Key Takeaways
- The average cost of adding a teen to a parent’s car insurance policy is $278 a month.
- Young drivers pay an average of $532 a month for their own car insurance.
- Nationwide has the cheapest rates for parents adding a teen to their car insurance.
- State Farm and American Family have the cheapest rates for young drivers getting their own car insurance.
- Female teens have lower crash rates and pay less for car insurance than young males.
The average cost of car insurance for a teen driver is $532 a month for their own policy. Although teens are only charged an average of $278 a month when added to a parent’s car insurance, this amount is still expensive.
Whether you are a soon-to-be licensed teen or the parent of one, here are the details you need to find the most affordable car insurance for young drivers.
In this article
Average cost of car insurance for teen drivers
The average cost of adding a teen to a parent’s car insurance is $278 a month, which can nearly double the rate a two-parent household pays for car insurance.
Although expensive, the cost of adding a teen to a parent’s car insurance is 48% cheaper than having a teen get their own policy. The latter option costs an average of $532 a month.
This means a family can save an average of 30% in combined insurance costs by adding a teen to a parent’s car insurance, compared to having separate policies for the parent and teen.
Since rates vary by customer, it’s best to compare quotes from multiple companies when you shop for car insurance.
There are two main reasons why it’s more common for a teen to be added to a parent’s car insurance than it is for them to get their own policy.
- Price: Adding a teen to a parent’s car insurance is almost always cheaper than having a teen on a separate policy from their parents.
- State laws: Most states require individuals to be at least 18 years old to enter any legal contract, including a car insurance agreement. To get their own policy, a teen under 18 typically needs a parent or guardian to cosign their application.
A teen can usually remain on a parent’s car insurance if they live in the parent’s home or are away at school. A teen who moves out of their parents home usually has to get their own car insurance, unless a parent is listed on the vehicle’s title.
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Cheapest car insurance companies for teens and young drivers
Nationwide has the cheapest car insurance rates for parents who add a young driver to their policy. State Farm’s rates are cheapest for teens who buy their own car insurance.
USAA’s rates are actually the cheapest overall in both situations. However, USAA is only available to current and former service members and their families.
Cheapest for parents adding a teen to their car insurance
Nationwide charges two parents with a teen driver an average of $364 a month, which is 37% lower than the national average.
The next-best rates are available from American Family, $368 a month, and State Farm, $434 a month.
| Company | Monthly rate |
|---|---|
| Nationwide | $364 |
| American Family | $368 |
| State Farm | $434 |
| GEICO | $546 |
| Progressive | $551 |
| Allstate | $994 |
| Travelers | $1,000 |
| Farmers | $1,057 |
| USAA* | $320 |
| Rates reflect the costs of policies for two 50-year-old parents and one teen, all with clean driving records. Your rates may vary. | |
Cheapest for teen drivers getting their own car insurance
State Farm has the cheapest rates on car insurance for teens who get their own policies, charging an average of $379 a month. State Farm’s rate is 29% less than the national average.
The next-best rates on individual car insurance for teens come from American Family, $398 a month, and GEICO, $479 a month.
| Company | Monthly rate |
|---|---|
| State Farm | $379 |
| American Family | $398 |
| GEICO | $479 |
| Allstate | $564 |
| Nationwide | $617 |
| Farmers | $643 |
| Progressive | $685 |
| Travelers | $1,242 |
| USAA* | $274 |
| Rates reflect average prices for teen drivers aged 16 to 19 with a clean driving record. Your rates may vary. | |
Best car insurance companies for teen drivers
American Family, State Farm and USAA stand out as the best car insurance companies for teen drivers. These insurers offer the best combo of price, financial strength and ratings by J.D. Power and the National Association of Insurance Commissioners (NAIC).
Best for parents adding a teen to their policy: American Family
$364 a month for two parents with a teen driver
Financial strengthRated A by AM Best
In addition to low rates, American Family offers unique ways to save more. For example, teens who volunteer for at least 40 hours for a nonprofit organization can earn an additional discount.
NAIC complaint rating of 0.15 indicates it has less than one-fifth as many complaints as expected for its size.
Discounts for families with teens include:
- Good student discount for maintaining a B average or better in school.
- A 10% discount for participating in American Family’s app-based Teen Safe Driver program.
- A generational discount for teens whose parents are already American Family customers.
American Family is only available in 19 states.
Best for teens getting their own car insurance: State Farm
$$379 a month for a teen driver
Financial strengthRated A++ by AM Best
State Farm, the nation’s largest car insurance company, has the cheapest average rates for teens who need their own car insurance.
Consistently high rankings for overall customer satisfaction from J.D. Power.
Additional discounts for teens who complete State Farm’s Steer Clear program, which teaches safe driving habits through online and on-road activities.
Drivers can save up to 30% more by enrolling in State Farm’s app-based safe-driver program.
State Farm’s complaint rating with the NAIC is 0.70, which is more than four times higher, or worse, than American Family’s rating.
Best for teens in a military family: USAA
$320 a month for two parents with a teen driver
$274 a month for a teen driver on their own
Financial strengthRated A++ by AM Best
Teens in a military family can get the cheapest rates on car insurance from USAA. This is true whether they get their own policy or are added to a parent’s car insurance.
USAA has the highest ranking for overall customer satisfaction in J.D. Power’s annual rankings for all 11 U.S. regions.
Enrolling in USAA’s app-based SafePilot program can help a teen save even more.
USAA’s eligibility guidelines limit the availability of its car insurance to service members and their families.
Find cheap car insurance for your family
The best way to find cheap car insurance for your family is to compare quotes from multiple companies as you prepare to add a new teen driver to your policy.
Auto insurers each use a different formula to calculate your rate. Your current company may offer you a great price now, but another company may offer a lower price after you add your child to your policy.
Obtaining quotes from multiple companies lets you find the best deal.
How does adding a teen driver affect a parent’s car insurance costs?
The exact price a parent pays to add a teen to their car insurance depends largely on the teen’s gender and age.
- Female teens are charged less for car insurance, because they have lower crash rates than their male peers.
- Regardless of gender, teens are likely to see their insurance rates decrease after each year they maintain a good driving record.
This is why the cost of adding a 16-year-old male to a parent’s policy is 56% higher than it is to add a 19-year-old female to the same policy.
| Age | Male | Female |
|---|---|---|
| 16 | $348 | $312 |
| 17 | $310 | $273 |
| 18 | $272 | $238 |
| 19 | $252 | $223 |
| Rates reflect the costs of policies for two 50-year-old parents and one teen, all with clean driving records. Your rates may vary. | ||
Costs of teen car insurance by state
Among all states, the average cost of car insurance for teen drivers ranges from $126 a month in Hawaii to $884 a month in Connecticut.
There are several reasons why insurance rates vary by state. For starters, each state has its own insurance requirements and regulations. Also, crash rates and the cost of medical treatment and car repairs for accident victims vary by region.
These are all factors that can impact insurance companies’ costs differently in each area. When insurance companies set their rates, they generally charge more in areas where they have more expenses and less in areas where they spend less.
| State | Monthly rate |
|---|---|
| Alabama | $568 |
| Alaska | $341 |
| Arizona | $636 |
| Arkansas | $416 |
| California | $371 |
| Colorado | $572 |
| Connecticut | $884 |
| Delaware | $655 |
| Florida | $785 |
| Georgia | $499 |
| Hawaii | $126 |
| Idaho | $239 |
| Illinois | $423 |
| Indiana | $230 |
| Iowa | $252 |
| Kansas | $397 |
| Kentucky | $618 |
| Louisiana | $688 |
| Maine | $223 |
| Maryland | $462 |
| Massachusetts | $406 |
| Michigan | $680 |
| Minnesota | $393 |
| Mississippi | $387 |
| Missouri | $345 |
| Montana | $282 |
| Nebraska | $325 |
| Nevada | $656 |
| New Hampshire | $369 |
| New Jersey | $590 |
| New Mexico | $383 |
| New York | $758 |
| North Carolina | $141 |
| North Dakota | $282 |
| Ohio | $278 |
| Oklahoma | $390 |
| Oregon | $452 |
| Pennsylvania | $531 |
| Rhode Island | $737 |
| South Carolina | $516 |
| South Dakota | $255 |
| Tennessee | $320 |
| Texas | $456 |
| Utah | $457 |
| Vermont | $219 |
| Virginia | $308 |
| Washington | $356 |
| Washington DC | $429 |
| West Virginia | $282 |
| Wisconsin | $292 |
| Wyoming | $238 |
| Rates reflect the average prices of individual car insurance for males and females aged 16 to 19 with clean driving records. Your rates may vary. | |
Why is car insurance for teens so expensive?
The main reason why car insurance is so expensive for teen drivers is because teens have higher crash rates than other age groups.
According to the Insurance Information Institute for Highway Safety, the crash rate for teen drivers is nearly four times higher than it is for those in their 20s or older.
Accidents cost auto insurance companies money, in the form of claims payments. Insurers pass these costs along to customers through higher rates to those seen as more likely to be involved in an accident.
By virtue of their age, teens also have not yet had an opportunity to establish an insurance history and a safe driving record. These are among the key attributes that can help a young driver qualify for better rates when they reach their 20s.
How does gender impact teen car insurance rates?
Female teens have lower crash rates than their male peers, and this is the primary reason why teenage females pay less for car insurance than males.
Nationwide, the average cost of an individual policy for a teenage female is $501 a month. The average teenage male pays $563 a month, or 12% more.
However, these price differences vary by state. Female teens pay 5% less for car insurance than males in New Jersey, for example, while the price difference in Georgia is 21%.
Seven states prohibit insurance companies from including gender as a factor in setting car insurance rates. In these states, which include California, Massachusetts and Pennsylvania, female teens pay the same price for car insurance as males with similar rate qualifications.
The impacts of gender on insurance rates change with age. A separate QuoteWizard analysis shows that 35-year-old women pay an average of 3% more for car insurance than 35-year-old men.
Understanding insurance coverage options for teen drivers
Whether you are a teen getting your own car insurance or being added to a parent’s policy, it’s important to understand how the coverages in an auto insurance policy work.
Most states require your auto insurance to include liability coverage. Liability covers injuries and property damage you cause to others in an at-fault car accident.
If you finance your vehicle with a loan, your lender will likely make you carry collision and comprehensive coverage, too, which are otherwise optional.
- Collision covers damage your car sustains in a collision with another vehicle or object, or if it overturns.
- Comprehensive covers your car for theft and damage from most non-collision causes, including fire, flood and vandalism.
Both require you to pay your deductible before insurance funds kick in.
Since your car’s resale value is the most you’ll ever receive from a collision or comprehensive claim, neither coverage type is recommended for a low-value car.
Several states also require motorists to carry uninsured motorist coverage and/or personal injury protection (PIP).
- Uninsured motorist covers injuries you and your passengers suffer in an accident caused by a driver with no insurance.
- PIP covers injuries you and your passengers suffer in a car accident, regardless of fault. It also covers lost income and essential services you may need during your recovery.
What does liability coverage mean for your teen?
Whether you add your teen to your car insurance or they get their own policy, it’s important to make sure they have enough liability coverage.
If your teen causes an accident, they can be held personally responsible for a shortfall between their liability limits and an accident victim’s medical and/or car repair costs. If your teen is a minor, you may also be on the hook for these expenses.
If you’re adding a teen to your car insurance, make sure your liability limits match or exceed your net worth. Doing so can protect your savings, home and other assets if your teen causes severe injuries and/or property damage in a car accident.
If your teen gets their own car insurance after they turn 18, they may not have as many assets to protect as you do. However, they should plan to ratchet up their liability limits as their earnings and assets grow.
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Available discounts for teen drivers
Although each discount an auto insurance company provides may not seem like much on its own, the combined savings from multiple discounts can add up fast.
Here are the most important car insurance discounts to ask about for young drivers.
Leveraging good grades for car insurance discounts
Many insurance companies offer a good-student discount to young drivers who maintain a grade point average of 3.0 or better in high school or college. The savings range from 10% to 25%, depending on the insurance company.
Make sure to keep your teen’s school transcripts handy. Although you won’t need them for a quote, you typically do need to provide a copy of them, or similar other documentation, when you activate your policy.
How driving courses can influence teen car insurance rates
Several companies also offer discounts to teens who complete an approved driver education course.
The courses that qualify for the discount vary by company.
Allstate, Farmers and Liberty Mutual are among the companies that offer a discount to teens who complete Adept Driver’s Teen Smart. The program combines online learning with onroad activities.
Other companies offer a discount to a teen that completes any state-accredited driver education program.
Saving money by enrolling in an app-based safety program
Most insurance companies offer discounts to customers of any age who enroll in their safe driver program.
Although the details vary by company, most give you an initial discount just for signing up. You typically have to download a smartphone app that monitors your driving for unsafe activities such as excessive speeding, hard braking and distracted driving.
Driving safely gets you a high score, which qualifies you for discounts on future renewals.
Being monitored while you drive may feel like a loss of privacy, but the savings can be great. For example, State Farm offers a discount of up to 30% just for enrolling in its Drive Safe and Save program.
Safety features that can lower your teen’s car insurance costs
Drivers of any age, including teens, can often score a discount by driving a vehicle equipped with the following safety or security features.
- Antilock brakes
- Airbags and/or other passive restraint systems
- An anti-theft device
Long-term benefits of safe cars for teen drivers
Safe cars don’t just help teen drivers pay less for auto insurance. They also reduce the chances a teen is involved in a car accident or injured in one.
The safest cars tend to be small- to mid-sized vehicles with some advanced safety features and average-horsepower engines.
Mini cars, high-performance vehicles and large SUVs are considered unsafe for young drivers for various reasons.
- Mini cars tend to lack enough protection to keep occupants safe during an accident.
- A high-performance engine is likely to tempt a teen to drive at excessive speeds.
- Large SUVs may be difficult for a teen to drive, particularly since they require longer braking distances than average-sized vehicles.
The top safe cars for teen drivers in 2023
The Insurance Institute for Highway Safety (IIHS) teams with Consumer Reports to identify the safest cars for teen drivers. The top choices combine high safety ratings with a low volume of insurance claims.
Each vehicle’s ratings are based on a combination of built-in safety features and their performance in crash tests. A vehicle’s claims volume reflects the frequency and severity of accidents reported to insurance companies.
For used cars, IIHS and CR recommend the following vehicles from the listed model years:
- Mazda 3 sedan or hatchback (2014 to 2020)
- Subaru Legacy (2013 to 2021)
- Toyota Avalon (2015 or newer)
- Volvo XC60 (2013, 2017)
- Nissan Murano (2015 or newer)
New cars that make the IIHS/CR list include:
- Mazda 3 sedan or hatchback
- Subaru Legacy
- Honda HR-V
- Subaru Ascent
- Hyundai Palisade
Car insurance as a college student
It’s generally good for a teen to keep their car insurance active while attending college, but the best approach depends on a teen’s situation.
- If your teen goes to school without a car, your insurance company may offer an “away at school” discount. This reduces your insurance rate and keeps your teen insured for occasional use of a borrowed car at school or during visits back home. Some companies require the school to be at least 100 miles away.
- If your teen goes off to school with a car and lives on campus, you can usually keep them on your car insurance. However, you may need to change the vehicle’s garaging address if your teen lives off campus.
- A teen who lives off campus year-round may need their own insurance, unless a parent is listed on the vehicle’s title.
Since the specific terms for insuring teens away at school vary by insurance company, it’s best to discuss your options with your insurance agent.
Teen driver FAQs: Your questions answered
Nationwide and American Family have the cheapest car insurance for parents who add a teen driver to their policy. State Farm and American Family have the cheapest rates for teens who get their own car insurance.
You should add your teen to your car insurance as soon as they get their driver’s license. In most states, it is illegal to drive without insurance. Also, getting into a car accident without insurance can be financially debilitating.
A parent's car insurance typically covers their teen if the teen has a learner’s permit and is driving under their parent's supervision. However, you should check with your insurance company to find out if restrictions apply.
A teen usually needs to be 18 to enter into any contract, including an insurance agreement. Many states allow licensed drivers under 18 to get their own car insurance if a parent or guardian co-signs their application. A teen can typically be added to a parent’s or guardian’s car insurance as soon as they get their driver’s license.
The Mazda 3 and Subaru Legacy are among the best cars for teens from a safety perspective. The Insurance Institute for Highway Safety (IIHS) encourages teens in particular to drive vehicles equipped with electronic stability control, automatic emergency braking and other advanced safety features.
Methodology: How we analyzed teen car insurance costs
Rates reflect average prices from non-binding auto insurance quotes obtained from Quadrant Information Services for sample households in Illinois, New York, Ohio, Texas and Washington state.
Sample households include two 50-year-old parents and a teen driver with two vehicles: a 2012 Honda Accord LX and a 2014 Toyota Camry SE.
Unless otherwise noted, rates for teen drivers reflect the average of prices available to all teens, male and female, aged 16 to 19 years old, for minimum- and full-coverage policies.
Minimum-coverage policies meet each state’s minimum requirements for liability insurance. Uninsured-motorist coverage and/or personal injury protection (PIP) are included in states where these coverages are required. Full-coverage policies include the following coverages, limits and deductible:
- Bodily injury liability: $100,000 per person/$300,000 per accident
- Property damage liability: $100,000
- Collision: $500 deductible
- Comprehensive: $500 deductible
- Uninsured motorist: minimum limits where required
- Personal injury protection: minimum limits where required
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