How Much Is Car Insurance For Teens? 2025

Getting a driver’s license is a huge milestone for teenagers, but for parents, it comes with a hefty car insurance cost. Teen drivers face some of the highest premiums, with an average cost of $319 per month. Without the right coverage, families risk overpaying or being left unprotected after an accident.

Having worked with families to secure affordable auto insurance, I’ll walk you through the best ways to lower costs while ensuring your teen is fully covered.

Average Cost Of Teenage Car Insurance – By State

Teen car insurance rates vary significantly based on where you live. The national average cost for a teenage driver is $319 per month ($3,770 per year) for full coverage, but some states charge much more due to local risk factors like accident rates, minimum coverage laws, and fraud claims.

The table below breaks down the average annual cost of car insurance for 18-year-old male and female drivers in each U.S. state, and Washington, D.C.. Rates are based on minimum required coverage with a $500 deductible and may vary based on the insurer.

Most Expensive States for Teen Car Insurance:

• Florida ($7,499)
• Louisiana ($5,001)
• Missouri ($5,337)

These states have high accident rates, insurance fraud, and expensive coverage laws.

Most Affordable States for Teen Car Insurance:

• Hawaii ($688)
• North Carolina ($1,156)
• Maine ($1,362)

These states either regulate teen rates heavily or have low accident rates.

States That Prohibit Gender-Based Pricing:

• California, Hawaii, Massachusetts, Michigan, North Carolina, and Pennsylvania require equal rates for male and female teen drivers.

Car Insurance Rates For Teenagers On A Parent’s Policy

Adding a teen to a parent’s car insurance policy is significantly cheaper than getting them their own separate policy. On average, parents can save up to 50% by including their teenager on their existing policy rather than purchasing an individual plan for them.

While teen car insurance rates remain high due to their increased accident risk, insurers gradually reduce premiums as young drivers gain experience and maintain a clean record. The table below shows the average cost of adding a teenage driver (ages 16-19) to a parent’s policy, based on a married couple’s base rate of $2,948 annually.

*This study is for two parents and one teen.

Car Insurance Rates For Teenagers On Their Own Policy

Teenagers pay significantly more for car insurance when purchasing their own policy rather than being added to a parent’s plan. Insurance companies consider teens high-risk drivers due to limited driving experience and higher accident rates, leading to premiums that can be double or even triple what parents pay.

It should also be noted that minor teens are not legally allowed to purchase their own car insurance policy without written consent of a parent or guardian.

However, teens can lower their costs by shopping around, taking advantage of discounts, and considering insurers that specialize in affordable coverage for young drivers. Below is a comparison of average rates from major providers for teenagers getting their own policy.

Why Is Insurance More Expensive for Teens on Their Own?

• No Multi-Car Discount – Teens who buy a separate policy don’t get the multi-vehicle savings that parents do.
• Higher Risk Category – Insurers classify teen drivers as high-risk due to inexperience and higher accident rates.
• Lack of Credit & Insurance History – New policyholders don’t have an insurance history or a strong credit score, which raises rates.

Best Car Insurance Companies For Teenagers 2025

We have reviewed the top car insurance companies for teen drivers and rated them based on the average car insurance rates 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-duty or a veteran 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 telematics program
• Policy bundling

een drivers covered by USAA 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.

State Farm

State Farm has numerous teen driving discounts these can include:

• Drive Safe & Safe usage-based telematics program
• Vehicle safety features
• Good student
• Steer Clear driver safety program
• Driver training discount
• Student away at school discount

State Farm, the largest U.S. auto insurer by market share, earned three starts from Forbes Advisor and has a low customer complaint level. State Farm also received an 885 from JD Power for overall Customer service satisfaction. Teens will spend on average, about $431/mo. State Farm also have vehicle-specific discounts such as passive restraint, anti-theft, and newer vehicle safety.

Geico

Geico offers many teen driver discounts:

• Good student
• Safe driver
• Drivers training discount
• Student discounts tied to school organizations
• DriveEasy usage-based telematics program
• Military discount

Geico has an A++ Superior financial strength from A.M. Best, the highest level possible. 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 offers numerous discounts for teen drivers:

• SmartRide usage-based telematics program
• Safe driver
• Good student
• Driver safety course discount
• Student away discount

J.D. Power scores Nationwide an 858 on their Customer Satisfaction Index ranking. Their usage-based telematics discount, based on your driving habits, can generate savings up to 40%. The average car insurance cost for teenagers is $404/mo. Nationwide also offers gap insurance, which covers the difference between what you owe on a car loan or lease versus the actual cash value of the vehicle if it is totaled in an accident.

Allstate

Allstate offers many teen driver discounts:

• Drivewise usage-based telematics program
• Milewise usage-based telematics program
• Safe driver
• Good student
• Driver safety course discount
• TeenSMART driver safety program
• Resident student

With Allstate, teens will pay an average cost of $602/mo. This premium can drop once you turn 20 should you remain accident-free. The average cost in your 20s can be about $272/mo. Allstate customers who enroll in its optional Deductible Rewards® program earn an immediate $100 off their collision coverage deductible, and another $100 in deductible savings for each year they drive without getting into an accident up to a maximum of $500.

They also have accident forgiveness as an add-on feature which will protect you against a rate increase after your first at-fault accident.

Car Insurance Discounts For Teenage Drivers

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.

With the right discounts, teens can save anywhere from 5% to 25% on their premiums. Below are some of the most common ways to reduce teenage car insurance costs.

Good Driver (5%-15%)

As a new driver, you are still learning the rules of the road. Also, as a National Highway Traffic Safety Administration study has shown,many teenagers engage in distracted driving habits and ignore 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.

Teens who maintain a clean driving record (no accidents, no traffic violations) for 3+ years may qualify for a Good Driver discount. Since young drivers are statistically more likely to be in accidents, this reward encourages safe driving habits.

Good Student Discount (10%-25%)

Most insurers offer a discount for high school or college students who maintain a GPA of 3.0 (B average) or higher. Some companies may accept Dean’s List or Honor Roll status as an alternative qualification.

How to Qualify:

• Provide a copy of recent transcripts every 6-12 months.
• Some insurers allow SAT/ACT scores to qualify instead of grades.

Multi-Car or Family policy Discount (10%-20%)

Adding a teen to a parent’s policy is almost always cheaper than buying a separate policy. Multi-car discounts apply when multiple vehicles are insured under the same provider, leading to significant savings.

Defensive Driving Course Discount (5%-15%)

Taking a Driver’s education course before you obtain your driver’s license is common in some states. Many insurers offer discounts to teens who complete a state-approved defensive driving course. These courses teach accident avoidance techniques and help reduce accident risk.

Telematics or “Usage-Based” Discount (Up to 30%)

Many insurers offer usage-based insurance programs that track driving habits through a mobile app or plug-in device. These programs reward safe driving behaviors, such as:

• Smooth braking
• Obeying speed limits
• Driving during daylight hours

Warning: Telematics programs can increase your rate if you frequently speed, brake hard, or drive late at night.

Student Away at School Discount (Up to 10%)

Parents with college-aged teens (under 25) who leave their car at home may qualify for a Student Away Discount.

• Must be at least 100 miles away from home
• Car must remain at home while the student is at school

What Are The Cheapest Cars To Insure For Teenage Drivers?

Cars with high safety ratings, reliable performance and low repair costs are generally less expensive to insure for teen drivers. Older car models, or small SUVs are often the best choices for young drivers.

Popular options for affordable insurance include models like the Honda Civic, Toyota Corolla, Ford Escape, and Subaru Outback. These vehicles are not only cost-effective to insure but also offer solid reliability and safety features to protect teenage drivers.

Additionally, avoiding luxury vehicles, sports cars, or models with high theft rates can help keep insurance premiums low. Parents and teens should also compare insurance rates for specific models before purchasing to find the most budget-friendly options.

How To Save Money On Teenage Car Insurance

Teen car insurance can be costly, but there are several ways to lower your premium by 10%–30%. Parents and teens can reduce costs by taking advantage of discounts, adjusting policy options, and encouraging safe driving habits. Here’s how:

1. Enroll in Auto Bill Pay (5%–10% Savings)

Setting up automatic payments can reduce your premium by 5%–10% with many insurers. It also prevents coverage lapses, which can lead to higher rates in the future.

2. Pay Your Policy in Full (Up to 10% Savings)

Many insurance companies offer a Paid-in-Full discount, allowing you to save up to 10% if you pay for 6 or 12 months upfront instead of monthly installments.

Example: If your teen’s insurance costs $3,000 per year, paying in full could save you $300 or more.

3. Bundle Policies (Up to 25% Savings)

Bundling multiple policies under one provider can reduce your premium significantly.

• Multi-vehicle discount: If parents and teens insure multiple vehicles under one policy, you can save 10%–20%.
• Multi-policy discount: If you combine auto insurance with home, renters, or life insurance, you can save up to 25%.

4. Choose a Low-Mileage Plan (Up to 15% Savings)

Many insurers offer low-mileage discounts if your teen drives less than 7,500–10,000 miles per year.

• Best for: Teens who carpool, use public transport, or only drive occasionally.

5. Take Advantage of Teen-Specific Discounts

• Good Student Discount (10%–25%) – Teens with a B average (3.0 GPA) or higher can qualify for major savings.
• Defensive Driving Course Discount (5%–15%) – Completing a certified course can help reduce risk and lower premiums.
• Safe Driver Programs (Up to 30% Off) – Telematics programs track safe driving and offer discounts based on real-time driving habits.

Example: Some programs, like Progressive’s Snapshot, monitor speed, braking, and mileage, offering discounts up to 30% for good driving.

Factors Affecting Cost Of Car Insurance For Teen Drivers

Teenagers face the highest car insurance rates due to their limited experience, risk of accidents, and lack of established driving history. Insurance companies determine rates based on multiple factors, including where you live, the type of car you drive, and your driving record.

Below are the main factors that impact teen car insurance costs:

1. Location

Where you live dramatically affects your car insurance rate.

• Urban areas (e.g., Los Angeles, Miami) have higher rates due to more accidents, theft, and traffic congestion.
• Rural areas typically cost less, since there are fewer accidents and lower crime rates.

Example: Insurance for teen drivers in Hawaii is typically much less compared to the cost for teens in Florida, because Hawaii does not allow age as a rating factor. The specific city and ZIP code where your vehicle is registered is also a rating factor.

2. Age And Inexperience

• Younger drivers pay the most because they have less experience behind the wheel.
• Risk decreases significantly after age 19, and premiums continue dropping through age 25.

Example: A 16-year-old driver pays up to 250% more than a 25-year-old with the same driving history.

Two states prohibit car insurers from using age as a rating factor: Hawaii and Massachusetts. However, insurers in Massachusetts are allowed to use years of driving experience as a factor.

3. Male vs Female

Actuarial data shows that females are typically safer drivers than male drivers, according to the Insurance Information Institute (Triple-I). When all other rating factors are equal, female drivers typically pay less than male drivers.

• Teen boys pay more than teen girls in most states because they tend to engage in riskier driving behaviors.
• States that ban gender-based pricing include California, Hawaii, Massachusetts, Michigan, North Carolina and Pennsylvania where male and female teens pay the same rates.

Statistic: On average, teen males pay 14%–16% more for car insurance than teen females.

4. Type of Vehicle

• Insuring a high-performance car is significantly more expensive than a compact sedan or SUV.
• Safety features like automatic braking and lane assist can lower insurance costs.

Example: A 16-year-old driving a Mustang will pay 50%+ more for insurance than a teen with a Toyota Corolla.

5. Coverage Level

• Full coverage (collision + comprehensive) is required for financed cars but costs more.
• Liability-only policies are cheaper but don’t cover damage to your own vehicle.

Example: Full coverage for a teen driver costs about $319 per month, while minimum liability can be as low as $120 per month.

6. Driving Record

• A single speeding ticket can raise teen insurance rates by 15%–30%.
• At-fault accidents can cause a 50%+ rate increase for teen drivers.

Example: A teen with one at-fault accident will pay $800–$1,200 more per year for insurance.

7. Telematics and Safe Driving Discounts

• Telematics programs track driving behavior and reward teens who drive safely.
• Good Student Discounts (10%–25%) are available for teens with a 3.0 GPA or higher.

8. Credit-Based Insurance Score

How one manages their finances is a predictor of insurance claims, according to Triple-I. Those with lower insurance scores tend to be riskier drivers. However, credit is prohibited as a rating factor in four states: California, Massachusetts, Michigan and Hawaii.

Why Is Car Insurance For Teens So Expensive?

Teen drivers pay significantly higher car insurance premiums because they are statistically more likely to be involved in accidents. Insurance rates are based on risk assessment, and teen drivers pose one of the highest risks on the road due to several key factors.

1. Higher Accident Rates Among Teen Drivers

Teenagers have the highest crash rates of any age group.

• According to the CDC, drivers aged 16–19 are nearly 3 times more likely to be in a fatal crash than drivers over 20.
• Inexperience means teens struggle with hazard recognition, quick decision-making, and defensive driving.

Example: A 16-year-old is statistically more likely to misjudge distances, overcorrect steering, or panic in an emergency.

2. Distracted Driving Is More Common Among Teens

• According to the NHTSA, 39% of high school drivers admit to texting while driving.
• Teen drivers are more likely to use their phones to text, check social media, or even take videos while driving.

Example: A teen driver who takes their eyes off the road for 5 seconds while texting at 55 mph will have driven the length of a football field without looking at the road.

3. Speeding & Reckless Driving

• 43% of teen car crashes involve speeding (NHTSA).
• Peer pressure can increase risky driving behavior, such as street racing, tailgating, and not wearing seat belts.

Example: A study by the AAA Foundation found that teens with multiple passengers are 3 times more likely to engage in reckless driving.

4. Teens Are More Likely to Drive at High-Risk Hours

• Most fatal teen accidents happen between 6 PM and midnight, especially on weekends.
• Driving at night is riskier due to lower visibility, fatigue, and impaired drivers on the road.

Example: 56% of teen crash fatalities occur at night, even though teens drive fewer total miles at night.

5. Teens Lack Defensive Driving Skills

• Experienced drivers develop instinctive reactions to hazards, while teens are still learning how to react under pressure.
• They may not recognize dangerous situations early enough to avoid a crash.

Example: A teen may not realize how long it takes to stop at high speeds, increasing the likelihood of rear-end collisions.

6. Insurance Rates Drop as Teens Gain Experience

• At age 19, insurance rates start to decline as teens prove they can drive safely.
• At age 25, rates drop significantly—often by 50% or more—if the driver has a clean record.

Example: A 16-year-old pays around $3,770 per year for full coverage, while a 25-year-old with a clean record pays around $1,500.

Car Insurance Coverage Types For Teens

Teen drivers must carry the same minimum liability coverage as adults, but due to their higher accident risk, they may also need additional coverage options. Below are the essential types of car insurance for teenage drivers:

1. Liability Insurance (Required in Most States)

Liability insurance covers damage you cause to other people or their property in an accident. It does not cover your own vehicle.

• Bodily injury liability (BI) – Pays for medical bills, lost wages, and legal fees for the other driver and passengers if you’re at fault.
• Property damage liability (PD) – Covers damage to someone else’s car, home, or other property if you cause an accident.

Example: If you rear-end another car at a stoplight, your liability insurance will pay for the damage to their vehicle—but not yours.

2. Uninsured & Underinsured Motorist Coverage (UM/UIM)

If you’re in an accident and the at-fault driver has no insurance (or not enough insurance), UM/UIM coverage will help pay for your medical bills and car repairs.

Example: A driver with no insurance runs a red light and hits your car. If you have UM/UIM coverage, your insurance will pay for your damages.

Some states require this coverage, while others make it optional.

3. Collision Insurance (Covers Your Own Car in an Accident)

Collision insurance pays for damage to your own vehicle, no matter who is at fault.

Example: If you accidentally hit a tree while parking, collision insurance will pay for repairs (minus your deductible).

Recommended for teens, since they are more likely to be in accidents.

4. Comprehensive Insurance (Non-Collision Damage)

Comprehensive coverage pays for damage to your car caused by something other than a crash.

Covers events like:

• Theft
• Vandalism
• Fire
• Flooding
• Hail or storm damage
• Hitting an animal (like a deer)

Example: If a tree falls on your parked car, comprehensive insurance pays for repairs.

5. Medical Payments (MedPay) or Personal Injury Protection (PIP)

MedPay and PIP cover your medical expenses, regardless of who is at fault.

• MedPay (Optional in Most States) – Covers hospital bills, ambulance costs, and surgeries for you and your passengers.
• PIP (Required in No-Fault States) – Covers medical expenses, lost wages, and rehab costs if you’re injured in an accident.

Example: If you’re in a crash and break your leg, PIP can cover both your medical bills and lost wages while recovering.

6. Roadside Assistance (Helpful for Teen Drivers)

Roadside assistance typically covers towing, jump starts, tire changes, fuel delivery and lockout services if your car breaks down.

Example: If your teen runs out of gas on the highway, roadside assistance will send help immediately.

7. Rental Car Reimbursement

If your car is damaged in an accident and needs repairs, rental reimbursement will cover the cost of a rental car while yours is in the shop.

Example: If a crash leaves your car undrivable for two weeks, this coverage will help pay for a rental.

8. GAP Insurance (Only for Financed or Leased Cars)

If a teen totals a car that is still being financed, GAP insurance covers the difference between what the insurance pays and what is still owed on the loan.

Example: Your teen buys a car for $25,000, but after a year of payments, they still owe $20,000. If the car is totaled and the insurer values it at $18,000, GAP insurance will pay the remaining $2,000 on the loan.

Not needed if the car is fully paid off.

Which Coverages Are Essential for Teen Drivers?

• Must-Have Coverages: Liability, UM/UIM (if required), and MedPay/PIP (if required).
• Strongly Recommended: Collision, Comprehensive, and Roadside Assistance.
• Optional: Rental Car Reimbursement, GAP (if leasing/financing).

Teen drivers face higher accident risks, so choosing the right coverage can help protect both the teen and their family’s financial security.

How To Add Your Teenager To Your Insurance Policy

Step 1: Contact Your Insurance Provider

Reach out to your insurance agent or company’s customer service to notify them that you need to add a newly licensed teen driver. Some insurers automatically cover a permitted driver, but once they get their full license, they must be officially added to the policy.

Step 2: Provide Required Information

Your insurer will ask for details, including:

• Teen’s full name & date of birth
• Driver’s license number
• Make, model & VIN of the car they will drive
• Estimated annual mileage
• Any driver training or safety courses completed

Step 3: Choose The Right Coverage

Your current coverage may need adjustments to balance cost and protection.

• Liability Coverage – Ensure you meet or exceed your state’s minimum liability requirements.
• Collision & Comprehensive – If your teen drives a new or financed vehicle, these coverages are highly recommended.
• Higher Deductibles to Lower Premiums – Raising deductibles from $500 to $1,000 can reduce costs.

Step 4: Ask About Discounts

Most insurers offer discounts to help offset the high cost of teen insurance. Ask about:

• Good Student Discount – Teens with a 3.0 GPA or higher can qualify.
• Defensive Driving Course Discount – Completing a state-approved safety course may lower premiums.
•  Multi-Car Discount – If your family has multiple vehicles on the policy.
• Bundling Discount – If you have homeowners or renters insurance with the same provider.
• Low-Mileage Discount – If your teen drives less than 7,500 miles per year.
• Telematics Discount – Some insurers offer discounts for using a tracking device that monitors safe driving habits.

Step 5: Compare Insurance Providers

Since adding a teen driver can double or triple your premium, now is a great time to shop around for better rates. Some companies specialize in affordable teen driver coverage—a new policy might save hundreds per year.

Step 6: Confirm & Update Your Policy

Once your teenager is added, review your policy documents to ensure:

• The correct driver is listed
• The appropriate coverage limits are in place
• Your discounts have been applied