Teen Car Insurance Rates & Tips

Car insurance rates for teens are 688% higher than the national average. Save more by (1) raising your deductible, (2) finding hidden discounts, and (3) comparing quotes.

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A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Joel Ohman is the CEO of a private equity backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Jo...

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Reviewed by Joel Ohman
Founder & CFP®

UPDATED: Jan 29, 2021

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Here's what you should know...

  • Car insurance payments for teens are higher due to their lack of experience
  • Successfully completing a defensive driving course can lower the cost of your teen’s car insurance
  • Increasing your deducitable by $1,000 or more can also decrease teen car insurance premiums

Learning that a child has just passed the state driver license exam is a frightening moment for many parents. However, the potential hazards of the road don’t concern most optimistic teen drivers.

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Car insurance companies’ statistics conclude that teenaged drivers don’t evaluate risks of the road very well (as witnessed by higher accident rates), according to author David Walsh of “Smarter Parenting, Smarter Kids.” (2011)

What are the accident statistics concerning teen drivers?

Authors Kenneth R. Ginsburg and Susan Fitzgerald report that teens aged 16 to 19 are four times more likely to die in a car accident than all other drivers in “Letting Go with Love and Confidence.” (2011)

According to the authors, fatal car crashes claim the lives of teens more often than any other cause of death.

About 3,000 young drivers (aged 15 to 19) died in 2009 in fatal car crashes. Approximately 350,000 others suffered serious injuries.

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How can teens and their families save money on car insurance?

  • According to author Deborah Taylor-Hough of “Frugal Living for Dummies,” (2011) young drivers should get older, drive safer, and get married! The reason for this humorous suggestion is the way car insurance companies rate driver risks to determine car insurance rates. Older, married, seasoned drivers (ages 30-64) without traffic tickets, moving violations, or car insurance claims pay less for car insurance.
  • Kenrya Rankin of “Start It Up” (2011) recommends that parents evaluate the costs of adding a teen driver to an existing car insurance policy. If insured parents have a good driving history (no record of traffic tickets, moving violations, or accident claims for about five years), adding a good student (check with your car insurance agent for details) to the car insurance policy may be a cost-effective solution for teen car insurance coverage.
  • According to the Fortune Magazine, teenaged male drivers pay heftier car insurance rates than teenaged female drivers. An average teen male driver pays twice as much in car insurance rates as a teenaged female.
  • Kiplinger’s “Personal Finance” recommends that teen drivers demonstrate financial responsibility to qualify for potentially lower car insurance rates. A teen driver with good grades (usually a “B” or better average) and a part-time job (used to pay for car insurance premiums) can qualify for a young driver discount. If the teen driver is included on the family insurance policy, he will probably save additional premium dollars.

What kind of car does the insurance industry want a teen driver to operate?

Check safety and operating statistics offered by the Insurance Institute for Highway Safety. Help your teen driver select a car that costs less to insure, backed up by years of statistics collected about maintenance and safety information rates. Cars that have higher fuel efficiency ratings also help teen drivers qualify for lower rates.

What are other ways to reduce the costs of teen car insurance?

Talk with your car insurance agent about the preferences of the companies she represents.

Enrolling your teen driver in a defensive driving class or driver safety program can help to qualify her for lower car insurance rates.

Some insurance companies like young drivers to read books about safe driving, too.

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How does raising the collision and comprehensive deductible on a car insurance policy help a teenaged driver?

If you’re the parent of a teen driver, increasing your deductible by $1,000 or more can help lower your car insurance rates. A car accident will mean a greater out-of-pocket cost, but banking the premium dollars you’re saving can help to offset costs of a car accident. Increasing the family’s emergency savings fund can also help to defray any accident costs.

If your teen is driving an older (in good condition) vehicle, consider dropping these coverage levels. According to Kelley Blue Book, you could pay more in premium rates than the cost of the vehicle in the event of a total loss.

How can I get a good rate for family coverage?

Make sure to ask your car insurance company about the best overall rates for family coverage. Car insurance costs with one company may be comparatively low, but the company may overweight the costs of adding a young driver to the policy. That’s why comparing car insurance rates is important before adding your teen to an existing car insurance policy!

Now that you’re thinking about car insurance rates, take some time to request FREE car insurance quotes to save you and your teen driver on premiums — type in your ZIP code to get started now!

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