Car Insurance Facts for 16-Year-Olds

African American teen learning to drive with mom
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Car insurance for 16-year-olds can be scary to think about. Most people immediately think of the cost, and selecting the right insurance can be overwhelming. Learn how to get a newly licensed driver insured, what impacts insurance costs, and how to save on insurance costs.

Key Takeaways

  • Generally speaking, car insurance automatically extends to young drivers and if an accident occurs, then the vehicle owner's policy will cover the loss.
  • The cost to add a teen onto an insurance policy can be high due to lack of driving history and experience, but also varies based on several factors.
  • Adding teens to a parent's policy, sharing a car, and maintaining good grades can all help lower car insurance costs for young people.

Adding Your New Driver to Your Policy

Car insurance varies not only by state but also by insurance carrier. Generally speaking, car insurance automatically extends to young drivers. If a young driver is in a car accident, then the vehicle owner's policy will cover the loss.

Some insurance carriers are stricter. They want the permitted driver to be listed on the policy in order to be protected. How do you know what your insurance carrier wants? Call and speak with your car insurance agent. The earlier you talk to them about the process, the better you can prepare.

Knowingly trying to conceal a 16-year-old driver to avoid paying higher rates is not a good idea. Even if you don't notify your carrier, it will discover the new driver when your car insurance policy renews. Insurers can run a report to discover "hidden" members of your household, like newly licensed drivers.

You will then most likely be contacted by mail telling you it's time to add the driver to the policy. If you ignore the notices, the insurance carrier may not renew your policy or it may require you to exclude the driver from the policy.

How Much It Costs to Insure a 16-Year-Old

Determining the cost of car insurance for any one person is extremely tough to do. Several variables impact your rate, including:

  • What insurance carrier you are with
  • What state you live in
  • Whether you qualify for discounts
  • Whether or not the teen has their own vehicle

The fastest way to get the numbers you need to properly budget for a 16-year-old driver would be to call your insurance agent.

Why 16-Year-Olds Pay More

Ratings for car insurance have many factors. Naturally, a driver's experience is a big one. Driving a vehicle well takes most people years of practice. When it comes to a young driver, there is no history showing the driver is a safe driver. Teens are considered to have a high risk of filing a claim.

Good driver status can only be earned with time. Rates can come down incrementally over time depending on your insurance carrier, but 25 is when insurance rates tend to go down noticeably. 

Common Driving Mistakes of Teens

Teen drivers tend to get in more accidents because of their lack of experience. Here are the mistakes they commonly make.

  • Tunnel vision: A nervous driver may focus too much on the vehicle in front of them. It's important to scan for possible dangers when driving. The ability to scan is a skill learned over time. Teens tend to have tunnel vision and stare straight ahead, missing potential dangers like pedestrians and animals.
  • Distracted driving: Distracted driving can be as dangerous as impaired driving. Cell phones and friends can be distracting to teen drivers. 
  • Speeding: Statistics show that when it comes to teens in deadly car accidents, speeding is often a factor. It may not always be intentional, but it's dangerous all the same.

Reviewing these common mistakes with your teen can help them be a safer driver.

The car you choose for your teen driver also impacts your insurance rates. To keep car insurance costs affordable, select a slightly older vehicle with good safety features, like a four-door sedan or sports utility vehicle with multiple airbags. 

Ways to Save Money on Teen Car Insurance

While car insurance for teens can be pricey, there are a few ways to save. These include:

  • Going on a parent's policy: Rather than getting their own policy, it's typically best for a teen to be added to a parent's policy. Parents have access to more discounts, including multi-policy and multi-car discounts. 
  • Sharing a car: Having fewer cars than drivers is a huge money saver. Many car insurance carriers will allow the teen driver to be added as a secondary driver. Someone who doesn't have primary access to a vehicle typically pays a lower rate than the primary driver. 
  • Getting good grades: Many insurance carriers offer a good student discount. They use a lot of rating factors, and statistics show students who are responsible at school are often responsible behind the wheel.