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Car insurance for teens cheap

Getting the minimum amount of car insurance is risky business. However, not everyone can afford a bunch of additional coverage. And, some people might not need anything but the minimum. In those cases, having state-mandated coverage is far better (read: legal) than having no insurance at all.

But how do you find the cheapest rate? I examined over 250 quotes from 28 different companies and found three auto insurers that offer the most affordable policies anywhere in the country. Keep in mind, though, everyone’s individual rates will vary.

Search Affordable Car Insurance Options Near You

Enter your zip code below and be sure to click at least 2-3 companies to find the very best rate.

or call an insurance expert and compare quotes easily over the phone Click to Call 1-800-471-6053 to Get Free Quotes The call is FREE!

Best Cheap Car Insurance Companies

  1. GEICO
  2. State Farm
  3. Progressive

How I Chose the Best Cheap Car Insurance Companies

First, I found the top five to seven insurance providers in each state by selecting companies with above-average customer satisfaction ratings from J.D. Power and high financial strength marks from A.M. Best. Why? Because cheap auto insurance policies are great, but purchasing them from unreliable or fickle insurers could wind up being far more expensive down the road.

Then, with some help from the team at The Simple Dollar, we applied for over 250 quotes both online and over the phone from my pool of auto insurance companies from all 50 states. Each member of the team used personal information during the quote process to ensure that we could see who was consistently cheapest across the country with a handful of scenarios. What did remain the same, however, was the amount coverage we applied for: each state’s minimum coverage. No frills, no extras; just the absolute minimum coverage to legally drive on the road.

Next, I tallied and compared how many times each company had the first, second, or third cheapest yearly premium. I awarded five points for first place, three points for second place, and one point for third place.

As it turns out, the cheap car insurance market is dominated by three main providers: GEICO, State Farm, and Progressive. (The other 25 insurers didn’t even score high enough to register in my test.) And, as you can see below, GEICO was the overwhelming victor.

Insurer # of 1st Place Awards # of 2nd Place Awards # of 3rd Place Awards Total Score
GEICO 19 16 2 145
State Farm 12 14 12 114
Progressive 7 5 3 53

GEICO

GEICO was the cheapest option in 19 of the 50 states. It was also one of the three most affordable options 75 percent of the time, and its best offer was often hundreds of dollars cheaper than the next-best competitor. Take these annual quotes for New York, Pennsylvania, and Washington for example.

New York Pennsylvania Washington
GEICO: $329 GEICO: $225 GEICO: $623
Allstate: $538 State Farm: $394 Allstate: $898

*Note: Occasionally, the reason GEICO was able to beat its competition by such a large margin was because the other insurers required slightly more coverage than the state mandated.

The gecko-loving company is without a doubt the most consistently affordable option out there, so it deserves a shopper’s consideration. And, it’s true, according to my research, it is safe to say that 15 minutes could often save you “15 percent or more” on a state-minimum policy. However, its range of coverages and discounts don’t particularly shine when compared to a competitor like Allstate. Allstate customers enjoy prepay discounts, low-mileage discounts, interior vehicle coverage, and new car replacement — all of which are not offered at GEICO.

When it comes to customer service ratings, GEICO doesn’t have anything to write home about. (It fell just under the industry average according to JD Power.) But, if you’re dead-set on purchasing the least amount of insurance that you possibly need, then GEICO is your best bet.

State Farm

State Farm had a lower overall score than GEICO, but wound up in the top three a total of 38 times (GEICO only placed 37 times). When State Farm placed, it usually fell between $30 to $50 dollars of the competition. Though, it occasionally would surprise me with a GEICO-like rate. The two best examples of this are Minnesota and South Carolina. In Minnesota, State Farm was $120 cheaper than American Family, and in South Carolina it beat GEICO by a whopping $223.

Quotes aside, State Farm is the nation’s largest auto insurer. It ranks consistently well for customer satisfaction and rates above average in most of the regions of the J.D. Power survey. It also earns A.M. Best’s top marks (A++) for financial strength. All that’s to say it is a great choice if you can spare a few extra dollars each month. Plus, it has the best tools of any auto insurance provider out there, including mobile bill pay, mobile claim filing, and a pay-by-bank account option.

Progressive

Progressive only placed 1st in seven states, and when it did, it was usually less than $20 ahead of the runner-up (which was usually GEICO). That doesn’t mean Progressive is never a viable option, though. Consider the state of Montana, where Progressive came in $22 cheaper for the year. So for less than $2 more each month, a Montana driver could take advantage of mobile claims filing, loyalty discounts, prepay discounts, and low-mileage discounts that GEICO doesn’t offer.

Where to Find Car Insurance Discounts

Once you’ve seen some quotes, you need to master discounts — the key to cheap car insurance rates. Many insurers have a wide variety of overlooked deductions that go beyond bundling or insuring multiple vehicles, and some of them are less obvious than you may think.

Driving Schools

Driving education is a discount opportunity many don’t know exist. Drivers who pass an accredited driver’s ed class or defensive driving training are eligible for a sizeable price reduction. The amount of this discount isn’t standardized across the nation or with insurers, but according to DriversEd.com, some drivers might welcome as much as a 10% decrease in their bill. Plus, if you’ve recently received a ticket, enrolling in a defensive driving course can prevent the premium hike on your insurance (most companies only let you do this once every 12 months).

Defensive driving courses cover topics such as traffic laws, drug- and alcohol-impaired driving, and inclement-weather driving and are often available online or at commercial driving schools. Courses for defensive driving can be found through your local DMV or community center. Most run about six hours long and cost anywhere from $50 to $300 a person.

After completing a defensive driving course, participants will receive a certificate that can be presented to insurance companies to qualify for a discount. Depending on the insurance company, drivers may also have to retake the course and be current on their certification in order to continue receiving the discount.

If you aren’t the only person covered on your auto policy, consider getting all the drivers on your policy — especially teens, as they are expensive to insure — to take a defensive driving course and you will be eligible for additional discounts.

Good Student Discounts

These discounts are typically given to drivers under the age of 25 who are enrolled full time at a high school or college or university and are maintaining at least a 3.0 grade point average (or are on the honor roll or dean’s list).

What about the savings? According to CarInsurance.com, the discount can range anywhere from 5% to 10%, making it one of the most profitable and achievable discounts of all. Consider Travelers, which offers good students up to 8% off.

In order to prove satisfactory academic achievement and receive the discount, students need a current transcript or a letter signed by a school administrator. Students who are homeschooled can present standardized test results, such as their SAT or ACT scores, that are within a desired percentile range in order to qualify. Good grades can continue saving you money after graduation as some insurance companies extend this discount to post-grads for a limited time.

If you’re a student, or the parent of a student, you can learn even more at The Simple Dollar’s student guide to car insurance.

Safe-Driver Discounts

Drivers with a clean driving record — a standard that is determined by each individual insurance provider — are eligible for hefty discounts. Having a squeaky clean record not only gives you a discount opportunity; it can also save you a lot more money in the short term.

There is no universal definition of safe driving, though. Insurance companies generally mean avoiding collisions and accidents for which you can be found at fault, and moving violations such as speeding, driving under the influence, or reckless driving.

Resident student discounts

These discounts can be offered to students attending college more than 100 miles away from home. They are intended to be used exclusively by those students who are not planning to drive the insured vehicle while at school but may use it while they are home for vacations.

Other Discounts to Consider

  • Active-duty military and veterans discounts
  • Car alarm systems or other safety equipment discounts
  • Paid-in-full or prepay discounts
  • Occupation and member discounts
  • Low mileage discounts

One of the most important things you can do while shopping is to ask the insurance company for a complete list of discounts because not all may be advertised.

Major Car Insurance Types

Though companies offer several more nuanced options and add-ons, the three major types of auto insurance boil down to:

  • Liability coverage
  • Collision coverage
  • Comprehensive coverage

Liability Coverage

Liability coverage, required by law in most states, covers the other driver’s personal injury and property damage in a crash where you’re found to be at fault. It does not cover your own injuries or property damage. Buying only liability insurance is always going to be your cheapest option, though not necessarily the wisest. (Sometimes it makes sense to carry only liability coverage, and sometimes it doesn’t.)

You’ll probably see your liability coverage written like this on your quote or car insurance policy: $50,000/$100,000/$50,000 (or 50/100/50). That means you have $50,000 in bodily injury coverage for each person, $100,000 in bodily injury coverage total, and $50,000 in coverage for property damage. Each state requires its own minimum amount of liability insurance.

Buying the bare minimum is tempting since it will keep your rates as low as possible. Unfortunately, that’s a bad idea — a bad crash can mean your costs will easily surpass low state minimums, and then you’ll have to pay up. In North Carolina for example, its minimum for bodily injury is $30,000, but the average cost of a non-fatal disabling auto-wreck injury is over $60,000. If you only have the state’s minimum coverage, you could wind up paying over $30,000 out of pocket. And if you don’t have that kind of money laying around, your other assets become vulnerable.

Collision coverage

Collision coverage covers the damage to your car sustained in a crash. This most commonly covers accidents when you’re found to be at fault, but it may also pay in certain circumstances when another driver is at fault, or in scenarios not covered under your other policies.

The cost of your collision coverage will largely depend on your car’s value, but you do control the deductible — the amount you pay out of pocket before your insurance company picks up the rest of the tab.

Comprehensive coverage

True to its name, comprehensive car insurance covers almost any car-related calamity you can think of minus damage resulting from a crash. Instead, comprehensive policies pay for things like auto theft, damage from severe weather, or needed repairs after a late-night rendezvous with a disoriented deer.

Comprehensive coverage is meant to complement collision coverage, not replace it. Like collision coverage, the cost will depend on your car, but you control your deductible.

What types of car insurance do I really need?

Comprehensive and collision coverage seem like a smart choice, but they come with a much heftier price tag than liability-only insurance. If you took out a loan to pay for your car, you probably don’t have a choice — your lender will require proof of comprehensive and collision coverage. Dropping this coverage usually isn’t a good idea for anyone without the savings to pay for repairs out of pocket.

But, there are situations when opting only for liability makes sense. For instance, if you drive an older, paid-off vehicle that you can easily fix or replace, keeping only liability coverage can mean significant savings. Comprehensive and collision coverage may also be overkill on any car you drive sparingly.

To see how much I would save on auto insurance by nixing all coverage but liability, I plugged a few stats into a quote generator. I used the persona of a married male in his early 30s driving a paid-off 2011 Hyundai Sonata. I said he lives in a small Southern city, has a clean driving record, and averages 12,000 miles a year. A policy with 50/100/50 in liability, as well as comprehensive and collision policies with $250 deductibles, would set him back $45 a month. Dropping the comprehensive and collision policies would bring my bill down to just $24 a month — almost half the the cost.

Would I personally drop my comprehensive and collision policies? No, because my 2013 Jeep Patriot is still relatively new and would cost a significant sum to repair or replace. My brother, however, drives a 1984 Ford F150. At best, it’s worth around $3,000 — and his policy is only $19 a month! For him, dropping comprehensive and collision coverage made a lot more sense.

The bottom line: Liability coverage is your cheapest option and meets the legal requirement, but dropping collision and comprehensive coverage might be a risky move if it would be a major financial hardship to fix or replace your car after an accident.

Add-Ons and Other Types of Coverages

There are a number of other coverage types and add-ons, some of which may be required in certain states. Of particular note is personal injury protection, which pays your medical expenses after a crash.

If you’re trying to keep your bill low, personal injury coverage probably isn’t a smart buy as long as you have a good health insurance plan — there would be too much overlap between the two policies.

There are also uninsured and underinsured motorist coverages, which get you off the hook after a crash where the other driver is at fault but doesn’t carry enough (or any) insurance and can’t afford to pay. Other add-ons pay for rental cars while your car is being fixed and for roadside assistance.

As for other little add-ons, consider skipping them. If you can cover the cost of a rental (or borrow a car from a friend while you’re in a jam), rental-car riders are unnecessary, and a AAA membership is often a better deal than roadside assistance coverage if you have an older vehicle.

What car insurance is required in my state?

Each state has different requirements when it comes to car insurance. Many simply require liability insurance (both bodily injury and property damage). Others go a step or two further, requiring add-ons such as personal injury protection and uninsured or underinsured motorist coverage. Visit the table below and locate your state to find your state’s requirements.

According to the Insurance Information Institute, here are the kinds of insurance each state requires as of September 2015, as well as the minimum required amounts of liability insurance. The only state that does not require liability insurance is New Hampshire; however, that state still mandates that you show you have sufficient funds to meet state requirements if you’re at fault in a crash.

Types of insurance required Minimum required liability insurance
Alabama Bodily injury liability, property damage liability 25/50/25
Alaska Bodily injury liability, property damage liability 50/100/25
Arizona Bodily injury liability, property damage liability 15/30/10
Arkansas Bodily injury liability, property damage liability, personal injury protection 25/50/25
California Bodily injury liability, property damage liability 15/30/5
Colorado Bodily injury liability, property damage liability 25/50/15
Connecticut Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist 20/40/10
Delaware Bodily injury liability, property damage liability, personal injury protection 15/30/10
District of Columbia Bodily injury liability, property damage liability, personal injury protection, uninsured motorist 25/50/10
Florida Property damage liability, personal injury protection 10/20/10
Georgia Bodily injury liability, property damage liability 25/50/25
Hawaii Bodily injury liability, property damage liability, personal injury protection 20/40/10
Idaho Bodily injury liability, property damage liability 25/50/15
Illinois Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist 25/50/20
Indiana Bodily injury liability, property damage liability 25/50/10
Iowa Bodily injury liability, property damage liability 20/40/15
Kansas Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist 25/50/10
Kentucky Bodily injury liability, property damage liability, personal injury protection 25/50/10
Louisiana Bodily injury liability, property damage liability 15/30/25
Maine Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist, medical payments 50/100/25
Maryland Bodily injury liability, property damage liability, personal injury protection, uninsured motorist, underinsured motorist 30/60/15
Massachusetts Bodily injury liability, property damage liability, personal injury protection, uninsured motorist, underinsured motorist 20/40/5
Michigan Bodily injury liability, property damage liability, personal injury protection 20/40/10
Minnesota Bodily injury liability, property damage liability, personal injury protection, uninsured motorist, underinsured motorist 30/60/10
Mississippi Bodily injury liability, property damage liability 25/50/25
Missouri Bodily injury liability, property damage liability, uninsured motorist 25/50/10
Montana Bodily injury liability, property damage liability 25/50/10
Nebraska Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist 25/50/25
Nevada Bodily injury liability, property damage liability 15/30/10
New Hampshire Uninsured motorist, underinsured motorist, medical payments 25/50/25 (minimum available in NH, but not required by state law if you show sufficient funds)
New Jersey Bodily injury liability, property damage liability, personal injury protection, uninsured motorist, underinsured motorist 15/30/5
New Mexico Bodily injury liability, property damage liability 25/50/10
New York Bodily injury liability, property damage liability, personal injury protection, uninsured motorist,wrongful death 25/50/10
North Carolina Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist 30/60/25
North Dakota Bodily injury liability, property damage liability, personal injury protection, uninsured motorist, underinsured motorist 25/50/25
Ohio Bodily injury liability, property damage liability 25/50/25
Oklahoma Bodily injury liability, property damage liability 25/50/25
Oregon Bodily injury liability, property damage liability, personal injury protection, uninsured motorist, underinsured motorist 25/50/25
Pennsylvania Bodily injury liability, property damage liability, personal injury protection 15/30/5
Rhode Island Bodily injury liability, property damage liability 25/50/25
South Carolina Bodily injury liability, property damage liability, uninsured motorist 25/50/25
South Dakota Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist 25/50/25
Tennessee Bodily injury liability, property damage liability 25/50/15
Texas Bodily injury liability, property damage liability 30/60/25
Utah Bodily injury liability, property damage liability, personal injury protection 25/65/15
Vermont Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist 25/50/10
Virginia Bodily injury liability, property damage liability, uninsured motorist, underinsured motorist 25/50/20
Washington Bodily injury liability, property damage liability 25/50/10
West Virginia Bodily injury liability, property damage liability, uninsured motorist 25/40/10
Wisconsin Bodily injury liability, property damage liability, uninsured motorist 25/50/10
Wyoming Bodily injury liability, property damage liability 25/50/20

Six Tips to Find Cheap Auto Insurance

Certain factors that affect your car insurance rates are largely beyond your control. These include basic demographics such as your age, gender, marital status, location, and job.
But other factors, including what and how you drive, are easier to change. So, comparison shop, exploit discounts, and consider bundling policies to find the cheapest car insurance companies, too.

Shop Around
It’s a no-brainer, but it always pays to shop around for cheaper car insurance. Instead of wasting time making endless phone calls or filling out the same information on dozens of websites, save time by using an online quote tool. Online quote tools help you get a quick snapshot of potential rates from several auto-insurance companies at once.

More importantly, getting multiple auto insurance quotes helps you avoid becoming a victim to something called price optimization. Price optimization is the devious practice of of establishing rates based upon how much insurance companies think customers are comfortable paying.

Earnix, a pricing analytics platform, found that 45% of larger insurance companies use this tactic to maximize their profits. These insurers mine and analyze a ton of personal data, like credit scores and web shopping habits, to determine how likely you are to leave them for another auto insurance company. The bottom line is this: Auto insurance companies are going to charge you based upon how much money they believe they can comfortably squeeze from your pocket, not who you are as a driver.

Getting new quotes on the regular is the best way to avoid price optimization because, just like other personal data, insurers can see how often you shop around. The more you do it, the less likely they are to risk upping your premium and lose you as a customer.

Search Affordable Car Insurance Options Near You

Enter your zip code below and be sure to click at least 2-3 companies to find the very best rate.

or call an insurance expert and compare quotes easily over the phone Click to Call 1-800-471-6053 to Get Free Quotes The call is FREE!

Bundle Policies
Many car insurance companies will give you a discount if you have other policies with them. For instance, you may get a break on car insurance if you use the same provider for life, home, or renter’s policies. Bundled policies are convenient, too; you’ll be dealing with only one bill and one company.

A note of caution: Don’t automatically assume bundles will save you money. Companies that offer only auto insurance may offer compelling discounts to keep your business. Sometimes that means you get cheaper car insurance if you keep policies with separate insurers.

Boost Your Deductible
Your deductible is what you pay out of pocket before your insurance covers the rest of the cost to fix or replace your car. A plan with a $250 deductible will generally cost more than one with a $1,000 deductible.

For a real-world example, I plugged my mock persona into a quote generator from Progressive, changing only the deductible to see how it would affect my rate. As mentioned earlier, I used a married male in his early 30s driving a 2011 Hyundai Sonata. He lives in a small Southern city, has a clean driving record, and averages 12,000 miles a year.

With a $100 deductible on comprehensive and collision coverage, he would pay roughly $120 a month. Raising that deductible to $250 brought the bill down to about $100 a month. A $500 deductible reduced the monthly bill to $90, and a $1,000 deductible pushed it all the way down to $82. That means he could save $456 a year by choosing the $1,000 deductible instead of the $100 deductible — not a bad sum.

However, raising your deductible is only a good move if you have cash stashed away to pay the higher deductible in case of a crash or other calamity. Also keep in mind that factors such as your age and driving record will affect how much raising your deductible will actually save you.

Drive a Low-Risk Car
Luxury cars are always the most expensive to insure. These cars have the power to go extremely fast, and insurance companies know their drivers are more likely to get into trouble. These cars also cost a lot more to fix and are attractive targets for thieves — all situations your insurance company wants to avoid.

The most expensive 2015 car to insure, the 600-horsepower Nissan GT-R Nismo, will set you back about $3,574 a year in car insurance, according to Insure.com. Right behind it are a slew of high-powered or luxury rides including the Mercedes-Benz SL65 AMG Convertible, Dodge SRT Viper, Porsche 911 Carrera S Cabriolet, and Audi R8 5.2 Spyder Quattro, all of which still top $3,000 a year.

If you don’t have six figures to drop on a car, here’s some good news: Family-friendly vehicles including minivans, sedans, and smaller SUVs cost the least to insure. Their drivers tend to be more careful, ultimately filing fewer claims. These vehicles are simpler to fix and they aren’t quite as tempting for thieves.

The cheapest car to insure, the Jeep Wrangler Sport, will set you back only about $1,134 a year in premiums. The Jeep Patriot Sport, Honda CR-V LX, Dodge Journey SXT, and Honda Odyssey EX-L are similarly easy on the wallet.

Ultimately, the choice is yours, but a less-glamorous ride can help you nab cheap auto insurance.

Change Your Driving Habits
Insurance is all about risk. If you get a speeding ticket every month, your bill will skyrocket. If you’ve had a clean driving record for years, you will have cheaper car insurance. Unfortunately, cleaning up a spotty driving record can take time.

Driving less is the simplest, easiest way to change your driving habits. Consider your options carefully: Can you carpool? Work from home? Use mass transit or even move closer to your job? All of these options can help you save since less time behind the wheel means less chance of a claim. Be sure to tell your insurer about your new habits.

Maintain Good Credit
It may seem unfair, but the vast majority of car insurance companies look at your credit score to help determine your rate. If you have good credit, your insurer assumes you’ll be more responsible behind the wheel. Bad credit means you’re statistically more likely to file a claim, insurers say.

According to consumer advocacy group United Policyholders, a rock-bottom credit score could mean you’ll pay double, triple, or even quadruple over someone with a perfect credit score. This controversial practice is illegal in four states: California, Hawaii, Maryland, and Massachusetts. If you don’t live in those states, you’ll want to work on your credit score in your quest for cheap auto insurance.

It’s Time to Save on Car Insurance

A little legwork now can save you big in the long run, so remember to re-evaluate your car insurance at least annually. Your own changing circumstances and old-fashioned competition between insurers always has the potential to hook you a cheap car insurance policy.

Search Affordable Car Insurance Options Near You

Enter your zip code below and be sure to click at least 2-3 companies to find the very best rate.

or call an insurance expert and compare quotes easily over the phone Click to Call 1-800-471-6053 to Get Free Quotes The call is FREE!

Source


When it comes to teen drivers and car insurance, things get confusing - and expensive - very quickly. A parent adding a male teen to their policy can expect their new rate to run as high as $6,186, and in some cases 227% higher than insuring an adult driver alone, and a teen buying their own policy can be even more expensive. Let us guide you through this decision - discounts, options, special circumstances - so you find the best teen car insurance.

Even though the right answer is usually to add them onto your policy to mitigate some of the cost, there are other options and discounts that can save you money. We did as much of the legwork as possible for you, hunting down discounts and reading the fine print. In the end, you'll need to compare auto insurance quotes using our quote comparison tool to see which company is best for you.

To start at the beginning, simply scroll down. You can also jump directly to your unique situation:

  • Adding a teenager to your car insurance policy
  • Teen buying their own policy
  • How much is car insurance for teens
  • Discounts for teen drivers

Other sections:

  • Car insurance for college students
  • Learner's permit insurance
  • Opt for no coverage savings option

Cheat sheet for Adding a teen and Teen policy

Getting Started: An Easy Primer

  1. Know your timing. Chances are excellent your existing car insurance company will contact you proactively. How do they know? Easy - they probably asked you for the names and birthdays of all the children in your home when you first signed up for your policy. So, if your teenager is 16 or 17 now, they know all about it. If you don't get the call, it makes sense to alert your carrier once your teen gets a learner's permit to talk through your options and to give yourself time to compare car insurance companies. In general, permitted drivers are automatically covered as a part of the parent or guardian's policy with no action needed on your part, but when they do have a true driver's license, even provisional, they will need to be on your policy or get their own.
  2. Get ready to compare quotes. Our research shows that insurance companies all across the U.S. (except Hawaii) use age and experience as a rating factor. It's a fascinating point of difference. In our studies, adding a teen raises your costs anywhere from 100% to more than 200%. However, the rates insurance companies will charge you for adding a teen varies widely, as show in the California Adding A Teen To Your Policy table below. Also,
  3. Understand available discounts. When you add a teenager to your car insurance policy or they get their own, car insurance companies don't actively communicate what discounts are available to you. Use our discount guide below so you're not in the dark.
All 50 states and the District of Columbia now have a Graduated Driver's License (GDL) system, according to the Insurance Institute for Highway Safety (IIHS). GDL programs save lives. A study by the IIHS found states with stronger graduated licensing programs had a 30% lower fatal crash rate for 15- to 17-year olds.

Adding a teenager to your car insurance policy

Adding a teen to your policy is the cheapest way to get your teen insured. It still comes with quite a hefty cost, but you can certainly save if you choose the best car insurance companies for teens. We can help.

How much will adding a teen to my car insurance cost me?

Let's get down to numbers. Every situation is different, but to get a solid snapshot we compared rates in 10 zip codes in each state. The family profile we used owned a 2014 Honda Accord driven by a 40-year old man buying full coverage. Then we added a 16-year old teen to the policy. Here's what happened:

  • The average household's car insurance bill rose 152%.
  • A teenage boy was more expensive. The average bill rose 176%, compared with 129% for teenage girls.
  • California rates rose the most, more than 200%.

The reason behind the hikes: Teens crash at a much higher rate than older drivers - the risk is four times as much. According to the federal Centers for Disease Control and Prevention, the worst age for accidents is 16. They have a crash rate twice as high as drivers that are 18- and 19- years old.

Costs also vary widely by insurance company, which is the reason we suggest shopping for car insurance. It's easy to switch car insurance companies, and we'll provide you the guidance to switch, cancel, and save.

California Adding A Teen To Your Policy Rates by Company

The table shows how much your annual rates will increase when you add a 16-year-old teen.

Company Female Male Average Get a free quote online
Geico $1,632 $1,758 $1,695 Get an online quote from Geico
State Farm $1,394 $2,462 $1,928 Get an online quote from State Farm
Nationwide $2,486 $3,228 $2,857 Get an online quote from Nationwide
Progressive $2,733 $4,223 $3,478 Get an online quote from Progressive
Allstate $3,004 $4,112 $3,558 Get an online quote from Allstate
Farmers $5,024 $9,248 $7,136 Get an online quote from Farmers
Average $2,712 $4,172 $3,442

Methodology

If you've seen enough and are ready to start comparing quotes for teens, dive into our quote comparison tool and see free online quotes from multiple companies within 10 minutes. Start Now

How to add a teen to your policy

If your choosing a new car insurance company after shopping, you should have already added the teen to the policy when first signing up. If you want to add a teen to your current or new policy, follow these steps:

Subrogation in insurance uk car

  1. Call your car insurance company, if they have not already contacted you.
  2. Talk through the changes to your policy in detail, minimum and maximum coverage and insist on hearing the ins and outs of each and every discount. These can add up to considerable savings. If you are also adding an additional car, be sure to ask about a multi-car discount.
  3. Have ready your teen's driver's license information and information about any new vehicles.
  4. Take the time you need to decide. Just make sure your teen isn't driving on a full license without being formally added to your policy or their own. That would be risky.

If my teen gets a ticket, will it raise my rates?

Yes. Once together on the same policy, all driving records - including your teen's - affect premiums, for better or worse. You share in the discounts, and you shall also share in the risk. To understand how a moving violation will affect your rates, we ran a study and found that the additional cost could run from 5% to as high as 20%.

Teen buying their own policy

Can a teen buy their own insurance? Yes. Companies will sell directly to teens, but state laws vary when it comes to a teen's ability to sign for insurance - meaning a parent may have to co-sign - and it's rarely cheaper. In fact, your teen will likely have a higher premium compared to adding a teen to a parent or guardian policy.

But, there are cases where it might make sense for a teen to have their own policy. Progressive cites two:

  • You have a luxury sports car. On a single plan, all drivers, including the teen, are insured against all cars.
  • The teen is eager to be financially independent.

Car insurance is different for a first-time car insurance buyer, but it's a great time to start a relationship with an insurance provider.

How much is car insurance for teens?

Like we've said, teen car insurance is expensive. The younger the driver, the more expensive the car insurance. Young drivers are far more likely to get into car accidents than older drivers. The risk is highest with 16-year-olds, who have a crash rate twice as high as 18- and 19-year-olds. That risk is reflected in the average car insurance rates for teenagers (multiple ages shown for easy comparison):

  • 16-year-old - $3,989
  • 17-year-old - $3,522
  • 18-year-old - $3,148
  • 19-year-old - $2,178
  • 20-year-old - $1,945

Rates not only depend on age, but the company you choose. This table shows the annual rate a teen will receive in California.

Company Female Male Average
Company 1 $2,646 $2,961 $2,804
Company 2 $2,607 $3,472 $3,040
Company 3 $5,613 $8,966 $7,290
Company 4 $2,640 $3,080 $2,860
Company 5 $2,642 $3,454 $3,048
Company 6 $2,030 $2,064 $2,047
Average $3,030 $3,999 $3,515

Note: the specific company names were not mentioned next to the rates but the companies we're showing rates for are, in no particular order: GEICO, Farmers, State Farm, Progressive, Mercury, and AAA.

You'll notice that companies offer widely different rates. Use our quote comparison tool to receive side-by-side quotes from top insurance carriers in only 10 minutes. Get Started

Discounts for teen drivers

We've identified the best discounts for teen drivers to get affordable car insurance, nine to be exact. Most car insurance companies won't reach out to you with discounts, so you must be proactive. Ask and ask again, insisting on as many discounts as you possibly qualify. Discounts can only be stacked up to a certain point though.

  1. Good student discount. A popular discount is tied to doing well in school. This usually translates as a "B" average (3.0 grade point average) or higher. Age limits do exist; typically, the student must be under the age of 25. How much will you save? A recent study by Consumer Reports good student discount averages $263 a year. Liberty Mutual says its Good Student Discount could mean anywhere from 15% to 35% off. Data collected for Insurance.com by Quadrant Information Services shows that the nationwide good student discount is around 12%.
  2. Defensive driving discount. You can take extra driver education or a defensive driving course. This means go above and beyond the minimum state-mandated drivers' education and training. In some states, discounts can run from 10% to 15% for taking a state-approved driver improvement class. Online classes are a convenient option, but check with your carrier first to make sure it will lead to a discount.
  3. Student "away" discount. Most car insurance companies offer a student "away" discount for students who are away at college or living away from home during high school. You could receive a discount around 5% to 10% of the student's premium, but some insurers advertise up the 30% off.
  4. Raise your deductible. A common way to lower car insurance premiums is to raise your deductible, but weigh against the fact that young drivers are more likely to get into accidents. When you get into an at-fault accident, you have to pay the deductible amount. Increasing your deductible from $500 to $1,000 will reduce your annual premium by by approximately $400. You can also drop comprehensive and collision coverage if the car is not finance. Use our auto insurance coverage calculator to find out what coverage people "like you" have.
  5. Skip the red Mustang. Car insurance rates vary widely by type of car. A car with a high safety rating will be cheaper to insure. Use Insure.com's list of 2015 car models to find the cheapest cars to insure. This mostly has to do with the cost of the car, how easy it is to repair, and claim records. Jeeps are the least expensive to insure.
  6. Good driver discount. Keep a clean record and you can receive a discount. This means don't get into any accidents or violations.
  7. Look for unrelated discounts. Review discounts unrelated to teen like a multiple vehicle discount and a home and auto bundle discount for additional savings.
  8. Low mileage discounts. Pay-as-you-drive pay-per-mile insurance can offer a significant discount. Several car insurance companies offer discounts for if you allow a telematics device to be placed in your vehicle so they can monitor your driving habits. This is considered "pay-as-you-drive." This can give up to a 45% discount. With pay-per-mile, you'll pay for the distance you drive, rather than driving patterns. Both discounts are great for teens or families that don't drive very often.
  9. Delay getting a license. This is not really a discount and probably not the a popular option for an eager teen driver, but it's worth considering. An older teen driver is slightly cheaper to insure, approximately 20% cheaper from the age of 18 to 19.
"If a driver qualifies for several discounts, the first discount applies to your original premium and then your second discount to your revised premium and so on," says Joel Camarano, executive director for auto underwriting at USAA in San Antonio, Texas.

Car insurance for college students

College students can follow the same guidance as given to the rest of teens. There is potential to save though. If the student plans to leave their car at home and the college is more than 100 miles away, they could qualify for a "resident student" discount or a student "away" discount, as mentioned above. These discounts can reach as high as 30%. Also, do well in school because that could lead to a good student discount. Both discounts will require you to contact your insurance provider so they can begin to apply the discounts. While your on the phone with them, don't hesitate to ask about other discounts you may qualify for.

And remember, it's easy to shop for car insurance using our quote comparison tool that allows you to see side-by-side quotes. It's a free online tool and only takes about 10 minutes to see rates. Check it out

Learner's permit insurance

You can get insurance with a permit, but most car insurance companies include the permitted teen on the parents' policy without any action. However, the teen should be added to the parents' policy or get their own policy when they receive their driver's license. When that time comes, be sure to visit the rest of this article for guidance on options and discounts. Also, it may be wise to contact your insurance provider for all options available to you. But, as we have made abundantly clear in this article, it's probably in your best interest to shop using our quote comparison tool so you can see side-by-side quotes.

Opt for no coverage savings option

It's possible to tell your insurance company not to cover your teen, but it's not a given. This is called a named exclusion. Through an endorsement to your policy, you and your insurance company mutually agree that the driver is not covered, which means neither is any accident the driver causes. Not all companies allow this, and not all state do either.

Adding a teen driver cheat sheet

  1. Talk to your carrier as soon as your teen gets their license.
  2. Compare multiple car insurance quotes using Insurance.com.
  3. Consider all coverage options. Think about raising your deductible.
  4. Seek out and stack as many discounts as possible.
  5. Talk to your teen early and often about safety.
  6. Insist they drive a safe car.

Methodology: This table shows the average annual additional premium charged for 10 ZIP codes in each state from the following carriers: Progressive, Allstate, State Farm, Nationwide, GEICO and Farmers. Data was provided for Insurance.com by Quadrant Information Services. The premium profile used a base auto insurance price for an owned 2014 Honda Accord, driven by a 40 year-old man with full coverage (100/300/50 liability, plus comprehensive and collision insurance, and a $500 deductible). The additional premium cost was determined by adding a 16-year-old male driver to the base policy. This exercise was repeated for a 16-year-old female.

Source


Everybody wants cheaper car insurance, but how do you actually find it?

Compare car insurance quotes from multiple companies to find the best coverage and price. Focusing solely on the lowest insurance rates is a mistake if you go without the coverage you need, so you should understand how to compare car insurance before making a decision. The whole point of insurance is to stand between you and financial disaster.

However, with a little research, you should be able to find cheaper auto insurance without sacrificing important coverage.

  • Comparison shop
  • Bundle your auto and home insurance policies
  • Raise your deductible but keep it affordable
  • Ask for every discount that applies to you
  • Buy the right type of car
  • Keep a clean driving record
  • Don't buy unnecessary insurance coverage
  • Consider buying just the state-required minimum liability coverage

1. Comparison shop

Sometimes, you'll get the best deal with your current car insurance company. But in many other cases, the road to the cheapest car insurance policy will take you elsewhere.

In general, the more you pay for car insurance, the bigger the difference between insurance companies' rates. Every company calculates its own price, and they often differ by hundreds or even thousands of dollars.

Comparison shopping can help you uncover cheap car insurance companies and auto insurance discounts. How often should you compare car insurance quotes to find the lowest premiums? Experts generally suggest looking around at least once a year -- but certainly at these times, when your rates are most likely to change dramatically:

  • Purchasing a new or different car
  • Combining cars on a multi-car insurance policy
  • Adding or removing a driver
  • Marriage
  • Divorce
  • Moving
  • Adding a teen driver
  • Home purchase
  • DUI or major violation - review DUI insurance
  • Accident
  • Change in credit score

For more information, see "7 reasons your car insurance rates drop."

2. Bundle your policies

You already get cheaper rates if you are married or a homeowner because married people and homeowners tend to file fewer claims. But you can save even more by purchasing your home insurance and auto insurance policies from the same provider.

According to data gathered for Insurance.com by Quadrant Information Services, the nationwide average car insurance discount given for bundling home and auto insurance is 8 percent. By bundling renters and car insurance a discount also applies, with the nationwide average being around 5 percent. The nationwide average homeowners insurance discount given for bundling is 20 percent.

If you insure more than one car on your policy, you get a multi-car discount. Expect 10 to 25 percent savings off your collision, comprehensive and liability premiums.

3. Raise your deductible

Simply raising your deductible from $250 to $500 can lower the collision or comprehensive portion of your premium by about 20 percent, according to the Insurance Information Institute.

Remember, though, that a higher deductible means more money out of your pocket in the event of a claim. Cheap insurance can become expensive fast if you have to pay your deductible with a high-interest credit card. (See "How much can I save by raising deductibles?.")

4. Get all discounts for which you qualify

Is your daughter a straight-A student? You may qualify for cheaper car insurance by obtaining a good student discount. Does your car have anti-theft deterrents? Your insurer may give you a price break because the car is less vulnerable to theft.

Understand all the car insurance discounts you may qualify, so that you can get the cheapest insurance.

5. Buy the right type of car

If you're shopping for new wheels, your choice of automobile can play a big role in getting lower insurance rates. Cars that cost less to repair or replace generally receive lower premiums.

You'll also get better rates if your car has certain safety features. Insurance companies often give discounts for features such as anti-lock brakes, side airbags and automatic safety belts. Anti-collision technology is becoming popular in new vehicles; if your car is equipped with the new tech ask your agent if any discounts are available.

6. Avoid tickets and accidents

A poor driving history can easily disqualify you from getting the cheapest car insurance. Insurers will check your record to see if you present a high level of risk. Speeding tickets, accidents, drunk driving citations – all can drive your insurance rates higher.

Drive sensibly and cautiously and you'll be on the way to cheap car insurance by avoiding surcharges and receiving a good driver discount. (See "How much will a ticket affect my insurance rates?")

7. Don't carry unnecessary insurance coverage

If you have an old beater, reduce your car insurance costs by dropping comprehensive and collision coverage. When should you make this move toward cheaper auto insurance? Many experts say it's time to drop these coverages when the actual cash value you’d receive for your vehicle doesn’t justify the insurance expense. Insurance.com auto insurance coverage calculator>

Have an extra car in the household you can use if yours is in the shop due to an auto accident? If so, skip rental reimbursement coverage.

Also, don't pay extra for personal injury protection or medical payment insurance (if they aren’t required by your state) if your family already has a good health insurance plan.

8. Consider buying just the state-required minimum liability coverage

One way to get the cheapest car insurance available is to buy “bare bones” coverage, which typically is liability insurance at the lowest legal limits required by your state to legally drive a car. If you cause an accident, it pays for others’ property damage and medical bills and that’s it. It's important to remember that if you cause even a minor accident, minimum liability coverage probably won't be enough to pay for all the damage. That means you'll be paying out of your own pocket. Still, if you want to save money and your car is old or you don't drive much, it is one path to lower rates.

Liability limits are usually written like this: 30/60/25. In this example, using Texas minimum requirements, the numbers show coverage that would pay:

  • medical expenses of up to $30,000 per person
  • medical expenses up to $60,000 per accident
  • up to $25,000 for property damage

Here are average annual rates for the cheapest car insurance coverage in every state, according to a rate analysis by Quadrant Information Systems for Insurance.com.

Minimum car insurance rates by state

StateMinimum car insurance requirementsMinimum car insurance average rate
Alaska 50/100/25 $426
Alabama 25/50/25 $638
Arkansas 25/50/25 $616
Arizona 15/30/10 $600
California 15/30/5 $723
Colorado 25/50/15 $646
Connecticut 20/40/10 $1,097
DC 25/50/10 $1,054
Delaware 15/30/10 $1,520
Florida 10/20/10 $1,058
Georgia 25/50/25 $743
Hawaii 20/40/10 $386
Iowa 20/4015 $403
Idaho 25/50/15 $546
Illinois 25/50/20 $543
Indiana 25/50/10 $633
Kansas 25/50/25 $526
Kentucky 25/50/10 $607
Louisiana 15/30/25 $909
Massachusetts 20/40/5 $866
Maryland 30/60/15 $958
Maine 50/100/25 $513
Michigan 20/40/10 $2,446
Minnesota 30/60/10 $864
Missouri 25/50/10 $506
Mississippi 25/50/25 $639
Montana 25/50/20 $467
North Carolina 30/60/25 $385
North Dakota 25/50/10 $512
Nebraska 25/50/25 $472
New Hampshire 25/50/25* $587
New Jersey 15/30/5 $1,086
New Mexico 15/50/10 $612
Nevada 15/30/10 $641
New York 25/15/10 $891
Ohio 25/50/25 $579
Oklahoma 25/50/25 $712
Oregon 25/50/20 $1,007
Pennsylvania 15/30/5 $560
Rhode Island 25/50/25 $1,026
South Carolina 25/50/25 $654
South Dakota 25/50/25 $431
Tennessee 25/50/15 $656
Texas 30/60/25 $783
Utah 25/65/15 $629
Virginia 25/50/20 $536
Vermont 25/50/10 $487
Washington 25/50/10 $671
Wisconsin 25/50/10 $578
West Virginia 25/50/25 $669
Wyoming 25/50/20 $410

Methodology: The table shows the average annual rate of 10 ZIP codes in the state for minimum coverage from the following carriers, in no particular order: Progressive, Allstate, State Farm, Nationwide, GEICO and Farmers. In some states, uninsured motorist coverage and/or personal injury protection coverage is mandatory in addition to liability. For those states, these coverages are included in our average rate shown in the chart, though we list just the state minimum levels for liability. Data was provided for Insurance.com by Quadrant Information Services. New Hampshire doesn’t require drivers to have car insurance, but most drivers do, and we’ve listed what is mandated if you choose to carry coverage.

Watch for pitfalls in coverage

You can only go so far with discounts and comparison shopping. Some carriers can provide you a lower rate, but they do it by limiting coverage in ways you might regret in the event of an accident.

For example, some companies limit coverage of permissive drivers or don't cover them at all. That is, if you lend your car to a friend who has an accident, your liability limits might be reduced or the claim might not be honored. The same discount policies might not extend to a rental car, as standard policies do.

Source

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