Best Car Insurance for Teens
- August 23, 2018
- Posted by: Melissa Horton
- Category: Insurance
Hitting the open road as a new teen driver is exciting and often a long-awaited rite of passage. Teenagers make up an estimated 13 percent of all drivers on the road, but they also account for 28 percent of the accidents between drivers each year, according to the Centers for Disease Control and Prevention.
For this reason, car insurance for teens is a must-have. However, parents of teenagers can expect a significantly higher cost of car insurance when adding a teen to their policy. Young drivers who venture out on their own for car insurance can expect to pay even more because they do not have their parents’ driving record to lean on.
While adding a teen driver to your car insurance can take a bite out of the monthly budget, there are affordable ways to get the job done. The best car insurance for teens depends on several factors, including the age and gender of the driver, along with the age of the vehicle being insured.
It is important as a new teen driver, or a parent of one, to evaluate the features of car insurance policies to ensure the best car insurance for teens is in place in terms of coverage and cost.
- Best Car Insurance for Teens
- Cost of Car Insurance
- Why Teens Pay More
- How to Save on Auto Insurance for Teens
Best Car Insurance for Teens
Although adding a teen driver to an auto insurance policy seems challenging from an expense standpoint, several car insurance companies make it easier for parents and new drivers. Below are the options for the best car insurance for teens based on ease of adding a new driver, cost, and coverage.
Erie Insurance is one of the largest car insurance providers in the Midwest, offering coverage to teen drivers as an add-on to their parents’ policy. Erie is a strong contender for one of the options for best car insurance for teens because of the discounts provided for young drivers. The company offers a youthful driver discount for teens who live with their parents, a youthful longevity discount based on the time their parents have been covered under Erie, and a driver training discount.
The driver training discount is available to those under age 21 who complete an accredited driver training course. Erie also offers a college student car insurance discount based on how often the vehicle is used. Parents and teens may be eligible for between 5 percent and 20 percent total savings on their car insurance coverage, helping offset the cost of adding a teen driver to a policy.
State Farm Insurance
Many drivers entrust their insurance coverage to State Farm, a nationwide auto insurance company that also offers teen driver coverage. Through State Farm, parents may add a teenage driver to a policy through their agent or online, and they have access to several discounts when doing so.
State Farm offers a good student discount worth up to 25 percent off, a driver training discount for participating in an accredited course, and discounts through its Steer Clear and Drive Safe program. The insurance company also reduces car insurance costs for teens each year they age, so long as no accidents take place.
Geico Insurance is also a nationwide car insurer that offers discounts to teen drivers and their parents. The insurer affords teen drivers the opportunity to reduce premiums for car insurance coverage through a good student discount, a safe driving discount, and honor society membership discounts.
Teenagers attending college and taking part in a fraternity or sorority may also receive a discount for Geico car insurance coverage. Geico also offers a simple process for adding a new teen driver, as well as digital tools and a robust mobile app that makes payment, claims, and changes to policies relatively simple.
Another of the best car insurance options for teens comes from Nationwide, a large insurer offering several types of coverage to parents and their young drivers. Through Nationwide, teenagers have access to a good student discount as well as an accident forgiveness program that can save parents and teens a significant amount after the first accident takes place.
The insurance company also offers a SmartRide program that provides more discounts after the first year of coverage. Nationwide makes it easy for parents to add a teen driver to a current policy and gives peace of mind through its 24/7 roadside assistance.
Allstate Insurance also offers teen driver coverage, either as a standalone policy or as an add-on to a parent’s existing policy. Through Allstate, teen drivers can receive discounts for good grades, completing a teenSMART driver education program, and meeting safe driving requirements over time.
Discounts available through Allstate can add up to 35 percent, helping reduce the initial cost of teen driver coverage. Parents and teens have the ability to compare auto insurance coverage options with Allstate online or through a local agent.
Cost of Car Insurance
The cost of car insurance varies widely from driver to driver, but teens or their parents can expect to pay more earlier in their driving life. A married couple adding a teenager to their car insurance policy can increase premiums by 59 percent to 116 percent, according to a recent study conducted by InsuranceQuotes.com. The average increase falls between 80 percent and 90 percent for most new teen drivers.
The significant variation in the higher cost of car insurance coverage is based mainly on the location of the driver and the length of time a policy has already been in place for the parents.
The good news is that the average increase in car insurance premiums for teen drivers has decreased over the last two decades. A study conducted by the University of Michigan Transportation Institute reports that only 60 percent of teens between the ages of 17 and 19 are licensed to drive. In the ‘90s, more than 80 percent of the same demographic had their license to hit the open road.
Because of this decrease, the lower number of high-risk drivers has reduced teen car insurance rates across the board. However, car insurance for teens is still significantly higher than for those with more driving experience.
Why Teens Pay More
The biggest factor impacting the cost of teen car insurance is their lack of driving experience. Having several hours of time behind the wheel does not give insurers much confidence in a teen’s ability to drive without causing an accident.
Older drivers have years of experience, meaning, in theory, that they are better prepared to drive without being involved in a collision. Additionally, car insurers look to an individual’s credit history as an indicator of risk. Because teens have little to no credit history to speak of, insurance companies are often quick to increase the cost of car insurance coverage for young drivers. Being added to a parent’s policy helps with this aspect, but there is often still a surcharge for teen drivers.
In addition to minimal driving experience and no credit history, teen drivers pay more based on their gender. According to AutoInsurance.org, male drivers are considered riskier than female drivers, as they are assumed to take on more risk behind the wheel.
Insurance companies also assume that male and female drivers alike are less likely to wear their seatbelt and more likely to have more passengers on each trip at a younger age. The combination of these factors means that when an accident takes place, the damage will inevitably cost the insurance company more compared to an adult driver.
How to Save on Auto Insurance for Teens
One of the best ways to save on auto insurance for teens is to do some comparison shopping before adding a young driver to a policy. There are countless insurance companies offering teen driver coverage, but the discounts, coverage amounts, and cost of a teen policy vary greatly. Parents and teens should also take a close look at what is required to qualify for certain discounts to ensure the premiums are cost-effective both now and in the future.
Parents can also save on automobile insurance for teens by limiting the driving time of young drivers included on a policy. Some insurance companies offer discounts for drivers who put fewer miles on a vehicle every year. Similarly, selecting a safe vehicle for a teenager to drive helps reduce the cost of insurance coverage. Steering clear of vehicles with high rates of theft is beneficial as well.
Finally, some insurance companies offer devices that track driving habits, like hard braking or speeding. When a teen drives safely and the device is able to collect this data, it can result in discounts on premiums over time.
Teen drivers added to their parents’ insurance coverage or getting insurance on their own will always pay more than an experienced driver with a safe driving record. However, taking advantage of discounts available through the best auto insurance companies can be a significant help in lowering premiums. Shopping around between available insurers also makes a difference in getting the best coverage for the best price when finding a policy as a teen driver.