Best car insurance companies for teen drivers

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Buying car insurance for a teenage driver often comes with high premiums due to their lack of experience and increased risk on the road. However, there are ways to mitigate these costs. Encouraging your teen to adopt safe driving habits can play a significant role in keeping insurance rates manageable. Additionally, many insurers offer discounts for good grades, completing driver’s education courses, or even participating in safe driving programs.

Another effective approach to managing insurance costs for teens is to be strategic about the vehicle they drive. Opting for a car with a lower insurance cost can make a noticeable difference in your overall expenses. Combining this with available discounts and promoting responsible driving can help you navigate the challenges of insuring a teenage driver without breaking the bank.

Best car insurance companies for teen drivers

State Farm, Geico and Nationwide provide the best car insurance for teen drivers. 

To find the best car insurance for teen drivers, start by comparing quotes from multiple providers, focusing on those that offer discounts for good grades, safe driving, and bundling policies. Consider insurers known for accommodating young drivers with affordable rates and flexible coverage options. Additionally, look into customer reviews and financial strength ratings to ensure reliable service and support.

The graph below shows the top insurers for teens.

How much does car insurance cost for teens?

Car insurance costs for teens can be significantly higher than for more experienced drivers, with premiums decreasing gradually as they age. For a 16-year-old driver, the average annual premium can be as high as $7,149, reflecting the elevated risk associated with the youngest drivers. This cost typically drops as the driver gains more experience, with 17-year-olds paying around $5,954 per year. While still high, the reduction in cost from age 16 to 17 demonstrates how even a single year of driving experience can make a difference in insurance rates.

As teens continue to age and gain more driving experience, their insurance premiums decrease further. An 18-year-old can expect to pay an average of $5,249 annually, while a 19-year-old sees their costs reduced to about $4,126 per year. By the time a driver reaches 20, the average annual premium drops to $3,739, still higher than the average adult driver but considerably lower than the rates faced at 16. This steady decline in premiums highlights the importance of maintaining a clean driving record, as it contributes to lower costs over time, rewarding responsible driving behavior and reduced risk.

The cheapest car insurance companies for teens

Car insurance rates for teens can vary significantly depending on gender and the insurance provider. 

Data from Insurance.com shows that Travelers and Geico consistently rank as the top two cheapest car insurance options for teens across the board, providing the most affordable rates for male and female teens, as well as the lowest overall average premiums. USAA provides the lowest rates for those who qualify.

The amount you’ll actually pay for car insurance can vary widely based on several factors, including your location, driving history, the type of car you drive, and the specific coverage options you choose. Additionally, discounts, your credit score, and whether the policy includes a teen driver will also impact your final premium.

The graph below shows the cheapest car insurance companies for teens.

Note: *USAA is only available to military members, veterans and their families.

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Why is car insurance more expensive for teens?

Car insurance for teens is more expensive primarily because they are considered high-risk drivers due to their lack of experience on the road. Statistically, teens are more likely to be involved in accidents, engage in risky driving behaviors, and receive traffic violations, all of which increase the likelihood of claims being filed. Insurance companies offset this increased risk by charging higher premiums for teen drivers. Additionally, teens are less familiar with safe driving practices and tend to be more easily distracted, further elevating the potential for accidents, which contributes to the higher cost of insuring them.

To help manage these costs, many insurance companies offer discounts specifically for young drivers, such as good student discounts or safe driving programs that reward responsible behavior behind the wheel. It’s also crucial for parents to educate their teens on safe driving practices, as maintaining a clean driving record can lead to lower premiums over time. By understanding the factors that influence car insurance rates for teens, families can make informed decisions and find coverage that offers both protection and value.

Tips for lowering the cost of car insurance for teens

To help reduce the high cost of insuring a teen driver, consider these strategies:

• Good student discounts: Many insurers offer discounts to teen drivers who maintain a strong academic record. Encouraging your teen to excel in school can lead to significant savings on premiums.
• Safe driving programs: Enroll your teen in a driver safety course or a safe driving program offered by your insurer. Completing these programs can often result in a discount, as they help reduce the risk of accidents.
• Choose a safe, modest vehicle: Opting for a car that is considered safe and has a lower insurance risk rating can lower premiums. Avoid high-performance or luxury vehicles, which typically come with higher insurance costs.
• Consider increasing deductibles: Raising the deductible on your policy can reduce your premium, but be sure that you can afford the higher out-of-pocket expense in the event of a claim.
• Bundle policies: If you have multiple insurance needs, such as home and auto, consider bundling them with the same provider. Many insurers offer discounts for bundling, which can help lower the overall cost.
• Encourage safe driving habits: A clean driving record with no accidents or violations can lead to lower insurance rates over time. Teach your teen the importance of safe driving and lead by example.
• Shop around for the best rates: Insurance premiums can vary significantly between providers, so it’s essential to compare quotes from multiple companies.

The best car insurance discounts for teens

To help reduce the cost of insuring a teen driver, consider these top car insurance discounts designed specifically for young drivers:

• Good student discount: Many insurers offer a discount for teen drivers who maintain a B average or higher. This reward for academic excellence can lead to significant savings on premiums.
• Driver’s education discount: Completing a driver’s education course can qualify your teen for a discount. These courses teach safe driving practices and reduce the likelihood of accidents.
• Safe driver discount: Insurers often provide discounts for teens who maintain a clean driving record with no accidents or traffic violations. Some companies even offer telematics programs to monitor driving habits and reward safe behavior.
• Multi-policy discount: Bundling your teen’s car insurance with other policies, like home or renters insurance, can result in a discount. Insuring multiple vehicles under the same policy can also lead to savings.
• Low-mileage discount: If your teen doesn’t drive frequently, they may qualify for a low-mileage discount. This can be especially beneficial if they only use the car for commuting to school or work.
• Student away at school discount: If your teen is attending college away from home and doesn’t take the car with them, many insurers offer a discount. This reflects the reduced risk since the car is being driven less frequently.

Chris Kissell

Contributing Researcher

 

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Chris Kissell is a Denver-based writer and editor with work featured on U.S. News & World Report, MSN Money, Fox Business, Forbes, Yahoo Finance, Money Talks News and more.