How Much Is Car Insurance For Teens In 2024?

Getting a license is a milestone all teenagers dream of. As we get older, we realize it costs money to not only own a car but have that vehicle on the highway; this includes having auto insurance. As an insurance specialist, I have helped many families gain insight into what teens need to get into their new rides.

Through this guide, I aim to help you find the best car insurance for your teen and help them get on the road without breaking the bank.

Average Cost Of Teenage Car Insurance – By State

The insurance cost for a teen will vary depending on where you live, the policy you purchase, if you include them on your policy or purchase their own, and their gender.

Each state has its minimum coverage requirements. Our table below is the average monthly premium based on those requirements with a $500 deductible. The numbers below will depend on the insurance company you select and do not reflect the cost of every company; it is just the lowest premium for each male and female in that state. The profile we are using is an 18-year-old with a clean driving record.

As you can see, in nine states, the premium for male and female teens is identical. This is due to state laws that prohibit insurance companies from charging higher rates between male and female drivers. Some laws prohibit insurance companies from rating using age. This can benefit drivers in California, Hawaii, and Massachusetts.

Car Insurance Rates For Teenagers On A Parent’s Policy

A Forbes study revealed the average cost of car insurance for teenagers can be lowered when they are added to a parent’s policy, however, there is still an increase in the overall cost of insurance.

Our base cost is an average cost for a married couple of $2948.

*This study is for two parents and one teen.

Car Insurance Rates For Teenagers On Their Own Policy

When a teenager elects to go on their own, they will see a price difference. If they shop around and use the discounts afforded to them, they may be able to find a rate that can be manageable.

Here are a few companies and their insurance rates for teenagers on their own:

Top Car Insurance Companies For Teenagers

We have reviewed the top car insurance companies for teenagers and rated them based on the average cost of car insurance and the features they offer our younger generation.

USAA

This is one company that will always have the best rates, but there is one catch. You must have a military affiliation. A family member must be active or retired from any branch of the armed services to obtain affordable car insurance for teenagers. However, if you fall into this group, you will be well covered.

USAA offers these teen discounts:

• Good Student
• Safe Driver
• Drivers’ education discount
• Defensive driver discount
• SafePilot – Usage-based
• Policy bundling

For a teen on your own you can expect great customer service. They ranked 9.5 out of 10 on Zebra’s survey of companies people are most likely to recommend. They have an average monthly premium of $327/mo. for teens. They also offer accident forgiveness, which can help a teen who has had a mishap. To be helpful, you remain incident-free for five years for the accident not to count against you.

State Farm

State Farm has many teenager discounts these can include:

• Usage-based – Drive Safe & Save
• Vehicle safety features
• Good Student
• Steer Clear driver safety program.
• Driver training discount
• Student Away discount
• Twenty-three percent home and auto bundle discount

State Farm receives three stars from Forbes Advisor, the company has a low complaint level. State Farm also received an 885 from JD Power for overall Customer Service Satisfaction. Teens will spend on average, about $431/mo. They also have vehicle-specific discounts such as passive restraint, anti-theft, and newer vehicle safety.

Geico

Geico offers teenage drivers discounts:

• Good Student
• Safe Driver
• Drivers Training discount.
• Student discounts tied to school organizations.
• Usage-based – DriveEasy
• Military Discount

Geico has an A+ Superior financial strength from A.M. Best for their ability to pay out claims. The average cost for your teen will be $339/mo. Don’t forget to add Roadside Assistance, your teen may need it one day if they get locked out of the car or a jump start.

Nationwide

Nationwide gives teenage drivers these discounts:

• Usage-based – SmartRide
• Safe Driver
• Good Student
• Driver safety course discount
• Student Away discount
• Fifteen percent home and auto discount

JD Power scores Nationwide an 858 on their Customer Satisfaction Index Ranking. They also offer the best user-based telematic discount based on your driving habits at up to 40 percent. The average cost of car insurance for teenagers is $404/mo. Nationwide also offers GAP insurance; this helps pay off the difference between what you owe on the car and what the car is worth should you total it in an accident.

Allstate

Allstate offers car insurance for teenage drivers and these discounts.

• Usage-based – Drivewise
• Usage-based – Milewise
• Safe Driver
• Good Student
• Driver safety course discount
• Fifteen percent home and auto bundle discount

With Allstate, teens will pay an average cost of $602/mo. This premium can drop once you turn twenty should you remain accident-free. The average cost in your twenties can be about $272/mo. Allstate helps with two features, diminishing deductible where each policy period without a claim, your deductible is reduced. They also have accident forgiveness as an add-on feature.

Discounts For Teenage Car Insurance

There are ways to assist with the average cost of car insurance for teenagers. Most insurance companies offer discounts for teenage drivers. Discounts can vary by provider. It is best to shop around and see which offers the best discount for your situation.

Discounts insurance companies offer are:

Good Driver

As a new driver, you are still learning the rules of the road. Also, as a NTHSA study has shown, many teenagers can be immature behind the wheel, ignoring the rules of the road. This leads to more traffic incidents and fatalities. Between 2013 and 2022 there was a 30% increase in fatalities between 15 and 18-year-olds. Obeying speed limits and city and county ordinances not only can save lives, but they can also help insurance rates from increasing.

Good Student

Most insurance companies have a Good Student discount. Most are for maintaining an average above 3.0, but it can vary by carrier. Regular reporting through transcripts is required.

Family policy

There is a discount for a teenager who has their own car to have them on your insurance policy rather than them having their own. A family insurance policy can often lower rates because it brings a multi-car discount.

Defensive Driver

Taking a Driver’s Education course before you obtain your license is common in some states. With some insurance companies, going above and beyond and taking an additional Defensive Driver course can lower a teenager’s insurance premium.

Telematics

This is a device that plugs into your car and transmits information to your insurance company as to miles driven, average speed, and if one drives in heavy traffic day to day. It can tracks driving habits, like hard breaking. This can qualify you for discounts; it can also disqualify you for unsafe driving.

Training course

Having the basic know-how on the road can enable a teenager to be more cautious on the road. A training course not only will instill proper knowledge, it can bring a discount percentage.

Discounts for teenagers can continue even after they leave for college. On-campus students can leave their car at home, and this receives a discount.

How To Save Money On Teenage Car Insurance

Just like adults, teenagers can save on their car insurance in various ways. It’s good to begin to teach them to look for ways to save.

Auto Bill Pay

This helps in two ways. First, you can save money by having monthly payment taken directly out of the account of your choosing. Second, you won’t worry about lapses in coverage because of missing your payment date.

Paid In Full

Many carriers will have a pay-in-full option that reduces your cost. It can reduce your payment by a percentage or even give you a month for free.

Bundling

Just as multi-car insurance can help you save, multi-policy can reduce your premium. If you have homeowners or renters’ insurance or another insurance type, consider placing all your policies with the same company. This can give you a bundling discount.

Annual Mileage

Your car insurance premium can increase based on your miles driven. You can also save if you keep your mileage below certain limits. Check with your insurance provider to see if they offer mileage discounts.

Not all insurance companies offer every discount. It is best to shop around and see which offers the best discounts that help lower the average cost of car insurance for your teenager.

Factors Affecting Cost Of Car Insurance For Teens

Starting out as a teenager, the average cost of car insurance is going to be high, regardless of any factors. It is how car insurance for teens works. Here are the main factors that affect insurance rates:

Location

Where you live will be a major factor with insurance cost. Insurance in Hawaii will be much cheaper than the cost of insurance for a teenager in Florida. Counties within each state will fluctuate as well.

Inexperience

Time on the road, not only in age but time behind the wheel can affect your insurance rate. This is especially true if you use a telematic device. A safer driver can save more on their insurance. Experience behind the wheel helps drivers be safer.

Male vs Female

There are only nine states where a driver’s gender can determine car insurance rates for teenagers and adults. The other forty-one can see a tremendous swing just because the company sees a greater risk due to the driver behind the wheel.

Age

Only three states can’t use age to determine rates. California, Hawaii, and Massachusetts do not rate teens and the average cost of their car insurance.

Traffic Incidents

As with any age, any type of incident behind the wheel, your rates will increase. However, as a teenager, your average cost of car insurance can be affected to a greater degree as your risk is now that much greater.

Under normal circumstances, without any infractions, the average cost of car insurance for a teenager will begin to decrease once a teen reaches nineteen and then onto adulthood. The next bump comes when they reach twenty-five.

Why Is Car Insurance For Teens So Expensive?

Many teenagers experience the excitement of being behind the wheel. They make unwise decisions, and peer decisions; this inexperience is what many insurance companies base their rates on. It can also be factors like a recent NHTSA study that showed in 2021, 2116 teens died in auto-related incidents.

This was an 11% increase over the previous year. Insurance is about risk; teens produce risk. The older a teen becomes, the more experience they gain behind the wheel, and the less risk they pose, especially when they drive incident-free.

Car Insurance Coverage Types For Teens

All teens are required to carry the same insurance as adults with the two basic types: Bodily Injury and Property Damage. Bodily Injury, or BI, is intended to pay for medical expenses for those you injure in an accident. Property damage is to pay for the damage caused to the other party’s property when you are at fault. State laws may also require one to carry Uninsured/Underinsured Motorists.

Some beneficial insurance add-ons for teens can be:

Roadside Assistance

In the event of a breakdown, this benefit can send roadside service to your location to give a jump start or to fix a flat. Towing and labor can also be an add-on service for teens to save on repair costs.

Rental Reimbursement

If your primary car is being fixed, and you rent a car while you wait. Your insurance policy will give you a specified dollar amount depending on what is outlined in the policy.

GAP Insurance

Cars depreciate the moment you drive off the lot. If you are in an accident and your car is totaled, GAP insurance will pay the difference between what the insurance company says the car is worth and what you still owe on the vehicle.