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    Everything You Need to Know About Teen Car Insurance

    How can I make the cost of insurance for a teen driver more affordable? Should I put my teenager on my policy, or should they get their own? And when do insurance rates for teen drivers finally go down?

    Teen and her mother in the car on a sunny day. Photo: Getty Images

    When a teenager starts driving, as their parent or caregiver, you want them to make good decisions and stay safe behind the wheel. Unfortunately, if you pay for their policy, you also need to plan for a big increase in the price of your car insurance premiums. (Check out the cheapest car insurance companies.)

    According to research—and insurers—teens are generally riskier drivers, due to their inexperience and other factors. As a result, their monthly or annual insurance premiums will be more expensive than those of an older and more experienced driver. While parents, caregivers, and driving instructors should help teach teen drivers to stay safer on the road, the experts at Consumer Reports can help you make insurance policy choices that could save thousands of dollars each year.

    "Parents can save on teen driver insurance by shopping for the best rates, bundling their auto and homeowners’ policies, raising deductibles, and choosing a safe and affordable car that is less costly to insure," says Chuck Bell, programs director for advocacy at Consumer Reports. But there are also specific discounts and choices that can help you save even more. To get you started, we will answer some frequently asked questions about auto insurance and coverage for teenage drivers.

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    Why Is Car Insurance So Expensive for Teenagers?

    It’s simple math. Teen drivers are more likely to get into a crash that an insurance company has to pay for, so insurance companies make up for potential losses by charging higher premiums.

    According to data from the National Highway Traffic Safety Administration, in 2021, only 5.1 percent of licensed drivers in the U.S. were aged 20 and under, but they were 8.5 percent of drivers in fatal crashes and 12.6 percent of drivers in all crashes.

    Does a Teen Driver Need Their Own Car Insurance Policy or Should You Add Them to Your Policy?

    As soon as your teen reaches driving age, call your insurer and ask how much it would cost to add them to your policy. As with all car insurance policies, loyalty doesn’t pay. You might end up getting a much lower rate if you shop around and get quotes from other insurers. According to CR’s 2024 auto insurance survey, drivers who switched insurers in the past five years saw a median annual savings of $461.

    So, should you get a teen driver a separate insurance plan? Generally, no. According to the Insurance Information Institute (III), a trade group for insurance companies, it usually costs less to add a teenager to an existing policy than for them to have their own policy. A CR analysis came to a similar conclusion.

    How to Pick the Right Car

    It might be tempting to buy a new teen driver an inexpensive car. That may save money up front, but older cars aren’t as safe as newer models. From an insurance company’s standpoint, this may also make some older cars more expensive to cover than newer and likely more expensive vehicles. 

    Still, buying used instead of new can be a good way to save. If you’re shopping for a vehicle for a young driver, check CR’s specific list of the best used cars for teens. If it’s an option, it can also be a good idea to just share a car within the driver’s household. Not only will a family car typically be newer and have more safety features, but you won’t have to add another vehicle to your policy.

    How Much Coverage Does a Teen Driver Need?

    You might want to save money by skipping collision or comprehensive coverage, but remember that teen drivers are statistically more likely to crash. More specifically, the III says parents of teen drivers should never skimp on liability insurance, which pays for damage or injury to others. Driving without liability insurance could expose the driver and parents to the risk of a lawsuit if a crash causes damage or medical expenses that exceed your coverage. The III recommends a minimum liability coverage of $100,000/$300,000/$100,000. Depending on the value of your home and other assets, you may also want to ask your insurance agent about an umbrella policy.

    In states where it’s allowed, you may be tempted to exclude a teen driver from your policy for the time that they’re away at college. But credit rating agency Experian warns that if an excluded driver ever borrows your vehicle and gets in a crash—say, during a holiday break—both the driver and policyholder could face serious and expensive consequences that could include policy cancellation, fines, and even jail time.

    What Are Some Ways to Lower Car Insurance Costs for Teens?

    In some states, insurers offer discounts for students on the policy (under age 25) who have good grades. Discounts vary by state, but they can be in the hundreds of dollars per year.

    MORE ON SAFETY

    Student driver training is a good idea for teaching an inexperienced driver the rules of the road, but don’t count on major discounts. Depending on where you live, approved safe-driving courses vary widely in price and might save you less than $100 per year, depending on where you live.

    Telematics systems that track how a car is being driven are available in some states and can offer discounts for safe driving habits. The 2024 auto insurance survey showed that policyholders who used their current insurer’s telematics device saved a median of $120 on their annual premiums. However, you have to be okay with giving up a certain amount of privacy, allowing your insurer to track your every move in much the same way that you do when using certain smartphone apps. Remember that these systems only give discounts for good behavior, so there’s no guarantee that a young, inexperienced driver will save money.

    How Does a Teen's Driving Record Impact Insurance Rates?

    In some states, teenagers have graduated licenses that restrict when they can drive and/or how many passengers they can carry. Compared with drivers with full licenses, graduated license drivers may also face higher fines or stricter penalties for violations such as speeding, driving to endanger, or driving under the influence of alcohol or drugs. Breaking any of these rules may lead an insurer to cancel a young driver’s policy or raise the premium significantly.

    When Does Car Insurance Get Cheaper for Teens?

    The good news is that costs for a safe teen driver can only decrease. According to the National Association of Insurance Commissioners, in some states, young drivers may see their premiums drop when they graduate from high school or turn 18. Premiums will also likely go down with every year of safe driving. According to an analysis from insurance site ValuePenguin, premiums drop by 16 percent at age 19, 17 percent at age 21, and 11 percent at age 25.


    Keith Barry

    Keith Barry has been an auto reporter at Consumer Reports since 2018. He focuses on safety, technology, and the environmental impact of cars. Previously, he led home and appliance coverage at Reviewed; reported on cars for USA Today, Wired, and Car & Driver; and wrote for other publications as well. Keith earned a master’s degree in public health from Tufts University. Follow him on BlueSky @itskeithbarry.bsky.social.