It is quite natural for teenagers to have a desire to get behind the wheel and learn new skills. After all, they want to try something new at this age, get bright emotions from new hobbies, and boost their self-confidence. However, teen driving is among the most common reasons for parent anxiety. Taking responsibility for finding an institution where children will learn to drive and finding the best teenage car insurance can help to reduce anxiety and become a role model for young drivers. Many different companies provide this service. However, you will have to pay much more for the services than the usual car insurance for new drivers. That often becomes a problem for many parents since the difference is significant. But, as a parent, you should not cancel your young driver’s dream. You just need to learn about the specific features and find the most profitable offers.
How Much Does Teen Auto Insurance Cost?
Any insurance expert will confirm that the price of car insurance for teens is very high. A study by the South Carolina Department of Insurance indicates that the cost of family insurance increases by approximately 152% when a teenager’s policy is included. Usually, such numbers refer to young drivers aged 16-17. The difference can be significant if you compare these numbers with the same indicators in the insurance of 25-year-old drivers. In most cases, car insurance for teenage drivers is twice as expensive. Here are some rough estimates for comparing the cost of policies for teenagers and older drivers:
|The average monthly price of the policy, in dollars
Considering these indicators, the highest price of car insurance for young drivers is at the age of 16. Over time, it may decrease, but not in the coming years, and significant changes can be expected only at the age of 24-25. Of course, such indicators may surprise some parents, but it has a very simple explanation. When calculating the cost of teenage auto insurance, companies take into account many factors. Age is also one of them. Young drivers with little experience are more likely to get into accidents and cause traffic accidents. This means that the probability of payment by the insurance company increases significantly. That’s why experts calculate such a high cost for insurance policies. Considering these circumstances, it’s clear why the highest cost of auto insurance for teen drivers at 16 is the highest. According to this principle, the cost decreases with age and the acquisition of relevant experience. A driver with 9 years of driving experience is well-versed in rules and regulations.
The Top Providers Of Automobile Insurance For Young Drivers
In the United States, car insurance services are very common. They can be found in many companies. However, the large selection of offers can be a problem. Therefore, it’s difficult for parents to choose the best auto insurance for teens. To simplify your task, choose several of the most popular and proven companies and then compare the conditions. It is worth starting with the following options.
If you are interested in affordable and reliable teen auto insurance, you can consider Geico’s offers. The company’s services are available in the District of Columbia and all other states. In addition, customers can expect various types of discounts (there are more than 16 of them here). The company offers auto insurance for new drivers with standard coverage options and additional solutions. Among them, you can single out insurance for mechanical breakdowns, compensation for damages for a rented car, and the possibility of emergency assistance on the road. Users can also use a special application. The main advantages of the company include:
- Universality (car insurance for teenagers can be issued in any corner of the country)
- Comprehensive coverage offers, including high-risk drivers
- The lowest values of average rates
However, the extended system of discounts is especially valuable for customers. It includes 16 different offers. For example, owners of teen car insurance can count on discounts in the case of passing defensive driving courses, good driving, good grades for studies, etc. The average annual payment is approximately $2,700. The disadvantages include fewer branches that are used to receive personal services.
Parents interested in new driver car insurance should also consider the well-known company State Farm. It ranks first in customer ratings. That’s not surprising because the company provides many benefits and favorable conditions. It’s worth starting with State Farm since it offers the most affordable auto insurance for teens with full coverage. This is one of the reasons why the company receives many positive reviews. Customers can count on additional savings solutions. For example, you can use the Steer Clear program. It provides savings in case of taking special safety courses. Student discounts will offer additional benefits, but that’s not all. Choosing auto insurance for teenagers from State Farm, customers receive several advantages:
- Profitable offers for conscientious drivers
- Good reputation
- Affordable cost
Average pay rates are approximately $2,700–$2,800. Compared to the offers of other companies, such numbers are quite acceptable. In addition, it is worth highlighting the versatility. You can take out cheap car insurance for young drivers at State Farm in any of the 50 states. As for discounts, the company also has many favorable offers for customers. There are about 13 favorable offers. Among them are those related to safe driving, following the rules, good training, and other situations. The company also has some drawbacks, including NAIC’s high complaint rates.
That’s another popular company that offers the best car insurance for young drivers on favorable terms. Some customers may think it’s not the case since the cost of contributions is higher here. Indeed, you will need to pay about $3,500 per year for the policy. However, this fully justifies several significant advantages provided by the company. The first is the multitude of options for regulating policies and conditions for young driver’s insurance. Among the additional conditions of the policies, it’s possible to highlight the forgiveness of road accidents, assistance on the road, as well as the disappearance of the franchise. In addition, car insurance for teen drivers from Nationwide provides for the use of a special SmartRide program. It provides certain rewards for safe driving. This application allows you to save on the payment of the policy significantly. You can also save by combining it with other insurance products. If we consider the general advantages of the insurance company, we can distinguish among them:
- Low average payments for car insurance for young drivers with full coverage
- Availability (you can use the company’s services in 47 states and the District of Columbia)
- Extended system of discounts
It’s also worth noting the company’s high position in national ratings. Hundreds of customers across the country are satisfied with Nationwide’s services.
You can also find the best insurance for young drivers at the specialized USAA company. It provides services only for military personnel and their families. The benefits of insurance products can be used by active military personnel, discharged with honorable supplies or retired, as well as discharged generals under honorable conditions. Family members can also take advantage of all the available opportunities, and membership can be inherited. One of the company’s products is young driver car insurance provided on favorable terms. The main advantages include:
- High ratings regarding financial stability
- Good reputation
- Affordable average annual rate (about $2,500)
- High level of customer satisfaction
An additional advantage is wide coverage. That means that teenage driver insurance is available in 50 states. In addition, offers are also valid in seveal other countries. The company created a special application to improve the convenience of using services, and all customers can use it. The only downside of USAA is that insurance products are only available to a certain group of people, namely the military.
Teenage Car Insurance By Gender
When considering teenage car insurance’s average cost, you can notice one interesting fact: female teenagers usually pay a little less. The same trend is observed in adulthood. This situation is not due to prejudice, as some people might think. Source: Trusted Choice In the formation process, insurance companies pay attention only to possible risks. After they determine them, the calculation of the cost of car insurance for a new driver begins. When it comes to gender, companies are usually driven by statistics. According to the World Health Organization, young men and boys face a significantly greater risk of being involved in fatal traffic accidents than their female counterparts. Namely, those under 25 are almost three times as likely to be involved in an accident, leading to injury-related death. Statistics are the main reason why the rates for young male drivers are often higher than for young girls. However, it’s not common for all insurance companies. Some set the same rates for car insurance for teenagers of both sexes. Let’s look at numbers that prove it.
|The average amount for men
|The average amount for women
Based on this information, the annual rates for men and women differ. But the difference is insignificant and also persists in adulthood.
Teenage Vehicle Insurance Rates On A Per-coverage Basis
Parents usually look for the cheapest car insurance for teens, which wouldn’t significantly affect the family budget. However, rates for young people in all companies are quite high. Approximate numbers can be found in the example of a 20-year-old driver with a clean driving record and good credit history. If you choose insurance for new drivers with the minimum required coverage, the cost will be approximately $1,500. If you choose a policy with full coverage, the amount will be $4,400. In the presence of certain factors, these numbers can increase. For example, if the driver was involved in one accident, auto insurance for teenage drivers with minimum coverage can increase to $2,000, and full coverage – up to $5,600.
Average Teen Driver Auto Insurance Rates Per State
Each state has different offers from insurance companies. The average value is $58-$60 per month. If we consider the most expensive and cheapest auto insurance for teens, the indicators are $196 and $28-$29 per month, respectively. The first higher tariffs are common for the state of Michigan, and the cheapest are in South Dakota. However, there are other states where you can find the cheapest car insurance for young drivers, including:
- Vermont: Companies in this area offer policies for $30-$33 per month. This indicator is almost half of the average numbers.
- Wyoming: This is another state where rates are significantly lower than the US market average. Here, a policy for teenagers can be purchased for $31-$32 per month.
- Iowa: To purchase cheap car insurance for teens, you can contact any company in the state. They set rates at $34 per month.
North Dakota completes the list. In this area, the rates of automobile policies are kept at $34.
How To Find Affordable Adolescent Auto Insurance
To choose cheap car insurance for young drivers, you need to study the conditions of several companies in detail. This will allow you to compare the cost and choose the best solution. It’s generally recommended to start with reputable companies. When considering their offers, you should pay attention to discounts. Here are some examples:
- Discounts for safe driving: Getting cheap auto insurance for teens is enough to show excellent skills in practice. Some programs involve devices that monitor driving behavior and make it possible to draw certain conclusions. If you drive according to the rules, you can get a discount.
- Student discounts: If the teenager will not have active driving during the training, it is possible to take out a more profitable new driver’s insurance. However, this should be discussed with the company.
- Discounts for low mileage: This is a general offer that teenagers can also use.
In addition, you can save thanks to good grades in an educational institution. Some insurance companies offer discounts in this case.
Auto insurance for teens is a must for those who want to start driving at a young age. Naturally, insuring a teenage driver can be an expensive endeavor. Still, parents may benefit from taking advantage of the lower rates offered by providers or adding their teen to their policy. To save money and ensure your young one is properly protected with appropriate coverage levels, it pays off to shop around for competitive quotes before making any decisions.
Frequently Asked Questions
From what age can teenagers count on a reduction in car insurance rates?
The highest tariff rates are used for customers aged 16 years. Every year, this number will decrease by about 9%, and a significant reduction is possible no earlier than the age of 25.
Why is car insurance for teenagers so expensive?
This is due to high risks for the insurance company. After all, according to the methodology, young inexperienced drivers often get into traffic accidents. Consequently, companies will need to make payments with a high probability.
What is the cost of car insurance for teenagers?
Companies currently offer policies with average annual rates starting at $2,200 and average monthly rates around $58.
Victoria Berezhetska is a Content Lead at Phonexa.com and an expert contributor to American REIA. She has a Bachelor of Science degree in Business Administration, with extensive working experience as a PR specialist and content writer. At American REIA, she helps customers find the right educational material through easily digestible blog posts and buying guides backing their insurance coverage choice. Victoria covers diverse topics around digital and insurance marketing, including auto, home, health, and life insurance.