Having a new teen driver in the house is often an exciting and nerve-wracking period. While this milestone brings newfound freedom and independence — and maybe a few more sleepless nights — teen drivers tend to have higher-than-average potential for fender benders, collisions, speeding tickets, and distracted driving accidents, ensuring you have the best car insurance coverage for your teen is a top priority.
According to the National Highway Transportation and Safety Association (NHTSA), teen crash risk can be reduced by up to 50% through the nationwide three-stage graduated driver licensing (GDL) system — a learner’s permit at age 16, a probationary license after six months and an unrestricted driver’s license at age 18. This program aims to help reduce the number of teen accidents and fatalities, which can also help ensure your teen’s car insurance premiums stay steady.
This factors into the national average annual premium for teen car insurance at $5,914 – $493 per month. Compared to the national average yearly premium of $1,908 or $159 monthly, teens are paying significantly higher rates, according to CarInsurance.com’s most recent analysis.
As a parent of a teen, shopping for car insurance coverage is a crucial next step that not only protects your child but can cover any additional firsts they may experience driving on their own. Learn more about your coverage options, available discounts and average premium rates to determine the best option for your teen, and your budget.
- Teen car insurance is expensive — $4,006 more annually than adults.
- Discounts, bundling, vehicle choice, safety classes and the GDL program can help save on premiums.
- Shopping around for quote comparisons is a good idea, as is talking with your current insurance company about adding your teen to your policy.
Why do I need car insurance for my teen?
Keeping your teen safe is likely one of your top priorities as a parent. You may wonder what happens if your teen accidentally clips another car’s side mirror, has a flat tire, or worse, is involved in a significant crash. This is where having the right car insurance coverage comes in — providing protection and roadside assistance when you’re not around.
It’s also essential to involve your teen in car insurance purchasing. When teens are involved in the insurance buying process, they tend to be better-informed drivers when they understand their responsibilities behind the wheel. This also applies to their understanding of the type of car they drive, what to do in an emergency and how to proceed if they are involved in an accident.
Car insurance is required in most states across the country. According to the U.S. Department of State, motorized vehicles must carry proof of liability insurance coverage—coverage that protects other drivers’ medical and property—at all times.
What are the types of car insurance?
As you may be aware, there are various types of car insurance coverage, ranging from liability to full coverage options. While it may be easy and affordable to purchase your state’s minimum coverage policy, it is a good idea to ensure your teen driver has enough protection for any type of incident or accident on the road.
Typically, teen drivers travel to and from school, home, work and shopping. According to the Insurance Institute for Highway Safety (IIHS), teen drivers in the United States drive less than most other groups of drivers; however, their crashes and fatalities are exceedingly high. In 2021, 3,058 teenagers ages 13-19 died in motor vehicle crashes, up 11% from 2020.
To determine what type of car insurance may be best for your teen, it’s essential to learn about the various types of car insurance before you start shopping around.
Liability coverage
Liability car insurance is often the most affordable option and typically fulfills states’ minimum requirements. It has two parts: property damage and bodily injury protection. If your teen is involved in an accident, these parts protect the other driver.
- Bodily injury liability car insurance: If your teen is liable for harm caused during an accident, this portion of coverage will pay the other driver’s medical bills.
- Property damage liability car insurance: It covers the other driver’s vehicle repairs, replacements or other property damage.
When determining what liability limits you may need, insurance companies often list options as numbers, such as 50/100/50. The numbers represent the limits you are covered up to. After that, you will pay out of pocket.
- The first number represents the per-person limit of $50,000
- The second number represents the per-accident limit of $100,000
- The third number represents the property damage liability limit for vehicle repairs or replacement of the other driver’s vehicle at $50,000.
CarInsurance.com recommends limits of 100/300/100. These limits cover bodily injuries and death your teen may be responsible for, including medical and funeral expenses, loss of income, pain and suffering and legal defense up to the limits of the policy.
Comprehensive car insurance
While car accidents and fender benders may be top of mind regarding teen car insurance coverage, other damages can occur. Comprehensive car insurance protects against weather damage — including fire, flood and hail — and incidents of theft, vandalism, a broken windshield, or an animal collision.
If your teen’s vehicle experiences one of these incidents, your insurance company will typically pay for repairs or provide a lump cash payment if your vehicle is a total loss. Additionally, if your teen is driving a financed vehicle, you may be required to purchase full coverage, including collision and comprehensive car insurance coverage.
Collision car insurance
Ensuring your teen and their property are protected if they’re involved in an accident can be achieved through collision car insurance coverage. This type of coverage will pay for repair costs or vehicle replacement regardless of fault — up to the actual cash value of their vehicle.
To determine if collision coverage is a good option for your teen’s car insurance policy, you may want to consider it if their vehicle is less than 10 years old or worth $3,000 or more if it’s older than 10 years old and if you couldn’t afford to replace the vehicle after an accident.
GAP or guaranteed asset protection
GAP insurance — coverage for the gap between your vehicle’s actual cash value (ACV) and the amount you still owe on a lease or loan — is an optional insurance option that helps pay what you still owe if your vehicle is a total loss or stolen. It’s often required when leasing or purchasing a car.
This option can be beneficial if you can’t afford to purchase another vehicle for your teen after you’ve finished paying for any remaining balance on the lease or loan amount. Generally, a newer vehicle loses its value once driven off the dealership lot, estimated at 20% of its value in the first year and about 15% annually until it’s four years old. This may mean you owe more on the loan than the vehicle is worth.
If your teen is involved in an accident and the insurance company deems the vehicle a total loss, you can anticipate receiving a check for the vehicle’s ACV at that time if you have GAP coverage.
Medical payments coverage
While opting for liability-only coverage is typically more affordable than full coverage (collision and comprehensive car insurance), it doesn’t tend to include any medical coverage for your teen driver. Determining how you would like your teen to be covered medically is essential.
Medical payments coverage (MedPay) helps pay for your teen’s medical expenses if they’re injured in a car accident, regardless of fault. This type of coverage also generally protects passengers in the vehicle during the accident and may be added to other family members in the same household’s policy.
It also protects covered individuals if they’re passengers in another person’s car or if they’re struck by a vehicle as pedestrians. MedPay provides financial assistance with hospital, surgical, and chiropractor expenses, funerals, prosthetics, dental, and X-ray expenses.
Personal injury protection
Another medical coverage option to consider is personal injury protection (PIP). This option provides “no-fault insurance” for medical expenses if your teen or passengers are injured in a car accident, regardless of fault. PIP coverage also protects against loss of income and disability.
PIP coverage also provides explicit car-related coverage, which can be excluded from health insurance policies and bodily harm insurance limits. Some states may require this coverage, but it is typically an optional add-on.
Roadside assistance
There is bound to be a time your teen runs out of gas, gets a flat tire, locks their keys in the car or leaves a light on draining the battery. To help ensure they can seek help immediately, roadside assistance may be a good coverage add-on. Roadside assistance provides minor service support and tows, and it often can cover minor mechanical repairs to get your teen’s vehicle back out on the road.
Your teen can call their car insurance’s provided number to dispatch help when an incident occurs. Typically, the services provided under this coverage include flat tire fixes, battery jump-starts, assistance with lockouts, fuel delivery, extrication from a ditch (within limits), and a tow to an auto shop or home.
How much car insurance should I buy?
The editors at CarInsurance.com recommend full coverage with liability limits of 100/300/100—at the minimum.
Teen drivers are a higher-risk driving group because of their inexperience and tendency to speed and be distracted drivers. It’s also essential to consider how you’ll replace their vehicle or pay for significant repairs should they be involved in a major road incident.
“You need enough auto liability to protect your non-retirement net worth if you were found at fault in a lawsuit,” says Laura Adams, MBA, an award-winning author, podcaster, and founder of The Money Stack. “You need enough comprehensive and collision coverage to pay for a vehicle if it gets totaled or stolen. Plus, you may need other coverages required in your state, such as personal injury protection.”
Check out our experts’ recommendations for how much car insurance you need
How to shop for car insurance for parents of teen drivers
How you shop for car insurance as a parent of a teen driver is pretty straightforward — it can be completed online or through an insurance company agent. But before you start car insurance shopping, know that how you shop may impact your quoted premium.
While online shopping is convenient and provides an immediate number, it might not factor in specific personal details that can save you money. Shopping with an insurance agent, on the other hand, allows you to discuss your questions, needs, and concerns.
Pros of buying car insurance online for parents of teen drivers
- It’s convenient – you can compare quotes from multiple insurance companies simultaneously.
- With an online quote, you fill out a short form and get quotes quickly.
- It’s flexible, so you can shop online for car insurance anytime.
- Avoid sales pressure by shopping online.
Pros of buying car insurance with an agent for parents of teen drivers
- It’s helpful if you need to thoroughly discuss your teen driver and coverage options.
- Discounts are likely available, and talking through them can help ensure you take advantage of every opportunity to save money.
- Avoid paying too much for car insurance or not purchasing enough coverage.
Compare quotes for car insurance for parents of teen drivers
When you’re ready to start shopping for your teen’s policy, it’s a good idea to get at least three quotes for a comparison. This can help you understand what premiums you could anticipate paying for your teen’s coverage and what happens when you change or add different coverage options. It’s also a good idea to get quotes from both online insurance companies and by calling agents.
While it may be tempting to purchase the most affordable quote, comparing what different insurance companies offer and what happens when you increase coverage limits or add-on coverage options can help you save.
Contacting your current insurance company and discussing adding your teen to your policy is also a good idea. This may mean you need to add them when they’re getting their permit to drive, not after they get their license.
It’s a good idea to include your teen driver in the process so they can learn the ins and outs of coverage and what they’re going to be responsible for, should it be an accident, a roadside issue or potential discounts they’re going to have to maintain (i.e. good student). But, before you start contacting anyone, make sure you’re prepared. You will need specific information to review, coverage options and learn how discounts and bundling can help you save.
Compare car insurance quotes from over 25 companies with a rate calculator
Gather required information
Insurance companies provide premium quotes based on personal details, such as age, driving record and gender. Before you start reaching out for rate quotes for your teen’s car insurance, it’s essential to compile the necessary information you will likely be asked to provide. The following information is some of the basics you’ll need to share, for both you and your teen driver:
- Date of birth
- Driver’s license number
- Driving record
- Insurance history
- Social Security Number (SSN)
- Vehicle Identification Number (VIN)
- Address where the vehicle is stored
If you want to add your teen driver to your pre-existing car insurance policy, you will need their personal information. Adding your teen to your policy tends to be significantly cheaper than a teen having their own policy.
Generally, your teen can be covered at no increased rate while your teen has a learner’s permit. Once licensed, you can contact your insurance company to add your teen to the policy, raising your premium.
Choose your coverage
While premiums may vary for teen car insurance, the bottom line is they’re expensive. In general, teen premiums are often thousands more annually than more experienced drivers. After the first year of driving, teens’ car insurance premiums tend to decrease slightly and will continue to drop as teens are deemed reliable, accident-free and good students.
While liability-only insurance rates tend to be cheaper than full coverage, opt for a full coverage policy for teenage drivers at 100/300/100 limits, which include
- $100,000 in liability for injuries to others
- $300,000 per accident
- $100,000 for damages to other vehicles and property
- Comprehensive insurance coverage will protect against weather and animal damage or theft
- Collision insurance coverage protects against damages to your vehicle
When deciding on the proper teen coverage protection, it’s also important to consider what you may have to pay out-of-pocket should your teen be involved in a major collision or property damage accident.
This should factor into what coverage options you put in place for your teen driver and what vehicle they drive. Insurers often charge less for some vehicle models, especially those with safety features, airbags and anti-lock brakes.
Save on car insurance for drivers through discounts and bundling
“Different auto insurers offer different discounts, including multi-line or bundling, multi-car, safe driver, low mileage, good student, and telematics that get subtracted from your base rate,” Adams says.
While insuring a teen driver is costly, there are ways to save. It’s important to review all the discounts you and your teen may have available and what happens if you bundle some of your other insurance policies into one. Some typical discounts to review with your insurance company or those you’re getting quotes from are listed below.
- Away-from-home student discount: The student away discount discount is available to parents of teens with full-time students (typically younger than 25) living 100 miles or more from home without a vehicle. Discounts typically average about 15% to 30% and may apply to liability coverages, PIP, medical payments, collision and comprehensive coverage on the student’s vehicle.
- Bundling insurance policies: Combining, or bundling, multiple insurance policies with your insurance company can save you money on your premiums. This includes having a home, renters, auto and umbrella insurance policy under one insurer. Discounts typically range from 4% to 13%.
- Education and professional discounts: Your chosen profession and the type of schooling you’ve completed can offer savings of 7% to up to 13%. For example, scientists, lawyers, doctors, teachers, and firefighters can receive 10% to 13% discounts. Higher education degrees, such as bachelor’s or master’s degrees, can provide you with a discount of 7% to 8%.
- Defensive driving course: Having your teen complete a defensive driving course not only keeps them safe on the road and decreases their chance of an accident, but it can also lower your overall rate. In general, some drivers see up to 10% off for completing a course.
- Good student discount: If your teen consistently gets good grades, they may be eligible for a monthly premium deduction. Often, this good student discount is an average of about 14%. Your teen must maintain a “B” average to qualify. Homeschooled teens are also eligible and likely will need to show proof of standardized exams.
- Low mileage discounts: There may be savings available for drivers who don’t use their vehicle often or don’t need to commute far. Teen drivers may also fall into this group as they go to several places near their homes weekly, such as school, work or shopping. On average, drivers who drive less than 7,500 miles annually can get a discount of 9%.
- Loyalty discounts: While shopping for new car insurance rates annually is advisable, most companies offer loyalty discounts. These range from 5% to 11% and increase year over year.
- Married discount: Married drivers and often domestic partners can receive a discount on their car insurance policy, up to 8% on average. Married partners also pay less than single drivers.
- Payment options: Some insurance companies offer paid-in-full reductions and electronic billing/autopay discounts. Setting up automatic monthly payments can save you up to 4%, and ensure your insurance is paid on time. If you can afford to pay your premium in full for the year, you may see an average reduction of up to 9%.
- Safety features: Often teen drivers are behind the wheel of whatever is most affordable, and these vehicles tend to be older without updated safety features. By purchasing a more updated vehicle, you can receive discounts up to 4% off your premium. This would include vehicles with anti-lock brakes, anti-theft devices, airbags, adaptive cruise control, lane warnings and collision preparation systems.
How much does car insurance cost for parents of teen drivers?
“The upside of insuring a teen is that the rate is typically lower for a parent compared to the rate a teen would pay for their own auto policy,” Adams says. “The downside is that auto insurance rates for teens are high due to their statistical likelihood of getting into an accident.”
On average, car insurance for a teen is more than three times pricier than an adult’s policy. A full coverage policy through Auto-Owners Insurance for a 16- to 19-year-old male is an average annual premium of $3,750 per year. The same policy costs an adult 25- to 60-year-old male driver $1,908 annually – $4,000 less than a teen driver.
Explore some the average annual and monthly policy premiums by coverage amounts from the top car insurance companies.
| Company | State Minimum BI/PD | 50/100/50 BI/PD | 100/300/100 BI/PD – 500 Comp/Coll |
|---|---|---|---|
| Auto-Owners | $1,016 | $1,169 | $3,750 |
| USAA | $980 | $1,203 | $3,857 |
| Travelers | $1,440 | $1,736 | $4,552 |
| Geico | $1,124 | $1,444 | $4,672 |
| Nationwide | $1,779 | $2,025 | $4,920 |
| State Farm | $1,481 | $1,777 | $5,159 |
| Progressive | $1,873 | $2,376 | $7,123 |
| Allstate | $2,140 | $2,630 | $7,641 |
| Farmers | $2,965 | $4,014 | $9,668 |
Final thoughts on car insurance shopping for parents of teen drivers
Celebrating this milestone with your teen driver shouldn’t be overshadowed by how much it’s going to cost to insure them. While it’s essential to keep their safety top of mind, it’s equally as important to find the best coverage for their needs and your pocketbook.
Teen insurance coverage is expensive. You can find savings by adding them to your policy, choosing a safer and newer vehicle, opting for as many discounts as are available and bundling your policies into one. Talking with an agent is likely a better choice than shopping online as you can review your needs and options thoroughly with a person on the phone.
It may also be worth looking into some of the cost savings you can achieve if your teen starts driving at 17- or 18-years-old versus 16-years-old. The GPD system often tiers teen driving so that they are fully licensed by 18 to decrease their likelihood of accidents and risk. The older your teen is, the more savings you will also see.
Learn more about the cost of adding a teenager to car insurance
Laura Adams
Author, podcaster and founder of The Money StackHow much car insurance do I need?
“You need enough auto liability to protect your non-retirement net worth if you were found at fault in a lawsuit. You need enough comprehensive and collision coverage to pay for a vehicle if it gets totaled or stolen. Plus, you may need other coverages required in your state, such as personal injury protection.”
Resources & Methodology
Sources
- Governors Highway Safety Institute. “Teen and novice drivers.” Accessed February 2024.
- Insurance Institute Information. “Auto insurance for teen drivers.” Accessed February 2024.
- National Highway Traffic Safety Administration (NHTSA). “Parents: Talk to your teen driver about safe driving.” Accessed February 2024.
- U.S. Department of State. “Vehicle liability insurance requirements.” Accessed February 2024.
- Insurance Institute for Highway Safety (IIHS). “Fatality Facts 2021Teenagers.” Accessed February 2024.
Methodology
CarInsurance.com editors in 2023 collected rates from Quadrant Information Services for a 16- to 19-year-old male driving a Honda Accord LX with a good insurance score and no violation on record for a full coverage insurance policy with limits 100/300/100 and $500 comprehensive and collision deductible. We analyzed 53,409,632 records, 34,588 ZIP codes and 170 insurance companies nationwide.
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Laura Longero
Executive Editor
Laura is an award-winning editor with experience in content and communications covering auto insurance and personal finance. She has written for several media outlets, including the USA Today Network. She most recently worked in the public sector for the Nevada Department of Transportation.
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John McCormick
Editorial Director
John is the editorial director for CarInsurance.com, Insurance.com and Insure.com. Before joining QuinStreet, John was a deputy editor at The Wall Street Journal and had been an editor and reporter at a number of other media outlets where he covered insurance, personal finance, and technology.
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Leslie Kasperowicz
Managing Editor
Leslie Kasperowicz is an insurance educator and content creation professional with nearly two decades of experience first directly in the insurance industry at Farmers Insurance and then as a writer, researcher, and educator for insurance shoppers writing for sites like ExpertInsuranceReviews.com and InsuranceHotline.com and managing content, now at CarInsurance.com.
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Nupur Gambhir
Managing Editor
Nupur Gambhir is a content editor and licensed life, health, and disability insurance expert. She has extensive experience bringing brands to life and has built award-nominated campaigns for travel and tech. Her insurance expertise has been featured in Bloomberg News, Forbes Advisor, CNET, Fortune, Slate, Real Simple, Lifehacker, The Financial Gym, and the end-of-life planning service.