Car Insurance for Teens and New Drivers: Costs, Discounts and Tips

Short answer: insurance for teen and new drivers costs more because, as a group, they have more crashes. According to the Insurance Information Institute, adding a teenager can raise a parent’s premium by 50 percent or even 100 percent. Good-student and driver’s education discounts, safe-driving and monitoring programs, choosing the right car and comparing quotes can all help lower the price.

Why teen drivers cost more to insure

Insurers price on expected claims, and young drivers crash more often. According to IIHS, the fatal crash rate per mile driven for 16- to 19-year-olds is about three times the rate for drivers 20 and older, and their rate for crashes of all severities is over four times higher. IIHS notes that both age and experience affect crash risk, and that risk is especially high in the first months after getting a license. Ask your insurer how experience and a clean record will affect your price over time.

How much a teen adds

The Insurance Information Institute says adding a teenager to a policy can mean a 50 percent or even a 100 percent increase in the parents’ premium. The actual change depends on the insurer, your state, the car the teen drives, the coverage and the family’s driving records. Ask each insurer for the price of adding your teen to your policy, and if it’s an option, the price of a separate policy, so you can compare.

Discounts to ask about

Good student. Triple-I says this discount is generally available to students with a B average or higher; see the good student discount below.
Driver’s education. Insurers may give a lower rate to young drivers who completed a driver’s ed course.
Safe-driving programs. Many insurers offer programs such as online safety courses, parent-teen driving contracts and practice logs.
Monitoring devices. Some insurers offer discounts to families who use a device or app that monitors how the teen drives.
Student away at school. A college student who lives at school without a car may cost less to keep on the policy; tell your insurer.
Multi-car and bundling. Insuring more than one car, or your home and cars, with one company. See car insurance discounts for the full list.

The good student discount

Some insurers lower the price for young drivers who do well in school. According to the Insurance Information Institute, the discount is generally available to students with a grade point average of B or higher, but each insurer sets its own rules, and not every insurer offers it.

Questions to ask each insurer:

What grades qualify (for example, a minimum average), and are there other ways to qualify, such as class rank or test scores?
Is there an age limit, and does the student need to be enrolled full time?
Does it apply to high school and college students, and to homeschooled students?
What proof do you need, such as a report card or transcript, and how often?
What happens to the discount if grades drop?
Does it combine with other discounts, such as driver’s education or student away at school?

Keep it current. The Kansas Insurance Department reminds families to tell their auto insurance agent every semester when good grades are achieved, since a student may become eligible for the discount. If you don’t send proof, the discount may not be applied.

Choose the car carefully

A car’s price, repair costs, safety record and likelihood of theft all affect the premium, so check insurance prices before buying a car for a new driver. A safer, less expensive car can cost less to insure; IIHS publishes safety ratings that can help you compare.

Graduated licensing and the first year

Every state has at least some elements of graduated driver licensing, which lets teens practice with supervision first and then limits things like night driving and teen passengers for a period after they’re licensed. Rules vary by state; check your state’s DMV. The first months of driving are the riskiest, so supervised practice and following those limits matter.

Keep coverage strong

A new driver is more likely to be in a crash, so consider keeping liability limits high enough to protect your family’s savings and home. See how much car insurance you need.

Compare quotes

Insurers price young drivers differently, so the company that’s cheapest for your household now may not be after adding a teen. You can compare car insurance quotes for your whole household with one form, including multiple drivers and cars.

Frequently asked questions

How much does adding a teen driver increase car insurance?

According to the Insurance Information Institute, adding a teenager can mean a 50 percent or even a 100 percent increase in the parents’ premium. The actual amount depends on your insurer, state, car, coverage and driving records.

Is it cheaper to add a teen to my policy or get them their own?

It depends on the insurer and your situation. Ask for the price both ways, for the same coverage, before deciding.

What grades do you need for a good student discount?

The Insurance Information Institute says it is generally available to students with a B average or higher, but each insurer sets its own requirements, including any age limit or enrollment rules.

How do I get the good student discount?

Ask your insurer what qualifies and what proof it accepts, such as a report card or transcript, and send it. The Kansas Insurance Department advises telling your agent every semester when good grades are achieved.

When does car insurance go down for young drivers?

It depends on the insurer. According to IIHS, crash risk is highest in the first months of driving and is affected by both age and experience. Ask your insurer how experience and a clean record will change your price.

Do I need to add my teen with a learner’s permit?

Rules vary by insurer and state. Call your insurer when your teen gets a permit to ask whether and when they need to be added.

Sources

This guide is general information, not insurance or legal advice. Coverage and requirements vary by insurer and state.