How Much Is Car Insurance for a Teenager?

Adding a newly licensed teen to your car insurance typically raises the premium significantly.

Why is car insurance so expensive for teenagers? Because teen drivers are nearly four times as likely as drivers over 20 to get in a wreck, and about three times more likely to be in a fatal one, per mile driven.¹

But adding a teen to a parent’s or guardian’s policy is almost always cheaper than buying a separate policy for them. Every insurer prices teen drivers differently, and pricing can vary widely depending on your location and the insurance company.

Adding a teen driver typically causes a family’s premium to jump. Why? Because teenagers as a group are the riskiest drivers on the road. 

According to the National Highway Traffic Safety Administration, drivers ages 15 to 20 made up 5.1% of licensed drivers but accounted for 8.9% of drivers involved in fatal crashes.² Teen drivers also rack up more violations per mile driven than drivers over 20, and far more than drivers over 35.

As a result, an individual teen driver is charged roughly four times the premium of an adult.

It’s typically cheaper to add your teen to your own policy than buying a separate policy for your teenager, which loses the benefit of any multi-car and multi-driver discounts on yours. And if you have only one car and your teen buys one, adding that car to your policy may earn a multi-vehicle discount.³

A separate policy can make sense if your teen owns the car and lives away from home, for example while attending college or serving in the military.

When should you add your teen?

Call your insurer as soon as your teen gets a learner’s permit.³

Some insurers don’t charge extra for a driver with a learner’s permit until they are fully licensed; others require the permit holder to be listed by name on the policy. Follow your insurer’s rules. Leaving a permitted or newly licensed household driver off your policy can backfire: depending on the policy and your state, the insurer may deny collision or comprehensive coverage for a crash that driver is in.⁴

The cheapest way to insure a teenager is to find the company in your area that charges the most reasonable rate for your whole household, including your new teen driver.

Here’s a look at the average premiums for an 18-year-old at some of the biggest national insurers in the country.

USAA modeled lowest, but eligibility is generally limited to active and former military members, their spouses, and their eligible children.

Your own results will vary, of course. And these figures assume the teen has their own policy, not that they were added to a parent’s policy. If you have a teenage driver in the household, use Luva to shop around and get quotes from several competing insurers.

There’s not much you can do about their age, except wait. But depending on your location and insurer, there are discounts and programs that keep premiums more affordable:

• Keep the teen on the family policy and stack discounts, rather than buying a separate policy.³

• Choose a car that is cheaper to insure. Muscle cars and performance vehicles cost more, as do models that are frequently stolen, and insurers also weigh a car’s repair costs, safety record, and depreciation.

• Enroll in a usage-based or telematics program, if your teen drives well when you aren’t in the car. Most insurers give a discount for low mileage or safe-driving habits. Be careful, though: poor results can push the premium up at some companies.

• Ask about a low-mileage discount. Most teens don’t have long commutes, and reporting low annual mileage can typically reduce a premium.

• Raise the deductible. A higher deductible lowers the premium, but don’t set it so high that you couldn’t cover a repair or replacement out of pocket. The more savings you have, the easier a high deductible is to carry.

• Keep the teen’s record clean. A ticket or at-fault crash spikes premiums for several years; how much and how long depends on the violation, the insurer, your state, and the rest of the record. 

Several discounts are aimed at young drivers and students:

• Good student discount: For students who maintain at least a B average.³

• Driver training discount: For teens who complete a recognized driver education or defensive driving course.³

• Distant student discount: For a full-time student who attends school 100 or more miles from home and does not keep the insured car at school.³

• Low-mileage discount: For teens who drive well below average annual miles.

The exact savings depend on your insurer, your state, and your teen’s record.

“Full coverage” means a policy that includes liability, collision, and comprehensive coverage. It protects you and your family more than a liability-only policy, but it costs more.

Ask yourself three questions:

• Does the car have a loan or lease? If yes, the lender requires collision and comprehensive coverage until you pay off the loan.

• Could you replace the car out of pocket tomorrow if you had to? If not, keep collision and comprehensive, and set the deductible as low as you can comfortably afford.

• How does the car’s actual cash value compare with the cost of collision and comprehensive coverage plus your deductible? If those coverages cost a large share of what the insurer would pay after a total loss, dropping them may save more than it risks.

One place not to cut: liability coverage. If your teen causes a wreck with damage or injuries beyond your liability limit, the injured party can come after you personally for the rest, and can even seize assets or garnish wages. The NAIC also advises buying more than the state minimum, because medical and legal costs after an at-fault crash can quickly outrun it.⁵

That’s why many families with teens and assets to protect carry higher liability limits than the state minimum, and add an excess-liability (“umbrella”) policy.³