Gianetta Palmer is a writer, copywriter, and essayist. Her work has appeared in EverydayHealth.com, Healthline, and The Dyrt Magazine. She is the author of Scrunchie-Fried and writes a lot about car insurance in her spare time.

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He also has an MBA from the University of South Florid...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Nov 15, 2020

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Today, one of the most difficult things a teen driver can do is find auto insurance coverage at an affordable rate.

Not only is it difficult, but things get confusing for you, the young driver, and your parents or the adult. 

Parents can get insurance for teenagers only to see their auto policy jump over $2,500 per year.

If the teenager wants his or her own liability policy, the cost is near $2,500.

Include the additional coverage of comprehensive and collision; the premium could increase to $5,000 per year.

While it is difficult for young motorists to find an affordable rate, you can do a few things to lower the cost of car insurance coverage.

Cost of policy for a teen driver on parent's policy and the teen's own policy. Illustrated above is the average cost from car insurers for parents at $1,328. If the parents get insurance for a teen, it jumps to $2,945. Suppose the teenager decides to “go it alone,” the premium skyrockets to $4,052. The illustrated prices from insurers are averages from the 5 most populated states in the U.S.

Going on your Parent’s Insurance Policy

This can be an effective strategy, particularly if your parents have a good driving record without car insurance claims.

When a young driver goes on their parent’s policy, you create a multi-policy discount.

Most of the time, this works, sometimes it doesn’t.

I’ll go into more detail below when it doesn’t.

Car insurers will include many determining factors if a parent adds children to the policy.

For instance, car insurers may assign more risk to the multi-policy since the young driver is considered high risk.

Below is an example of insurance coverage for teens, parent insurance policies, and parent’s policy with teen added:

Teen PolicyParent PolicyParent's Policy with Teen
$7,273$1,533$3,356
$9,917$2,065$4,988
$5,530$1,208$2,631
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In all instances, the parent’s premium more than doubled with teens added.

As an inexperienced motorist, you want to talk to your agent or broker and compare the price difference when you are on your parent’s auto insurance policy and without.

If the parent is involved, be sure to contact your car insurer to get an insurance quote for adding additional people to the policy.

You might want to tell them the young adult will drive the car only to college and back, for example.

The purpose of this is to determine how the parent’s coverage will be affected by adding inexperienced motorists. 

Just because a young adult is on the parent’s policy doesn’t mean you are saving a ton of money.

For instance, the average auto insurance bill rose over 150% when adding one (1) teen driver to their insurance policy.

It’s going to be determined by ZIP code too.

If you live in California, an annual premium will likely increase by 200% or more.

Six strategies for teen and young drivers to lower their auto insurance premium. Illustrated above are six strategies to use when you (minor) or your adult parents want the lowest car insurance possible. Going on your parent’s policy and taking “state-authorized” defense driving courses or driver training is the most effective. Electronic devices are “Pay-as-you-go” or “telematics device,” from insurers such as Allstate’s Drivewise and  Nationwide’s SmartMiles program.

When Not to Add a Teenagers to Their Parent’s Policy

There are a couple of instances where you may not want to add an adolescent to a parent’s insurance policy:

– The parent or adult drives a luxury sports car.

– He or she is eager to be financially independent.

– The teenager moved out of state (not for college) with lower insurance requirements.

Be Sure You are Assigned the Cheapest Car in the Household

If you decide to go on your parent’s policy with several vehicles, make sure you are assigned to the household’s cheapest vehicle.

Why is this important?

Many car insurers will assign the most expensive vehicle to the adolescent.

Unless you tell the insurer otherwise. 

Always Comparison Shop

You may find being included in your parent’s coverage is not effective, or you may not be willing to do it.

You want to be sure to get as many car insurance rates to compare from insurance companies, such as Travelers, Allstate, and Progressive.

If you compare auto insurance costs locally, you want to be sure to compare an online quote with insurance providers in your area.

A young adult getting an online quote can be frustrating and time-consuming, particularly when you see sky-high rates from car insurers quoted.

Once you have five or six quotes, you can find other areas where you may lower the overall premium.

Below is the table with the average cost of a car insurance premium for teens state by state.

State*CostState*Cost
Alabama$6,909 Montana$3,471
Alaska $5,447Nebraska
$5,268
Arizona$7,273Nevada$8,908
Arkansas
$6,306New Hampshire$6,563
California
$7,443New Jersey$6,474
Colorado
$7,590New Mexico$7,325
Connecticut$9,917New York$8,998
Delaware$7,875North Carolina$3,471
Florida$8,277North Dakota$5,467
Georgia
$7,528Ohio $5,039
Hawaii $7,229Oklahoma
$7,482
Idaho $4,321Oregon$7,486
Illinois $7,337Penn$5,795
Indiana$5,727Rhode Island$10,023
Iowa $4,112South Carolina$6,188
Kansas $5,873South Dakota$6,021
Kentucky$9,528Tennessee$7,998
Louisiana$10,221Texas $6,791
Maine $4,297Utah
$6,323
Maryland$6,283Vermont
$4,472
Mass$6,109Virginia $4,276
Michigan
$11,723Washington
$5,872
Minnesota$5,099West Virginia$5,698
Mississippi$6,851Wisconsin
$6,128
Missouri$6,452Wyoming$4,604
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*Insurers quotes include minimum property damage liability and bodily injury coverage requirements for each state, including comprehensive and collision. For states such as Michigan, personal injury protection (PIP), uninsured and underinsured motorist protection, and medical payments coverage (MedPay) is included in the average rate from insurers. Plus, any additional protection or service per each state to keep financial responsibility laws for licensed motorists. Additional cover, such as roadside assistance, was not included.

Getting Cheap Car Insurance Rates

Raise your deductibles

If you have a low-value vehicle, you may want to consider dropping comprehensive and collision coverage options. 

If you don’t feel comfortable doing that, you can raise the auto insurance deductible from $100 to $1000, depending on your financial situation. 

DeductibleComprehensive PremiumCollision Premium
$100$128$550
$250$101$458
$500$84$375
$1000$52$280
$2500$43$197

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Remember, that is the amount you will pay before the auto insurance company covers the costs.

If your vehicle is leased or financed, you will not drop the coverage level, but you may raise them.

Drive Less

If you have a short commute to school, then be sure to tell the car insurer about it.

Annual mileage*Premium Rates
10,000 - 15,000 miles$1,532
15,000 - 20,000 miles $1,548
20,000 - 25,000 miles$1,579
25,000 - 30,000 miles$1,610

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*Is not a mileage discount; insurers premiums are less for lower mileage customers.

If you will use the vehicle to do other things, like go to the store, try to limit driving.

The lower your mileage normally, the lower your rate.

Get Good Grades

If you have a “B” average, get a copy of your report card and show it to the car insurer.

Then check for a good student discount or other discount programs.

Build Your Credit

If you haven’t already done so, you might want to get a credit card to start building your credit to achieve a good credit score

CompanyPoor (300-579)DifferenceExcellent (800-850)
21st Century$2,32824%$1,865
GEICO$2,18926%$1,632
Esurance$2,27625%$1,712
Ameriprise$2,51254%$1,621
Auto-Owners$2,53035%$1,874
Elephant$2,24345%$1,538
Erie$2,16553%$1,400
Farmers$1,95447%$1,327
Good2go$3,23166%$1,943
Grange$2,08727%$1,638
Liberty Mutual$1,76937%$1,285
Mercury$2,09574%$1,200
MetLife$1,89646%$1,298
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Once the insurer knows you are financially responsible, then over time, your insurance rates could decline, then you’re a good customer.  

Keep A Clean Driving Record

As a younger motorist, you do not want to get into an accident or have a major traffic violation.

If so, this will skyrocket your rates with an insurance company. 

Type of Vehicle

If you are shopping for a new or older model automobile, you want to compare insurance rates first.

Automobiles with good safety ratings, safety features, and anti-theft technology cost less to replace usually cost less to insure. 

If there is more than one vehicle, be sure to ask about a multi-car policy discount from your insurer. 

Type of VehicleCost of Premium per Year
Small SUV$2,465
Medium SUV$2,900
Hybrid$2,876
Large sedan$2,987
Electric $3,456
Pickup$3,455
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Before comparing an auto insurance product, many buy a vehicle then find out that the vehicle’s coverage options are extremely high.

As you can see, there is nearly a $1,000 difference in premiums between a small SUV and a pickup.

There are Companies Which Have Lower Rates

As an adolescent, you might get discouraged by the extremely high insurance quotes.

However, there is an insurance company offering the cheapest car insurance premiums to young motorists.

CompanyDiscount
Erie Insuranceup to 20%
State Farmup to 20%
Liberty Mutualup to 20%
GEICOup to 20%
Allstateup to 20%
American Familyup to 10%
Progressiveup to 10%
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The important thing to do is locate an insurance carrier, which can easily be done by comparing an online quote.

As a young driver, when you are comparing quotes, there are other items you want to keep in mind.

Then you will understand how a car insurance provider determines your rate.

For example, below are a variety of factors car insurers use to determine your rate:

– Where you live or your location by zip code

– If you are male or female

– Your past driving record

– Type of vehicle and coverage level

If you have been driving for less then five years

Younger motorists (or teenagers) get stuck with high insurance rates without a way to prove a safe driving record.

Car insurers are going to determine your past driving record over five years.

There are a few things you may want to keep in mind.

– If you receive a driver’s permit at the age of 16, be sure to tell the insurer since they could use that to calculate driving experience, and you could get a good driver discount at the age of 19 when you have a license. 

– Ask car insurers about automatic payment withdrawals from your bank account or credit card for discounts.

– If you have the financial wherewithal, pay your auto insurance premium for six months or one year. This could save you ten percent or more. Plus, you are telling car insurers you are financially responsible.

– Maintain insurance coverage as long as possible, even if it is for thirty days.

A Way for Young Drivers to get the Cheapest Car Insurance

As an adolescent, if you cannot find an affordable car insurance policy, then ask the car insurer about vehicle monitoring or usage-based insurance ratings program, such as USAA’s technology from Intelligent Mechatronic Systems, which is a tool that tracks driver’s performance and driving habits. 

The car insurance company Progressive has a Snapshot program, and if you are willing to put a plugin device in your vehicle, you could find substantially lower rates.

There are other companies offering car monitoring and Pay-As-You-Go type of plans to lower car insurance costs until you become an experienced driver. 

CompanyNew Car ProtectionAccident ForgivenessSafe Driver DiscountAvailable States
Progressive30%all 50
Liberty Mutual30%all 50
Root50%in 30 states
Motion AutoNoArizona
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Teens in California, Arizona, Utah, or Nevada, can look into the CSE’s Insurance Group at California’s Department of Insurance.

How the programs work is if your mileage is set within limits, like 5,000 to 7,000 miles per year, then you could get reduced rates.

If you drive less, then you could qualify for a better car discount with some insurers. 

As a young motorist, you want to be cognizant of tools or programs to lower your auto insurance.

Frequently Ask Questions

How much will adding a teenager to my auto insurance cost me?

If a 45-year-old man with a family has a 2019 Toyota Camry and Honda Accord with full coverage adds 17-year-old adolescents to their premium, the average household costs increased by 158%. 

A teenage boy was more expensive. The average bill increase by 176% compared to 129% for teenage girls, according to Insurance.com.

Do I have to add my teenager to my car insurance?

It is not legal for your child to drive a vehicle without auto insurance.

Your child can get their own coverage, but it is likely the cost of insurance will be 200% more expensive than if they are added to your insurance plan.

Young motorists with a learner’s permit have little effect on your coverage because of the adult supervision.

It is important to talk to a licensed agent before a family member gets their preliminary permit and license.

What is the most effective way to get cheap car insurance for a teenager?

The most effective way for a teenager to lower their premium is to be added to their parent’s policy.

Then take “state-approved” defensive driving courses or a driver training course and maintain at least a 3.0-grade point average (GPA).

Is there a time when it is cheaper for a teen driver to have a separate policy?

It is rare to save money when a teenager has a separate car insurance plan.

If the parent drives a luxury vehicle and the teen doesn’t, it may cost less to have a separate policy.

If your child goes to college in another state with lower insurance coverage requirements, they would likely benefit from an individual policy.

Some states require a stand-alone policy. If your child is living on their own in another state and not going to a university, they would have to buy their own coverage.  

It is easy to compare auto insurers’ quotes with a family member added and separated to find possible savings. 

What is the average auto insurance cost for teens?

Teen car insurance is expensive. The younger the driver, the more expensive it will be since 16-year-old drivers are twice as likely to have an accident than 18 and 19-year-olds, according to the Insurance Information Institute (iii.org). 

And this is reflected in the average cost of car insurance for teenagers nationwide.

For example, the average premium for a 16-year-old is $3,900 per year, while an 18-year-old will pay $3,100 per year.

The exact price will vary greatly by ZIP code, age, driving history, and vehicle type.

If my child gets a ticket, will it raise my rates?

Short answer – yes!

If your child gets a ticket, your premium can increase from 5 to 20%, depending on the moving violation.

Once your child is added to your coverage, driving records affect the premium cost better or worse.

Family members share in discounts and share the risk. 

Sources

https://insurance.maryland.gov/teen-auto-ins-guide.pdf

https://www.nhtsa.gov/road-safety/teen-driving

https://www.iii.org/article/auto-insurance-teen-drivers

The Insurance Institute for Highway Safety

Quadrant Information Services