticker shock. Parents, consider the following strategies to bring down your car insurance rate before adding a teen to your policy:
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Look for discounts. Many insurers allow you to save by bundling your home and auto policies, being a safe driver, keeping your mileage low, and much more. Check with your insurer to see all the car insurance discounts that might be available to you.
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Improve your credit. In some states, insurers can consider your credit-based insurance score when calculating your rate. That means a higher credit score could lead to lower car insurance premiums.
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Evaluate your coverage. When it comes time to add a teen driver to your policy, be sure that you have the proper coverage to protect them and the vehicle they’re driving. At the same time, consult with a licensed insurance agent to make sure you’re not paying for any coverage you don’t need.
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Consider a new insurance carrier. Gathering insurance quotes and comparing offers from different insurers is never a bad idea. You might find a comparable policy for a cheaper price. Just be sure to maintain a level of coverage that feels appropriate for your risk tolerance and meets your state’s minimum car insurance requirements.
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Increase your deductible. A higher car insurance deductible usually results in a lower premium. The opposite also tends to be true. But be aware that if you need to file an insurance claim, you’ll have to cover the higher deductible before your insurance kicks in.
Step 2: Add your teen to your insurance policy
Can a teenager get their own car insurance policy? Yes, teen drivers who are at least 18 can either take out a new policy on their own or be added to their parents’ policy. The latter is usually the most cost-effective way to insure a teenage driver, but be prepared for your premium to go up.
How much it increases will depend on where you live, whether you’re adding a new vehicle for your teen, your teen’s gender, and your level of coverage, among other factors. On average, adding a 16-year-old driver increases car insurance costs by 158%, according to ValuePenguin’s analysis of Quadrant data.
How long should a teen driver stay on their parents’ policy?
As long as they continue to live with you, your child can stay on your car insurance policy for as long as you like. Even college students who are away at school can remain on your policy if your home address is still listed as their primary residence. If your child grows into a young adult who’s still living with you, you can decide as a family when it’s the right time for them to get their own car insurance policy.
Step 3: Look for teen-specific discounts
Check to see if your insurance carrier offers any discounts for teen drivers. Your child may be eligible for one of the following:
Step 4: Consider adding optional coverage
While this might sound counterintuitive from a price perspective since increasing your coverage will likely result in a higher premium, having more robust coverage could save you money in the long run if your teen is in an accident and needs to file a claim.
Most states require drivers to carry a minimum amount of liability coverage, which protects you if your teen driver causes injuries or property damage. Some states also require uninsured/underinsured motorist coverage, which could come in handy if your teen is involved in an accident with a driver who doesn't have adequate insurance. Your auto loan lender may also require some degree of collision and comprehensive insurance.
Beyond that, you could customize your car insurance by adding coverage that’s in line with your risk tolerance – especially if you’ve got a teen driver in the house. You might choose to add:
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Personal injury protection. Also called no-fault insurance, this coverage protects your teen and their passengers if they’re injured in an accident, no matter who’s at fault.
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Roadside assistance. This can provide 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.
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Accident forgiveness. Some insurers offer this as a reward for maintaining a good driving record; others offer it as an add-on. Either way, this coverage keeps your insurance rates from going up after a first at-fault accident, which can be valuable when covering an inexperienced teen driver.
Car insurance is more expensive for teenage boys
Insurance companies typically view young male drivers as a higher risk than their female counterparts – and there’s data from the Insurance Institute for Highway Safety (IIHS) to support that. The IIHS indicates that males are twice as likely to die in fatal crashes than females. As a result, car insurance tends to be more expensive for teenage boys than girls.
Teen drivers vs. new drivers
Now, let’s talk about car insurance for new drivers. New drivers of any age typically pay higher premiums, thanks to their lack of experience – but the cost tends to be steeper for teens. According to Insurance.com, most insurers won’t consider lowering a new driver’s rate until they gain at least three years of driving experience and maintain continuous car insurance coverage.
The Zebra analyzed Quadrant data for car insurance premiums for new drivers of all ages. Here’s how the numbers shook out:
Car insurance for teens FAQs
Why are car insurance rates for teens so high?
Insurance companies view new drivers as risky 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 they turn 18 or 19. If you’re shopping around for coverage for your teen, the average cost will likely 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. 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 your home remains their primary residence. Depending on your insurer, it’s possible you could also qualify for an away-at-school discount to lower your premiums.
What is the best car insurance for teen drivers?
The cost of car insurance for teens varies widely by location, the parent’s driving record, type of vehicle, and other factors. That means the cheapest car insurance for a 16-year-old driver will vary depending on your family’s situation.
To find the best car insurance for your teen, comparing policies from multiple insurance providers is the first place to start. You can gather quotes and compare premiums, deductible amounts, and coverage limits to find the most affordable option.
This article was edited by Tim Manni
