How much is car insurance for a 16-year-old?
Newly licensed drivers are expensive to insure. They are inexperienced, naturally, and have a high rate of accidents, so insurers consider them to be high-risk drivers. The average car insurance rate for a 16-year-old who has his or her own policy is $5,473 per year, on average. What you pay will vary, depending on your insurer, whether or not the teen is added to a parent's policy, the state you live in, the type of car you drive and coverage limits. To give you an idea of what to expect to pay for coverage, we provide average annual rates by state in the charts below.
The rates for a separate teen policy are based on having the following coverage limits on a 2015 Honda Accord, along with any other state required coverages, and a deductible of $500:
- $100,000 for injury liability for one person
- $300,000 for all injuries in one accident
- $100,000 for property damage
For the cost to add a teen, CarInsurance.com compared rates in 10 zip codes in each state. The family profile we used owned a 2014 Honda Accord driven by a 40-year old man buying full coverage. Then we added a 16-year old teen to the policy. You'll see that adding a teen is much less expensive. That's because when teens get their own policy, they qualify for few discounts compared to their parents. Also, teens are commonly listed as a secondary driver on parents' policies.
Car insurance for a 16-year-old female
|State||Teen policy rate||Parents' policy||Parents' policy with teen added|
|District of Columbia||$7,071||$1,628||$3,085|
Car insurance for a 16-year-old male
|State||Teen policy rate||Parents' policy||Parents' policy with teen added|
|District of Columbia||$8,715||$1,628||$3,969|
Cheap car insurance for a 16-year-old
Each state has minimum car insurance requirements that you must have to drive legally. This level of coverage is typically the cheapest, but it also provides limited protection. In most states, buying just the required coverage means your insurance will pay for others’ injuries and car damage, but not for your own injuries or car repairs. You’ll see in the charts below how much minimum coverage costs, on average, per year in each state, for a teen buying his or her own policy.
Cheap car insurance for a 16-year-old girl
|State||Average minimum rate|
|District of Columbia||$3,120|
Cheap car insurance for a 16-year-old boy
|State||Average minimum rate|
|District of Columbia||$3,724|
*CarInsurance.com commissioned Quadrant Information Services to run auto insurance rates for a 2015 Honda Accord LX for 10 ZIP codes in each state using six large carriers -- Allstate, Farmers, GEICO, Nationwide, Progressive and State Farm. (In cases where one of the insurers doesn't return a rate, another major carrier in that state is substituted.)
Can a 16-year-old own and insure a car?
Penny Gusner, the consumer analyst for CarInsurance.com who is available to answer your car insurance questions, says that in most states a 16-year-old can own a car and insure it -- but only if a parent or legal guardian co-signs for both the vehicle's title and insurance coverage. "Even if you're under the age of majority, which is 18 in most states, you can buy and insure a car," Gusner explains. "However, in general, minors cannot enter into a contract, so they cannot sign for auto insurance by themselves. Depending on state laws, a teen may not be able to buy a car either, since that is a sales contract, without an adult signing on as well." While most states consider 16 to be a legal age to own a car, there are exceptions. Gusner points out that a juvenile must be 17 in South Carolina to buy a vehicle, again with a parent or guardian signing on. She also notes that Ohio requires a parent to file a minor consent form with the state's bureau of motor vehicles if anyone under 18 wants title to a vehicle.
Adding a teen to parents’ policy is usually more affordable
When it comes to car insurance for young drivers, most parents take the easier, and far more common, approach of adding a teen to their policy. For one thing, it's likely to be cheaper. Insurers base premiums on several factors, including the experience and driving record of the policy holder. A 16-year-old won't have that, which means higher rates. Also, as Gusner points out, the teen won't be eligible for rate reductions the parent may qualify for, including multi-vehicle, multi-policy (where car and home policies are bundled) and loyalty discounts. Still, adding a 16-year-old driver to your policy still means a significant hike in your rates. Every situation is different, but to get a an idea of what you can expect to pay, CarInsurance.com compared rates in 10 zip codes in each state. The family profile we used owned a 2014 Honda Accord driven by a 40-year old man buying full coverage. Then we added a 16-year old teen to the policy. Here's what happened:
- The average household's car insurance bill rose 152 percent.
- A teenage boy was more expensive. The average bill rose 176 percent, compared with 129 percent for teenage girls.
Despite the high cost to insure a teen, comparing car insurance quotes will save you money. Each insurer uses its own method for calculating what you pay, so prices for the same policy can vary significantly. For example, when adding a 16-year-old girl to your policy in Sacramento, California ZIP 95829, you can save $4,706 by comparing rates. That’s the difference between the highest ($7,267) and the lowest ($2,559) rates among six insurers for the same neighborhood.
Insurance for teen drivers
So, when do you add a teen to your policy? Start the process when he or she has a learner's permit. "Yes, begin when your child is first permitted to practice driving by contacting your insurer to see if you need to add the teen now or when fully licensed," she says. Gusner says the only time it might be wise to get teens a separate policy is when they've had some moving violations or been in accidents, which would hike premiums on the family coverage. Instead, think about getting a teen an older car, which is cheaper to insure, and buying a separate policy with only high liability protection." And don't forget to shop around," Gusner adds. "The teen's policy premium could be lower from one insurer to another." Also keep in mind that the high cost of insuring a young driver won’t last forever. Average car insurance rates by age show that rates begin to significantly decrease when drivers hit age 26.
Do you need insurance to drive with a learner’s permit?
Gusner says a novice driver does need to be insured, but not under his or her own policy. Usually, the policy of the vehicle's owner (typically the parent or guardian who accompanies the teen while he or she learns) should be enough. But parents need to immediately add their teen drivers to their policies once the teens are licensed." Most insurers will wait until the teen is licensed to make you add him, but do check beforehand because some will make you add the child at that point (when he has a permit) and start paying for him as a driver," she says.
Do you need insurance to get a license?
If you're driving, most states require you have minimum liability insurance. But a 16-year-old hoping to get his first license only has to show that the car he'll be driving is already covered by its owner's policy.
What's the best insurance for teenage drivers?
When insuring your 16-year-old, Gusner says first focus on liability protection, which pays for damages your teen may cause to property or people in an accident. And don't think that state-minimum coverage is enough. Medical costs can quickly escalate if there are major physical injuries. Bills can also go sky-high with property damages. Just imagine the costs if the accident involves a very expensive vehicle or other significant property. You'd have to pay out-of-pocket once those costs exceeded your liability limits. Besides raising your basic liability amount, consider purchasing an umbrella policy, which raises liability protection after those basic limits are met. An umbrella with $1 million or more of protection may be a smart move. If the vehicle is being financed, then comprehensive and collision coverage is required. But you decide if you want these optional protections if the car is already paid for. If you opt for comprehensive and collision, consider higher deductibles to lower your rate. Of course, you'd then have to pay for minor repairs following an accident.
Car insurance discounts for 16-year-olds
Despite the high rates you pay for young drivers, there are ways to trim costs. Car insurance discounts for teen drivers vary by state and insurer, but may include:
- Driver education: Completion of a driver education course, if not required under state law as part of the licensing process, may provide a 5 percent discount.
- Good student: Drivers who maintain a 3.0 or “B” average may get a discount of up to 15 percent.
- Parent-teen driving contract: Teens who sign a contract with their parents that outlines rules to follow when driving – for instance limited hours and numbers of passengers – may get up to a 5 percent discount.
What are the best cars for a 16-year-old?
There are many things to consider, with safety the most important. The Insurance Institute for Highway Safety (IIHS) offers some basic principles when buying a car for a teen:
- Try to get Electronic Stability Control (ESC). This feature, which helps a driver maintain control on curves and slippery roads, is about as good at reducing risks as safety belts, says the IIHS
- Avoid very high horsepower. "Vehicles with more powerful engines can tempt (young drivers) to test the limits," says the IIHS.
- Look for cars with the best safety reviews from the IIHS and National Highway Traffic Safety Administration.
CarInsurance.com offers its own buying suggestions, including a detailed list of the cheapest cars to insure for teen drivers, models under $15,000 with good safety ratings.
Dangerous times for 16-year-old drivers
Safety becomes even more profound when you realize how perilous our highways can be for teenagers. Here are a few sobering facts:
- A 16-year-old is 20 times more likely to be killed in a crash than an adult, according to the California Office of Traffic Safety.
- One in five 16-year-old drivers has an accident during the first year of driving, according to a study by Geico.
- 16-year-olds have higher crash rates than drivers of any other age, according to a study by the Children's Hospital of Wisconsin.