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State Farm teen car insurance: just what does it cost?

If you need to add a teen driver to your State Farm car insurance, here’s an idea of what it will cost you.

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It’s a generally well-known fact that insuring a teen driver can be costly. Articles on car insurance and family finances will routinely throw around figures suggesting that a family can see its car insurance premiums triple or even quadruple when they go to add its newest driver to the policy.

Is that true?

To find out, we’re crafting a model family currently carrying State Farm car insurance, and adding a teen driver to the mix to see just what the impact on premium rates will be. If you have State Farm car insurance, teen drivers will increase your rates. Here are a few specific examples illustrating by just how much:

Our model driving family

state farm teen car insuranceTo get a sense of how adding a teen can impact a family’s car insurance budget, we crafted a hypothetical family, gave them a pretty standard package of car insurance coverage available from State Farm, and then added a new teen driver to the policy. By using State Farm’s own online quoting services, we’re able to show you how adding a teen driver will change what you pay.

Our model driving family consists of Don and Emily Wilson and their daughter Olivia. Don is a 44-year old college professor and Emily is a 42-year old part-time paralegal and piano teacher. The two cars they have are a 2013 Dodge Ram truck (driven mostly by Don) and a 2012 Dodge Caravan used mostly by Emily. The Caravan is also the car that Olivia learned to drive and that she will mostly be driving while still at home. Don typically walks or bikes to work as they live in college towns near the campus, so the Ram is used mostly for weekend excursions and his occasional hunting or fishing outing. The Caravan is the family’s primary car. Both cars are owned, free-and-clear. Don and Emily have maintained continuous coverage with other carriers for the nearly twenty years they have been married. Neither of them have ever been in an accident, had their licenses suspended or collected any points against their driving records for serious violations.

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Olivia is an 18-year old high school senior. She is near the top of her class for grades and has completed the necessary steps for the Graduated Driver Licensing (GDL) in her state to recently earn full driving privileges. In the course of getting her license, she successfully completed school-sponsored diver education, safety and defensive driving courses. Olivia is planning on attending college next year but is waiting to see what school she settles on before deciding whether to purchase her own car. For now, the State Farm car insurance she needs will be for driving the two family cars, with most of that driving limited to the Caravan.

Insurance markets and coverage packages

state farm teen car insurance5To get a clearer picture of just how adding a teen can impact what a family will pay for car insurance, we’re taking the Wilson family shopping in three distinct markets in three separate states: Georgia, Kentucky and Ohio. According to information from both the Insurance Research Council (IRC) and the National Association of Insurance Commissioners (NAIC), these three states represent expensive, moderate and inexpensive states (correspondingly) for car insurance costs in 2014. Running a comparison across three unique markets will also show you some of the differences in coverage requirements, limits and even the discounts available through State Farm when you compare across state lines.

Here’s what we found:

(The coverage requirements and the package quotes are the result of online searches completed in May of 2014.)

Athens, Georgia

state farm teen car insurance2The State of Georgia routinely ranks among the top three most expensive states for car insurance in the country based on industry and market surveys. The state has some pretty straightforward requirements for licensed drivers. In order to be in compliance with state laws on insurance, a licensed driver must carry at least the following car insurance coverage options:

  • $25,000 in bodily injury liability coverage for a single person per accident
  • $50,000 in total bodily injury liability coverage per accident
  • $25,000 in property damage liability coverage per accident

Car insurance companies must also offer licensed drivers uninsured/underinsured motorist coverage at minimum coverage levels matching the required liability levels. Licensed drivers in Georgia are not required to carry uninsured/underinsured motorist coverage, but must formally reject the offer of such coverage (in writing.)

The Wilson family is a careful and responsible family, routinely putting car insurance coverage packages in place that exceed state minimums. With a new driver coming on (and with cars that they take exceptional care of) they also tend to add some options that provide the responsible coverage you’d expect. As a result, here is the coverage package we put in place for the Wilsons for their State Farm car insurance plan in Georgia:

  • Liability coverage: 100/300/100 levels
  • Uninsured/underinsured motorist coverage: 100/300/100 levels
  • Medical payments coverage: $5,000
  • Collision coverage (on both cars) with a $500 deductible
  • Comprehensive coverage (on both cars) with a $500 deductible
  • Roadside assistance coverage: included
  • Rental reimbursement coverage: included

In the state of Georgia, State Farm is able to extend the following car insurance premium discounts to Don and Emily Wilson:

  • Good driving/safe driving discount
  • Multi-vehicle discount
  • Vehicle safety devices discount

Even with these discounts, a six-month car insurance coverage plan like the one spelled out above is going to cost Don and Emily $160-$170 each month.

Adding Olivia to the policy with these same coverage options and levels opens a couple of additional State Farm car insurance discounts for the Wilson family in Georgia: a driver training and safety course discounts, and a good student discount. Even factoring in these additional discounts, adding Olivia to the six-month Georgia coverage plan bumps the monthly premium the Wilsons are going to pay to $240-$250.

Compare your options with these free teen car insurance quotes!

Louisville, Kentucky

state farm teen car insurance3Kentucky is a state that seems to always fall right near the middle when annual industry surveys list states by how much car insurance costs drivers. The state also has a few twists on what it requires of licensed drivers when it comes to car insurance coverage. The minimum car insurance requirements for licensed drivers in Kentucky include:

  • $25,000 in bodily injury liability coverage for a single person per accident
  • $50,000 in total bodily injury coverage per accident
  • $10,000 in total property damage liability coverage per accident
  • $10,000 in personal injury protection (PIP) coverage (no fault coverage)

That last requirement isn’t a hard and fast rule as Kentucky is what’s known as a no fault choice state where car insurance coverage is concerned. Insurance companies are required to offer drivers a minimum of $10,000 in PIP coverage on any policy as the state is a no fault state. Drivers can reject this offer but if they do, they must carry at least $10,000 in Guest PIP coverage for the benefit of any passengers that may be injured in an accident while they are driving. (This is one reason why almost everybody just gets the PIP coverage.)

As in Georgia, car insurance providers are required to offer uninsured/underinsured motorist coverage on all policies that meets the liability coverage levels.  Kentucky drivers can reject the offer but must do so in writing.

To make as close to a match comparison as possible, here’s the State Farm coverage plan we put together for the Wilson family should they decide to live and drive in Kentucky:

  • Liability coverage: 100/300/100 levels
  • Uninsured/underinsured motorist coverage: 100/300/100 levels
  • PIP coverage: $10,000
  • Collision coverage (on both cars) with a $500 deductible
  • Comprehensive coverage (on both cars) with a $500 deductible
  • Roadside assistance coverage: included
  • Rental reimbursement coverage: included

In the state of Kentucky, State Farm is able to offer Don and Emily the following car insurance discounts for this package:

  • 3-star discount (for switching carriers prior to policy expiration)
  • Multi-vehicle discount
  • Good driver/safe driver discount
  • Anti-theft and safety devices on vehicles discount

Even factoring in these discounts, Don and Emily (for a six-month State Farm car insurance policy) will be shelling out $270-$280 monthly in premium.

When Don and Emily add Olivia to their Kentucky State Farm car insurance policy, it gives them some additional discounts, including a driver safety training discount, and a good student discount. But even with those additional discounts, adding Olivia to the Wilson family State Farm car insurance plan in Kentucky bumps the monthly premium to $400-$410.

Columbus, Ohio

state farm teen car insurance4After 45 years of having some of the lowest minimum insurance requirements for licensed drivers, Ohio increased these levels in 2013 and as a result, immediately saw their ranking as a more expensive state for insurance improve. Today, Ohio is ranked as one of the least expensive states to buy car insurance. The new minimum requirements for car insurance imposed on licensed drivers in the state are:

  • $25,000 in bodily injury liability coverage for a single person per accident
  • $50,000 in total bodily injury liability coverage per accident
  • $25,000 in total property damage liability coverage per accident

Again, in an attempt to keep this illustration on an apples-to-apples comparison, here’s the State Farm coverage plan we put in place for the Wilsons in Ohio:

  • Liability coverage: 100/300/100 levels
  • Uninsured/underinsured motorist coverage: 100/300 levels (separate property damage level is not applicable in Ohio)
  • Medical payments coverage: $5,000
  • Collision coverage (on both cars) with a $500 deductible
  • Comprehensive coverage (on both cars) with a $500 deductible
  • Roadside assistance coverage: included
  • Rental reimbursement coverage: included

In Ohio, Don and Emily enjoy the following car insurance discounts from State Farm:

  • 3-star discount
  • Safe driver/good driver discount
  • Multi-vehicle discount

Factoring in these discounts, Don and Emily can get their State Farm Ohio car insurance coverage plan on a six-month policy for $170-$180 each month.

When they add Olivia to the State Farm coverage plan in Ohio, they get one additional discount for the fact that Olivia is a good student. That discount helps a bit but even with it, the expanded family plan to include Olivia makes the Wilson’s monthly premium for State Farm (on a six-month policy) $250-$260.

While every individual driver and each family will be unique in what they need for car insurance, this should give you some idea of what to expect in a real-life comparison of what it costs to add a new teen driver. Depending on the state where you live, State Farm may have additional discounts available for you and your new driver. The good neighbor company is constantly adding tools for families with new drivers that will help them start a teen off with good driving habits.

 

Whatever car insurance company you choose, you will pay more for adding a teen driver. How much more can depend on a number of factors. Perhaps the best way to be sure is to spend some time with a local, licensed car insurance agent. An agent can answer all of your questions, show you price and coverage scenarios with many more variables, and may even be able to find you additional ways to save. Reply! can be a great resource for you by connecting you to local car insurance professionals with the experience needed to make adding a teen driver to your coverage as painless as possible.

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