The Best Car Insurance for Teens: Guide

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If you are a teen, learning to drive can be a thrilling adventure. But anyone who must foot the bill for a teen’s car insurance might find the task daunting.

Teens are the most expensive drivers to insure. Because they lack experience – and some like to live on the wild side – a teen driver poses a high risk to car insurance companies than other drivers. That danger is reflected in the premiums charged by car insurance companies.

The nationwide average annual car insurance premium for a 16-year-old is a whopping $3,989. Things get better in later teen years, as a driver presumably gains more experience and is less of a risk. But even at 19, car insurance averages a still-expensive $2,178 annually.

Fortunately, there are things you can do to keep the car insurance rates for teens more affordable. Insure.com looked at some of the leading auto insurance companies and determined which insurers are best for covering teens. In compiling our list, we looked at:

• Average rates individual insurers charge teens
• J.D. Powers Claims Satisfaction ratings
• National Association of Insurance Commissioners complaint ratios
• The websites and offerings of individual insurers

Following is our roundup of where you will find the best car insurance for teens.

Five best car insurance companies for teens

Finding the best car insurance for teens is not a “one size fits all” affair. Some insurers excel in keeping rates low, while others get stellar reviews for providing excellent customer service. So, selecting the best auto insurance for young driver primarily comes down to your needs and priorities.

Following are Insure.com’s top five auto insurers for teens.

Best overall: Progressive

Progressive earns the top ranking in the Insure.com survey of the best car insurance companies for teens. It’s not the cheapest option on our list, but it scores a solid 856 (out of 1,000) J.D. Powers Claims Satisfaction Rating, and its NAIC Complaint Ratio also is strong – 0.67.

If you are looking for the cheapest car insurance for teens, you may want to look elsewhere. At an annual premium of $3,340, Progressive ranks fourth out of the five companies on our list. However, if your teen has traffic violations or accident claims, Progressive’s pricing may rise above the rest.

Progressive offers several discounts that can help reduce the cost of covering a teen driver. In most states, young drivers who maintain a B average or better can save 10% on their rates. And Progressive offers an automatic discount to any policyholder who adds a driver age 18 or younger to a policy.

Best for college students: Auto-Owners

Once your teen is ready to head off to college, consider switching to Auto-Owners insurance. Insure.com ranks the company as the best insurer for college students.

Auto-Owners offers a “student away” discount of up to 25%, which is particularly attractive to families with a young driver going away to college. To qualify, your student must attend school more than 100 miles from home and remain without a vehicle while on campus.

Auto-Owners also offers a Good Student Discount of up to 20% for students who maintain a cumulative “B” or better grade-point average. And a Teen Driver Monitoring Discount is available when teens drive a car with a permanently installed global positioning system (GPS) in the vehicle.

Auto-Owners had the best NAIC Complaint Ratio among the top five insurers in our survey, at 0.42. It also had the best J.D. Powers Claims Satisfaction Rating, at 890.

On the other hand, the average annual premium of $3,270 was right in the middle of our top five.

Best for good students: State Farm

If you have a star student in the house, State Farm might be the right insurer for your teen. The insurer’s Good Student Discount offers a 25% price break to full-time students who earn a B or 3.0 grade-point average or rank in the top 20% of their class.

Homeschooled students must have “qualifying test scores” to be eligible for the discount. The discount lasts even after you graduate from college, up to age 25.

Other discounts include:

• Driver Training Discount. Offered to households when all drivers under the age of 21 complete an approved driver education course.
• Student Away at School Discount. Offered on policies where a student under the age of 25 moves away to school and only uses the car when returning home for school vacations and holidays.

State Farm gets a strong J.D. Powers Claims Satisfaction Rating (881 out of 1,000) and a good NAIC Complaint Ratio of 0.66.

However, its annual premium cost of $3,725 is the highest among our survey’s top five companies.

Best for discounts: Geico

If the car insurance cost for teens leaves you trembling, you want to use all the discounts you can find to bring down that price tag. Geico is Insure.com’s pick for the best auto insurance company for teens in terms of offering discounts.

Geico offers more than a dozen discounts, including a 15% Good Student Discount for full-time students who maintain a “B” average or higher. Honor society, fraternity and sorority discounts also are available.

Geico’s premium of $2,392 is the second-lowest of the Insure.com top five companies. It also gets a solid J.D. Powers Claims Satisfaction Rating (871 out of 1,000).

But Geico’s NAIC Complaint Ratio of 2.04 is the worst of the five companies that made our list.

Note: Due to their limited membership to military members only, we did not include USAA in the top five ranking. However, they would have been one of the top scorers otherwise.

Cheapest car insurance for young drivers under 21

Because the cost of car insurance for young drivers is so high, getting affordable car insurance for teens is a priority for many families. Our Insure.com analysis found that the following 10 companies offer the lowest rates for drivers under the age of 21.

The following annual premiums are based on full coverage 100/300/100 liability, with a $500 comprehensive and collision deductible.

Teenage car insurance average cost per month

Sometimes, it can help to see car insurance costs broken down by the month. That way, it is easier to decide whether an insurer’s premium costs fit within your monthly budget.

Average car insurance for teens – in terms of monthly costs – is as follows:

• 16-year-old – $332
• 17-year-old – $294
• 18-year-old – $262
• 19-year-old – $182
• 20-year-old – $162

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How much is car insurance for male teen drivers?

Parents want cheap car insurance for teens. Unfortunately, car insurance tends to be expensive for all teens. That is especially true for young males.

Young drivers, in general, are more likely to be involved in accidents than more mature and experienced drivers. In addition, males are involved in more accidents – and more serious wrecks – than females. Males also are more likely to drive under the influence of drugs and alcohol.

Costs are exceptionally high at 16, but they tend to drop by the time a driver is 19, as you can see in the following charts of average annual car insurance costs. That’s for an individual policy that includes comprehensive and collision coverage, with liability limits of 100/300/100:

How much is car insurance for female teen drivers?

Car insurance is less expensive for teen females than teen males, but it still is not cheap.

As with males, costs tend to be higher at 16, when the driver is less experienced. As the driver matures and gains more behind-the-wheel experience, auto insurance rates drop. The following charts show the average annual cost of car insurance for teen drivers at ages 16 and 19. That’s for an individual policy that includes comprehensive and collision coverage, with liability limits of 100/300/100:

Best cars for teens

The best car for a teen is one that is safe and dependable. Some cars cost less to insure if you have a teen than other cars. In addition, insurance costs differ depending on whether you have purchased a new or used vehicle.

“The kind of car your teen drives can impact safety, as well as insurance costs,” says Penny Gusner, Insure.com’s senior consumer analyst. “Car experts tend to agree that mid-sized sedans are the best choice for teens.”

She says small cars don’t offer as much protection in crashes. Sporty cars may encourage speeding or recklessness, and SUVs and pickup trucks are more difficult to maneuver and more likely to roll over due to their higher center of gravity.

“Always check insurance rates before you buy a car to make sure your budget works for the cost of the car and its insurance,” Gusner says.

Best new cars for teens

The new cars that will cost the least to insure typically are the same regardless of age – whether you are a teen or a senior or anything in between. Here are the 10 cheapest cars to insure, according to an Insure.com study:

Best used cars for teens

If you prefer to buy a used car for your teen, the best choice is a bit different. In July 2020, Insure.com looked at the 10 best used cars to own when insuring a teen. The list was as follows:

Tips for teen drivers

There is no getting around it: Car insurance for new drivers is expensive, especially when the new driver is a teen. Fortunately, there are several ways to save. They include:

Shop around for insurance. The best way to save on insurance is to shop around and compare rates. Every insurance company uses its own formula for setting rates, so search for the insurer that best suits your needs at the right price.

Assign your teen to the vehicle that will save you the most money. Some insurers assign the driver in the household who is the most expensive to insure to the most costly car to insure, the Insurance Information Institute says. Ask if you can assign your teen to the least valuable car.

Fair warning: If you take this step, your teen MUST drive the least valuable car in all situations except for emergencies.

Encourage your teen to study. Many insurance companies offer discounts for students who maintain a grade point average of “B” or higher.

Enroll your teen in a recognized driver training course. Teens who complete such courses often earn a discount on car insurance.

Take advantage of “away at school” discounts. Many insurers will trim the cost of insuring teens and young adults enrolled in a school at least 100 miles away from home if the teen does not bring a car to campus.

Raise your deductible. This is one of the easiest ways to lower your car insurance bill. As the Insurance Information Institute notes, the higher your deductible, the lower your premium costs.

Chris Kissell

Contributing Researcher

 

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Chris Kissell is a Denver-based writer and editor with work featured on U.S. News & World Report, MSN Money, Fox Business, Forbes, Yahoo Finance, Money Talks News and more.