The Best Car Insurance Companies for Teenage Drivers

Car insurance is a major expense, but it is even more costly for teen drivers. While every young driver is on the lookout for low auto insurance rates, they should also be concerned with the ratings of their car insurance company.

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There are many different ratings to look at to determine the worth of a car insurance provider. It is important to find high ratings in as many areas as possible. Sometimes that doesn’t mean you’ll be able to look at the providers with the cheapest options, but if they care about the safety of the driver as well as delivering good customer service, it would be worth paying more.

Why are teens associated with a higher cost of insurance?

Teens have some of the highest costs for car insurance of any driver age group. The high costs are likely to continue up until the age of 25 when most drivers have around nine years of driving experience.

Until then, young drivers will pay high rates if they don’t take steps to offset the costs. Teens have higher rates because they have a higher risk of being in an accident, causing damage to another vehicle, and walking away with some sort of injury.

According to statistics published by the National Highway Traffic Safety Administration, drivers from 15 to 20 years old are more likely to be in an accident than any other age group. (For more information, read our “Car Accident Insurance Statistics for Teens“).

Unfortunately, the same age group is more likely to die in a car accident than any other way.

From the perspective of the car insurance companies, teen drivers mean claims that the companies will have to pay out in the future.

Paying out claims cuts into a car insurance company’s profits, so car insurance providers will charge higher prices to offset the risk. Their coverage options will also be a lot more strict, more so than a driver with an older car who has been driving for many years. This is because they’re new to the road, and may not have the confidence and knowledge that a more experienced driver will have. An insurer is going to take that into consideration when setting up a policy for a teen driver.

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What are some of the best car insurance companies for teens by purchase experience?

There are many auto insurance companies out there, and you want to find the one that has all of the traits for which you are looking. One factor that can be important to many is the purchase experience.

Few people want to have a complicated buying experience, especially when adding the stress of having a teen driver on top of actually buying the coverage.

J.D. Power and Associates conducts annual ratings of car insurance providers based on customer answers on surveys.

One survey for which they compile data is the purchase experience; that includes prices, the range of products available, and the overall rating of local agents, call centers, and a website. Ratings are out of five circles, though not every car insurance provider caters to teen drivers.

In terms of the purchase experience, there were a few insurers that offer teen programs that also rated highly on the J.D. Power survey.

One company was American Family Insurance, with four out of five stars overall. They offer good student discounts, as well as other discounts.

The Auto Club Group, the insurance provider of AAA, also garnered four out of five stars, and they offer good student discounts of almost 15 percent.

Erie Insurance was another four out of five-star provider that also offers discounts for young drivers, college students, taking accident prevention courses, and driver training. (For more information, read our “Cheap Car Insurance for Students“).

Read more:

• Erie Insurance Company Car Insurance Review
• Auto Club Group Insurance Company Car Insurance Review

What are some of the best car insurance companies for teens rated by customer service?

Another factor for which you should look when considering car insurance providers for a teen driver is customer service. Customer service includes items like pricing, billing and payments, and communications.

Having a good relationship with an insurance company is key to providing true peace of mind, especially when teen drivers are concerned.

J.D. Power also publishes an annual provider’s rating study, which relates directly to customer service. Again, not all of the providers offer special features for teen drivers, but a few of them stood above the rest.

USAA, an insurance company formed by Army officers and restricted to veterans, active duty personnel, and their family members, earned five out of five stars for overall customer satisfaction.

USAA has an extensive program for teen drivers. In addition to good student discounts, they also offer discounts for safe driving, a low mileage discount, and a discount for taking driver training courses.

Additionally, they extend their accident forgiveness policy to teen drivers, a rare occurrence in the auto insurance industry.

Lastly, to further a teen’s commitment to safe driving, USAA also offers a safe driving agreement that opens a dialogue between teens and parents and holds each to certain standards.

The Automobile Club of Southern California, another division of AAA, scored four out of five stars in the customer service study. As a division of AAA, they also offer good student discounts, as well as roadside assistance for teen drivers.

Can the best car insurance for teens be grouped by claims satisfaction?

Satisfaction with the claims process is going to be a very important part of a teen’s relationship, as well as her parent’s relationship, with a car insurance provider.

Chances are that teen is going to have some sort of a claim at least once as a young driver. The last study offered by J.D. Power and Associates on an annual basis is satisfaction with the claims process.

Auto-Owners Insurance was the category’s award recipient, and they boast on their website that they have been so designated for the last four years in a row.

Auto-Owners Insurance offers an array of discounts and products to help make teen auto insurance affordable.

The company offers good student discounts of up to 20 percent for B grades or better, and a college student away-from-home discount.

Auto-Owners Insurance also offers a teen monitoring discount for drivers 16 to 20 years old that utilizes the new GPS tracking devices on the vehicle that is driven the most by the young driver.

Read more:

• Auto-Owners Specialty Insurance Company Car Insurance Review
• How much does insurance cost for a 20-year-old?

Basically, the device tracks the location and speed of the vehicle, recording if the vehicle is ever being operated at unsafe or unlawful speeds.

This is one of the latest trends to hit the insurance industry, allowing drivers to prove through their driving alone that they operate their vehicles as safely and as cautiously as possible.

The provider American Family also rated highly in this category, with four out of five stars. Another high scorer, though a smaller provider, was New Jersey Manufacturers Insurance Co.

The company is a smaller insurer offering insurance products in the Northeast; they also offer good driver discounts and driver training discounts. Additionally, USAA also scored five out of five stars in the claims category.

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What are the largest car insurance companies for teen drivers?

Sometimes a teen has no choice but to go with mom and dad’s insurance company, at least until they are ready to foot the financial burden of living alone.

When this is the case, chances are that mom and dad likely have either State Farm or Allstate, which are the two largest private car insurance providers in the U.S.

The 2011 Market Share Data released by the National Association of Insurance Commissioners shows that the two companies control almost 30 percent of the private car insurance market in the U.S.

Both providers offer something for teen drivers that make them strong choices for coverage.

Allstate has a complete teen driver program that includes information for parents, and electronic media and games for teens, to impart the serious side of being a driver.

They offer a pledge against texting and driving that is sponsored by Facebook, a social website. The pledge is aimed at reducing teen deaths from car crashes and uses grants through the Allstate Foundation to influence a teen’s view of safe driving.

State Farm has a host of discounts for young drivers, such as the good student discounts that can last after graduation until the age of 25, and can be as much as 25 percent.

They also offer a discount for young drivers who complete their Steer Clear course for up to 15 percent off of premiums.

Both Allstate and State Farm have the power of their sheer size behind them, and that allows them to have some really outstanding financial ratings as well.

Financial ratings are another area that should be considered when looking for insurance. Paying a premium doesn’t do much good in the way of coverage if a provider goes bankrupt and can’t pay your claim.

Needless to say, State Farm, the largest car insurance provider in the U.S., has the financial strength to remain in business despite storms both natural and economic.

How can you find the best car insurance for teens?

While there are many great car insurance providers out there that offer a lot of different discount programs for teen drivers, the only way to determine which company will offer the most affordable rate is to get a quote. And with such a young driver at the wheel, getting more than one can sometimes help in finding the best policy.

Car insurance providers all charge different rates, and even a ton of discounts can sometimes work out to still be a higher rate than some other company.

The key to finding the most affordable teen insurance company is to get rate quotes from as many companies as possible.

Make sure to compare the same coverage amounts so that quotes are equally judged, and make sure to find the one company that works the best for everyone in the family.

Old and young drivers alike can benefit from comparing car insurance quotes right here by inserting a ZIP code into the FREE box now!

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