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Teen car insurance costs: what to be aware of

It's fact of life that teen car insurance costs will be higher than for more experienced drivers, but there are some steps you can take to lessen the blow

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Although most teens are excited to finally get their driver's licenses, parents often dread that day. This is often because parents know there will be even more sleepless nights and that they are going to have to add a teen driver to the family's existing auto insurance policy. Teen car insurance costs are higher than those of adults. This means that parents of teen drivers often have to bear the additional costs.

Less experience means more risk...and costs

teen insurance costsAs a parent, you should understand that drivers ages 15 to 19 are very risky to insure. This is because teens have a higher rate of automotive accidents due to their lack of driving experience. According to the U.S. Centers for Disease Control and Prevention (CDC), the number one killer of teens in the United States is car accidents. Teen drivers are four times more likely to have collisions than the general driving public. This is the primary contributing factor for why teen car insurance costs are so high. Even teens with excellent driving records have to pay higher rates and those rates will generally remain high until a driver reaches the age of 25 (assuming they have no accidents they are at fault for and assuming they have no serious driving-related citations.)

How much more are the costs?

As with adults, teen auto insurance costs vary considerably depending on the insurance company you use. There are certainly some teen car insurance companies who do a better job at offering affordable rates and policies that do well to cover teen drivers. Even the best car insurance companies can't prevent a teen driver or his/her familiy from paying more for coverage.

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According to information from the Insurance Research Council (IRC) and from the National Association of Insurance Commissioners (NAIC), on average, if you are a single-car family, your auto insurance cost will increase by 44 percent when you add a teen driver (though there are some slight differences if you add only female teen drivers or male teen drivers as male teen drivers cost more to insure.) If you have two cars, the insurance costs increase about 58 percent and with three or more cars on a policy, your rates increase by an average of 62 percent when you add a teen driver.

Steps you can take to decrease the impact

Although your family car insurance premiums will definitely increase when you add a teen driver, you can do a few things to reduce the amount you ultimately pay. One important step is to have your teen take a driver training course at a local driving school or through the high school he/she attends and have the training documented. This helps the insurance company know that your teen is serious about being a good driver. It's also important to stress that your teen maintain good grades while in school. Some insurance companies offer discounts to teen drivers who have a least a "B" average or better in school (or in some cases, by passing an equivalency test.) Insurance companies give a benefit of assumption to student drivers who maintain good grades, believing they will be more responsible. By encouraging your child to get better grades, you can reduce your teen driver car insurance costs.

teen driver classAnother step you can take to reduce your insurance premiums when you add a teen driver is by not getting your teen driver his or her own car. A separate car insurance policy for a teen driver is going to be far more expensive than the added premium you'll see by putting a teen driver as an additional insured on your own or a family car insurance plan. By adding a teen to an exisitng policy, you may also enjoy discounts for multi-diver or multi-policy or even for family coverage rates.

Another way to lower teen car insurance costs is to raise your deductibles for coverage options like collision and comprehensive coverage to at least $1,000 each. Higher deductibles result in lower premiums. In fact, you may want to look closely at the coverage options you have attached to any car insurance policy. Unless you are legally or contractually required to carry certain options, you could be overinsuring your cars (especially if they are older models with low to moderate cash or trade-in value.)

It can pay to shop and compare

It's also a good idea to comparison shop. Some insurance companies offer better rates for teen drivers than others. Some companies have extended coverage and family pricing plans that can generate savings on the premium you will pay. Some car insurance companies have programs where they will place a monitoring device in the cars you are insuring that has GPS tracking or even cameras and you can earn additional premium discounts if you keep track of your teen's driving habits and routinely report them to your insurer.

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Along those same lines, the age, make and model of the car your teen driver(s) will be using can have a big impact on your teen auto insurance prices. Cars that come equipped with advanced safety or even anti-theft devices can help you lower your costs of insurance too.


There are dozens of things to consider when the time comes to insure a teen driver, and the cost of insurance is just one. (You can learn even more about teen car insurance here) To be sure you are addressing all of them, it might help if you and your teen driver spent some time visiting with a local, licensed car insurance agent. An agent will be able to answer any questions you or your teen driver(s) may have and an agent might also have some useful tools to help you ensure that your teen driver(s) start on the right path with safe driving practices. At Reply! we can help by putting you in contact with local car insurance professionals who have plenty of expeirience in getting teen drivers started on the right path.

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