Jessica Sautter is a Content Writer for CarInsuranceCompanies.com with a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in Mathematics.

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Oct 18, 2020

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Key takeaways...

  • The primary factor is how much risk a potential driver presents. They classify drivers into groups based on how likely they are to cost the company money in claims
  • Some companies have special programs set up for their teen drivers. So this is another great reason to compare teen car insurance
  • Most companies will give teens and college students under age 25 a discount if they have good grades
  • Make sure to compare rates to get the best rate for you teen

Teen car insurance is quite pricey, as any teen or their parent knows. If you’ve never compared car insurance rates before, having to add a teen driver to your policy makes this the perfect time to do so.

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While it may seem like a bit of a hassle, there are some very good reasons why you should compare teen car insurance.

Table of Contents

High Teen Insurance Rates

Did you know that teens pay higher insurance rates than almost any other category of driver? They do pay more than any other age group.

It’s not uncommon for parents to see their premiums double when they add a teen driver to the policy. Sometimes, especially if the teen is a boy, it can go up as much as 150 percent.

While this may strike some as unfair, there are actually some really good reasons for this. Insurance companies use several factors when calculating their premiums.

The primary factor is how much risk a potential driver presents. They classify drivers into groups based on how likely they are to cost the company money in claims.

Statistically, teen drivers have more wrecks and receive more tickets than all other age groups. And the younger the driver, the more tickets they receive.

Sixteen-year-olds receive twice as many tickets as 17-19 year-olds, according to the California Department of Motor Vehicles.

Unfortunately, they also have more fatal crashes each year. The National Highway Traffic Safety Administration says that traffic accidents are the number one cause of teen deaths in this country.

There are two main factors that cause teens to have so many accidents and citations: immaturity and inexperience.

Immaturity leads to poor decision-making about things like drug or alcohol use, using cell phones while driving, and choosing not to wear seatbelts.

Even having other teens in the car can be a major distraction to teen drivers, though they usually choose to drive their friends around anyway.

Inexperience is also a problem. They just aren’t equipped yet to know how to properly handle many of the situations they’ll encounter on the road. Unfortunately, while driver’s education classes can help, there’s just no substitute for driving experience.

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Not All Companies Are the Same

All of these high crash statistics cause insurance companies to group all teens into a high-risk category. This, in turn, results in spectacularly high insurance costs. Even if your teen is mature and responsible, experience has taught insurance companies the opposite.

This leads us to the main reason to compare teen car insurance. Not every company will charge you the same price for adding your teen to an insurance policy.

In fact, there’s several hundred dollars difference in the average person’s quotes from different companies.

Some companies prefer not to cover teens, so they’ll charge higher prices for teens that are on their policies. Other companies are larger and have a larger clientele, which allows them to more easily absorb losses due to teen drivers.

Some companies offer more discounts for teens, which brings their price down lower than other companies.

Whatever the reason, you won’t know whether you are getting the best deal for your teen unless you spend the time to compare rates from several companies.

While you are at it, get your teen involved. As teens take on the responsibility of driving, they need to understand the relationship between that privilege and the cost, including insurance.

This is also a prime opportunity to explain what will happen if they make poor choices, like speeding and getting a ticket.

Teen Driver Programs

https://www.youtube.com/watch?v=x4fb7fcgcig

Some companies have special programs set up for their teen drivers. So this is another great reason to compare teen car insurance. If your teen completes the program offered by the company, it will usually reap a nice reduction in his insurance premium.

However, not all companies offer programs like this. If yours doesn’t, you could also ask if they give a discount for completion of such a program from an independent source.

These teen driver safety courses are different than the driver’s education courses they take in order to get a license.

Instead, these courses concentrate on teaching teens skills that will help them recognize risks on the roads and avoid dangerous behavior. This results in fewer accidents, fewer traffic citations, and lower insurance costs.

The National Safety Council offers one, but you can also check locally to see who offers a similar class.

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Teen Discounts

Many companies offer discounts. One, in particular, is relevant to teen drivers. Most companies will give teens and college students under age 25 a discount if they have good grades.

Usually, companies require at least a 3.0 GPA, or nothing lower than a B.

However, the amount of the discount varies from company to company. There are other discounts that one company might offer while another doesn’t. Be sure to ask about discounts for the car your teen drives.

If your teen has his own vehicle, be sure to list any safety features it has.

These will usually result in a discount as well. Any anti-theft devices or technology could also be credited to him.

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Don’t Just Compare Rates

While you are shopping around for teen auto insurance, don’t just compare the rates. There are a few other factors that are just as important.

For example, if you are getting two rates that are very similar in price, one of the companies might have other benefits that would tip the scale.

If one of them offers accident forgiveness, this could be very helpful with a new teen driver in the house. This way if his inexperience does lead to an accident, it won’t hurt your insurance premiums–at least the first time.

You’ll also want to make sure that the company is easy to work with. If the company offers low prices but has a reputation for bad customer service and trouble with claims, then they probably aren’t worth the cost savings you get from them.

To find out if they have a bad reputation, you can check with your state department of insurance. They publish the number of complaints filed against all the companies licensed to do business in your state. You can also check their customer satisfaction scores with J.D. Powers & Associates.

Saving Money on Teen Car Insurance

Besides shopping around for the best deal, there are a number of ways to save a bit of money on your car insurance, even with a teen driver on the policy.

While most teens dream about their own cars, if at all possible, don’t get a newly licensed teen his own car.

Rather, add him as a secondary driver to the family cars. Adding another car with a teen as the primary driver will result in an even higher insurance premium.

If the teen is going to get a car, the Insurance Information Institute says to pick the right car. You’ll want a safe car, so you can take advantage of those discounts. But you’ll also want to avoid anything that can easily roll over and any high-speed cars.

Two-door sports cars are the most expensive option for a teen driver from an insurance perspective.

No matter whether you buy him a car or not, raising your deductible on the comp and collision portions of your policy can help save you a lot of money. While it won’t completely offset the teen driver increase, it can certainly help.

Just be sure to set the amount of the deductible aside in an account designated for this purpose so that you always have the means to get your vehicles repaired.

While shopping around for insurance, be sure to get quotes for your homeowner’s insurance from the same companies.

Getting both policies from the same company can get you a nice discount on your auto insurance while saving you about 15 percent off your homeowner’s policy. If you don’t have these together now, combining them can also help make up for the increased cost due to the teenager.

If your teen goes away to college without a car, be sure to let the insurance company know that. You’ll usually see a reduction in premiums since the teen won’t have access to a car except when he is home on break.

Finally, the Insurance Information Institute strongly warns parents that this is not the time to reduce your liability insurance. If you are carrying more than the state limit, it might be tempting to lower it to save money.

However, with a teenager on your policy, you have a driver who is more likely to cause an accident.

In fact, the Insurance Information Institute suggests raising your liability at this time, and even considering an umbrella liability insurance policy.

While having a teen get her license is an exciting and scary time, it can also be an expensive one. Hopefully, these tips will help parents find good teen driver insurance that won’t break the bank.

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