What’s the Cheapest Car Insurance for a Teen? Depends on Your State

 

Driving for the first time is an exciting milestone for many teenagers. However, as a parent, you may have concerns regarding

car insurance

for your child, especially when it comes to affordability.

Some states allow a 16-year-old to get a car insurance policy independently. Still, most states require that you be at least 18 years old to purchase car insurance, Laura Adams, an analyst for Coverage.com, told Insider. Therefore, when we are talking about car insurance for a teen, we mean the cost of adding them to a parent or guardian’s existing policy. Unfortunately, a study by Coverage shows that the cost to add a teen to an adult’s car insurance can significantly increase premiums. 

Adams says the average parent can expect a 130% increase or an extra $2,300 in their premium when adding a teen driver. However, having insurance is essential to protect you and your child in the event of an accident.

Best cheap car insurance for teens in 2022

According to data from ValuePenguin, the cost for an 18-year-old with a clean driving record on a parent’s policy with Erie is estimated at $2,532 per year, while other larger companies like State Farm, Nationwide, and GEICO all estimate $3,400 or more for coverage. Mercury Insurance offers coverage under $3,000 per year for drivers on the west coast for a teen driver. 

*Available in mid-Atlantic, north central, and southeast regions of the US

**USAA is only for active military, veterans, and their families.

Data from ValuePenguin 

Erie Insurance

With Erie Insurance, the cost to insure an 18-year-old driver on a parent’s policy is approximately $2,532. This makes Erie Insurance the cheapest option for parents with teen drivers. While Erie Insurance has high marks in claims satisfaction and has relatively affordable rates, it is only available in 12 states.

Other features and discounts include: 

• Diminishing deductible. Offers up to $100 off your deductible for every year a driver is claims-free up to a maximum of $500.
• YourTurn program. YourTurn is a telematics smartphone app that allows safe drivers to earn cash. Drivers ages 16-23 can earn rewards of up to $10 every two weeks, and ages 24+ can earn rewards of up to $5 every two weeks, based on driving 50 tracked miles and the participating driver’s score during the scoring period. It may not be available in all states.
• Rate lock. Allows customers to lock a rate for an indefinite period as long drivers and cars remain the same.
• Auto security endorsement. If your vehicle is less than two years old and totaled, it will be replaced with the newest model year. If your vehicle is older than two years, it will be replaced with the same model but two years newer and 30,000 fewer miles than your original vehicle.
• Pet coverage. If your pet is injured in your vehicle.

Read our Erie insurance review.

Visit Erie Insurance’s website to learn more.

USAA 

On average, USAA will cost parents $2,588. USAA is one of the most affordable options for teen drivers, however, it is only available to active-duty military, veterans, and their families. 

Other features and discounts include: 

• Safe Pilot — This app gives drivers discounts based on driving behavior and mileage.
• Rideshare coverage — Coverage if you deliver for an app-based Transportation Network Company (TNC), like Uber or Lyft.
• Accident forgiveness — If you’re accident-free for five years, the policy surcharge will be waived for your first at-fault accident.
• Pro-Active Crash Detection — You’ll be prompted to start the claims process when a collision is detected. 
• Telematics Enabled Claims (TEC) — Expedites the claims process for Safe Pilot app users by letting claims reps auto-fill data.
• Good student discount — A discount for students who maintain a certain grade average.

Read our USSA insurance review here.

Visit USAA’s website to learn more.

Nationwide

Nationwide is offered at approximately $3,406 for parents with teen drivers. It ranks high in claims satisfaction and offers many discounts and bundling opportunities to curb your auto premiums. Nationwide is also available everywhere in the US. 

Other features and discounts include: 

• Accident forgiveness — Avoid a rate increase after the first at-fault accident or minor violation on your policy.
• Vanishing deductible — Earn $100 off your deductible for each year of safe driving, up to $500.
• Roadside assistance — 24/7 emergency help if you need fuel, a tire change, a jump-start, or a tow.
• Total loss deductible waiver — Have the physical damage deductible (comprehensive or collision) waived in the event your car is totaled in an accident.
• SmartRide — Earn discounts for using your smartphone to track driving habits.
• SmartMiles — If you’re an infrequent driver, pay less with a flexible monthly rate based on how many miles you drive.
• Good student discount — Discount for students 16 to 24 years old who maintain a B or better.
• Anti-theft discount — Get a discount if your vehicle is equipped with certain anti-theft devices.

Read our Nationwide review here.

Visit Nationwide’s website to learn more.

GEICO

With GEICO, the average premium for parents with teen drivers is $3,432. It has high marks in claims satisfaction and is available everywhere in the US. GEICO is also friendly to drivers with poor credit scores. 

Other features and discounts include:

• Military — Receive up to 15% off for military and up to 25% for emergency deployment.
•  Federal employees — Get up to 12% off for active or retired federal workers with GS-7 or above designation.
• Partner groups — Discounts for alumni associations, fraternities and sororities, and professional organizations that have partnered with GEICO.
• Airbag discount — Receive up to 23% off for a vehicle with airbags.
• Anti-lock brakes — Get up to 5% off for a vehicle with factory-installed anti-lock brakes.
• Anti-theft system — Receive up to 23% off for a vehicle with a built-in anti-theft system.
• New vehicle — Get up to 15% off for three models years or newer vehicles.
• Good driver — Receive up to 22% off if you are five or more years accident-free.
• Good student — Get up to 15% off for high school or college students who maintain a B or better average.

Read our GEICO insurance review.

Visit GEICO’s website to learn more.

State Farm 

State Farm is the most expensive option on this list with premiums priced at $5,176. However, State Farm’s premiums are still lower than the national average. Additionally, it offers a number of discount opportunities for bundling and safe driving and has a national presence with high marks in auto claims satisfaction.

Other features and discounts include:

• Rideshare insurance — Covers you if you operate your car as an Uber or Lyft driver.
• Rental car reimbursement — Covers you if your car is in the repair shop or undrivable.
• Drive Safe & Save — This telematics smartphone app gives drivers discounts based on driving behavior and mileage.
• OnStar discount— Earn a discount by enrolling your eligible OnStar-enabled vehicle in Drive Safe & Save.
• Steer Clear discount — Young drivers up to age 25 can earn a discount for demonstrating safe driving habits.
• Accident-free discount — Get a discount if State Farm has insured your car for at least three consecutive years without an accident.
• Good student discount — Discount for students 16 to 25 years old enrolled full-time in high school or college with a B or 3.0 GPA or a class ranking in the top 20%.
• Student away at school discount — This discount applies if your student moves away to school and only uses the car while at home during school vacations and holidays.
• Defensive driving course discount — Taking a driver safety course may help you get car insurance discounts with State Farm.

Read our State Farm insurance review.

Visit State Farm’s website to learn more.

Who gets the best car insurance when adding a teen driver?

There are many factors that affect your car insurance rates, like:

1. age
2. gender
3. driving experience
4. driving record
5. credit score
6. where you live
7. previous insurance coverage

Adams notes that 16 years old is the most expensive age to insure because someone at this age has little driving experience and statistically, drivers have more accidents at this age. The good news is that premium rates go down with teens as they age, and rates should get more affordable every year.

The death rate among male teen drivers is twice as high as it is for female teens, according to the Centers for Disease Control and Prevention. For this reason, your son will be more expensive to insure than your daughter. 

The most expensive states to add a teen driver

While some states can charge younger people higher premiums, other states regulate insurance prices differently. For instance, age cannot be a determining factor for car insurance premiums in California and Massachusetts.

These are the top five most expensive states to insure your daughter by percentage added to your premium and by annual premium costs:

Data from Coverage.com

These are the top five most expensive states to insure your son by percentage added to your premium, and by annual premium costs:

Data from Coverage.com

The least expensive states to add a teen driver

The following states do not allow gender to be a determining factor: Hawaii, Massachusetts, Michigan, Montana, North Carolina, and Pennsylvania. Additionally, Hawaii doesn’t allow time behind the wheel to be used.

These are the top five least expensive states to insure your daughter by percentage added to your premium, and by annual premium costs:

Data from Coverage.com

These are the top five least expensive states to insure your son by percentage added to your premium, and by annual premium costs

Average annual premium for teen drivers by state

Below is a table of the average annual premium teen drivers can expect by state:

Data provided by Goosehead

Frequently Asked Questions

What discounts can you get for adding a teen driver?

Auto insurance

companies may offer some programs to get a discount on coverage for your teen. You can’t “stack” your discounts or combine them to get a massive discount in most cases. But still, you’ll want to ask your provider what, if anything, they offer for teens to earn discounts on their premium.

• Good student discount: Adams said the good student discount could save the average parent 8% off their premium for their high school, college, and graduate students up to age 25. Most carriers offer this discount if your child maintains a B average and is a full-time enrolled student.
• Away from home discount: This is usually when your teen goes away from home for college and doesn’t take the car with them.
• Safe driving training discount: Adams noted some providers reward teen drivers for taking programs to improve their driving skills. This can help you save around 8%.
• Monitoring and usage apps: Using a monitoring app can save up to 20% if you’re considered a good driver based on the metrics. Insurers like Progressive use the app to monitor how hard you hit the brakes, how fast you turn corners, and your average speed.

At what age does car insurance go down? 

Car insurance goes down every year a driver is insured and remains claim-free. Data from ValuePenguin illustrates that at 18 years old, the average male rate is $7,561 while the average female rate is $6,797. At 23, the average male rate is $3,965 and the average female rate is $3,716. At 25, the average male rate is $3,247 and the average female rate is $3,167.

What are the different types of car insurance?

There are four main types of car insurance: comprehensive, collision, and liability. Full coverage is a combination of the three. Drivers in the US must have liability coverage, but if you finance or lease your car, your lender probably requires comprehensive and collision coverage.

Comprehensive coverage replaces or repairs your vehicle if it’s stolen or damaged. Comprehensive coverage typically covers theft, fire, vandalism, or falling objects like a tree.

Collision insurance repairs your car if it’s damaged in a collision with another vehicle or object. 

If you’re involved in an accident, liability insurance covers damage you cause to the other vehicle, driver, and passengers — not your vehicle. Liability coverage is required by law — except in New Hampshire. 

The two main components of liability insurance are bodily injury and property damage, which most states require. Liability insurance also includes uninsured motorist and underinsured motorist coverage.

What’s the best car insurance option for students? 

According to Insider’s research, Erie Insurance is generally the best insurance for young adults and new drivers (in states where it’s available). 

One of the best ways to save on car insurance for a teen or young adult driver is to join a family policy. On a family car insurance policy, your premiums will be about 20% lower than having a separate plan, according to reporting by The Balance. If joining a family plan is an option, it might be the best for a teen driver. 

Many insurance companies also offer discount opportunities if a student lives away from home and does not use their car often, as well as discounts for having good grades. So, it would be beneficial to look into carriers that have those options. 

How can I find the best car insurance rates for me? 

Everyone’s car insurance rates will vary depending on the coverage you choose. Other factors can go into pricing a premium. Every car insurance company will evaluate you on different factors and weigh those factors differently.

These factors might include credit scores, driving history, accidents, type of car, mileage, and where you live.
Shop for affordable carriers that meet your coverage needs by getting quotes from several insurance companies and comparing them.

To find the best one for you out of the quotes you’ve obtained, compare the coverage types, limits, and deductible, or the amount you’ll pay out of pocket if you’re involved in an accident. The policy with the lowest price for coverage, the most coverage types and limits, and the lowest deductible is the best one for you.

Alani Asis

Personal Finance Reviews Fellow