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Teens and young drivers pay the most for car insurance, but companies like State Farm, Geico, USAA and Progressive offer affordable coverage.
Teenage Car Insurance: Tips For Parents
Written by: Daniel Robinson, Written by: Daniel Robinson Author Daniel is a featured team writer and has written for a number of automotive news sites and marketing companies across the US, UK and Australia, specializing in car finance and car care. Daniel is an expert on car insurance, loans, warranty options, car services and more.
Parental Liability When It Comes To Teenage Drivers
Edited by: Rashawn Mitchner, Edited by: Rashawn Mitchner Editor Rashawn Mitchner is an editor for the Guides team with over 10 years of experience in personal finance and insurance.
Car insurance for teens and young drivers is notoriously high because of the risks new drivers pose to car insurance companies. In our research, the advisory team found that the national average budget for adding young drivers to the policy is $5,297 per year or $441 per month.
This article will explore the best car insurance options for teens and young adults, the insurance needs of teen drivers, and what factors affect car insurance rates.
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The advisory team is committed to providing reliable information to help you make the best decision about your vehicle insurance. Because consumers rely on us to provide objective and accurate information, we have created a comprehensive rating system to create our ranking of the best auto insurance companies. We have collected data on dozens of car insurance providers to evaluate companies based on a variety of rating factors. After 800 hours of research, the final result is the overall rating for each provider, the insurer with the highest point of the list.
After hundreds of hours of research, we’ve found the best car insurance companies for teens and young drivers. Each insurer is ranked in five main categories: reputation, customer experience, coverage, availability and cost. Scores are summed to obtain a total score.
The table below shows the five best car insurance companies for teenagers and young drivers. Along with the overall rating we provide for each carrier, we also provide the average annual cost of a fully covered policy.
While we rate State Farm as the top provider overall, the best auto insurance company for teens and young adults depends on specific circumstances and overall needs.
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In addition to State Farm, we found four other car insurance providers worth considering when looking for coverage. The section below will give you a detailed summary of each of the best and cheapest car insurance companies for teens and young drivers on our list.
J. D. Power Claims Satisfaction Rating: 882/1,000 AM Best Power Rating: A++ Better Business Bureau (BBB) Rating: A
State Farm is one of the few companies that offers cheap car insurance rates for teenagers that average less than $2,000 a year.
The company also offers a number of savings options aimed at younger drivers, such as a 25% good student discount that rewards those who maintain good grades. If you have a college student at school without a vehicle, you can also get a policy discount.
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State Farm has a telematics plan designed specifically for drivers under the age of 25. Along with monitoring driving habits, the Steer Clear program offers driving lessons and certification that can help lower-income young drivers.
J. D. Power Claim Satisfaction Rating: 874/1,000 AM Best Power Rating: A++ BBB Rating: A+ Communication System: DriveEasy
Geico offers the industry’s lowest average rates on teen auto insurance. In addition to low prices, the company offers a good student discount that can help young drivers pay less.
Teen drivers can also take advantage of Geico’s defensive driving discount, which lowers rates after completing an approved safe driving course. While this discount is available to drivers of all ages, it is especially valuable for teenagers who can benefit from additional lessons.
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J. D. Energy satisfaction rating: 990/1,000 AM Best power level: A++ BBB rating: NR Telematics program: SafePilot ®
Based on our data, USAA typically offers the lowest average car insurance rates for teen drivers. The company also offers discounts aimed at younger drivers such as student savings and defensive driving discounts.
While USAA ranks higher than Geico overall for us, we rank it lower on the list for young drivers because of its strict eligibility guidelines. You must be a member of the military or a family member of one to receive automatic coverage from USAA. If you qualify, you may be able to find the lowest possible car insurance rates for teen drivers or young drivers from USAA.
J. D. Power Claim Satisfaction Rating: 861/1,000 AM Best Strength Rating: A+ BBB Rating: Not Rating App Communications: Snapshot ®
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Progress has targeted its programs at high-risk drivers for decades. While the company already offers reasonable rates for young drivers, it is a particularly strong option for teenage drivers with driving violations or accidents.
Progressive also offers special discounts for teenage drivers who have been insured for at least one year. Combining this savings opportunity with the company’s great student discounts can go a long way in finding cheap car insurance for teenagers.
J. D. Power Claims Satisfaction Rating: 854/1,000 AM Best Strength Rating: A++ BBB Rating: A Telematics Program: IntelliDrive ®
Ferðamenn is another provider that offers affordable car insurance for teenagers. With discounts for maintaining good grades, learning to drive and going to school, passenger coverage is available.
How Much Is Car Insurance For Teens?
While your teenage driver hopes to never have a car accident, travelers offer a policy that will help provide reasonable coverage if one does occur. Corporate accident forgiveness and new car replacement plans can be valuable additions for high-risk teens.
While you may have heard the terms “teen driver insurance” or “teen car insurance,” technically there is no type of car insurance just for teens. Whether a driver is 16 years old or 96 years old, they must meet the state’s minimum liability insurance requirements. If the car is foreclosed, the mortgagee may require collision and comprehensive coverage.
Determining the right coverage level for teenage drivers requires knowledge of the standard coverage levels for car insurance. The section below contains basic information about each of the main types of coverage.
If you’re buying teen driver insurance or helping new drivers buy their own insurance, it’s helpful to know the different types of insurance. Almost every state requires some form of liability auto insurance, which covers damages to others when the driver is at fault. Here are the main parts of liability insurance:
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The minimum level of liability coverage varies by state. For example, drivers in North Carolina are expected to have 30/60/25 coverage, which means the policy will pay up to $30,000 per person for bodily injury, $60,000 per accident for bodily injury, and $25,000 for property damage.
Collision coverage protects your vehicle in the event of a collision, regardless of who is at fault. While collision coverage is not required by state law, your lender may require it if you are financing a vehicle as it protects the investment.
Collision coverage will reimburse you for damages to your car and pay you the actual vehicle value (ACV) if it’s considered a total loss. However, collision insurance does not cover damage in stationary situations.
Comprehensive insurance is another common requirement for motorists who pay for a vehicle. Unlike collision management, it focuses more on non-driving situations.
Do I Have To Add My Teenager To My Car Insurance?
Based on our average for full coverage, teen car insurance costs by Average $5,827 per year or $486 per month. Rates are higher for young drivers compared to other age groups for a number of reasons, which we’ll explore in more detail below.
As we mentioned above, age and driving record affect insurance rates, but insurers weigh other factors as well. Local minimum insurance rates affect prices, and features such as the gender listed on a driver’s license in most states.
Drivers should make sure their insurance provides adequate financial protection, but it may be a good idea to increase coverage for teenagers as they are more likely to get into an accident.
Buying the minimum liability insurance required by the state is not enough to protect you from lawsuits and sometimes it is not enough to cover accidents, according to the Insurance Institute (III).
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If the state only requires $50,000 in personal injury damages per accident and the driver incurs $70,000 in medical bills, they are on the hook for the balance. Depending on the value of your property,
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