How Much Does It Cost to Add a Teen to Your Car Insurance Policy?

African American teen learning to drive with mom
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Car insurance for 16-year-olds can be scary to think about. In most cases, parents and guardians immediately think of the cost, and how overwhelming selecting the right insurance policy can be.

According to the Centers for Disease Control and Prevention, the risk of a car crash is higher among 16- to 19-year olds than among any other age group. Per mile driven, teen drivers in this age group are about three times more likely to be in a fatal crash than individuals 20 years or older. Because of the increased risk, the cost of your car insurance policy can skyrocket with a teenager involved. The cost tends to rise by an average of $800 per year, recent data suggests.

In this guide, you'll learn how to get a newly licensed driver insured, what factors impact 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 it 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.

To know what your insurance carrier requires, call and speak with your car insurance agent. The earlier you talk to them about the process, the better you can prepare.

Although having a teenager on an insurance policy is expensive, most states require all drivers within a household to have auto liability insurance before they can legally drive. By having auto liability insurance, everyone operating the vehicle will be protected for medical, vehicle repair, and other costs when the policyholder is at fault in an accident.

A student driver is cover by their parents or guardians' policy as a household member, but once they receive their license, they will generally need to be listed as an operator on the policy, depending on the state. Once licensed, 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 might not renew your policy or it might 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 hold
  • 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.

Most states require every driver on the road to have car insurance, and the penalties and fees for not doing so will vary. A teenager can be covered by their parents or guardians' policy, or they can purchase your own. In most cases, though, it is more cost effective for a teenager to be on their household's insurance policy.

Why 16-Year-Olds Cost More

Insurance companies set the price for auto insurance using several factors, many of which are impacted simply by your teenager being, well, a teenager. Companies consider how many years you've been on the road, your accident and violation history, and the location of where your car is generally parked. With a young person on your policy, the price often becomes much more expensive.

Naturally, a driver's experience has a big impact on one's policy. Driving a vehicle well takes most people years of practice, and when it comes to a young driver, there is no history showing that the driver is a safe one. Teens are considered to have a high risk of filing a claim.

It's important to note that most insurers often ask for your gender to calculate your household rate. Research indicates that, in general, males are more likely to drive under the influence, get into car accidents and, specifically, get into serious car accidents. With teens specifically, in 2019, the vehicle death rate for male drivers ages 16 through 19 was more than two times higher than the death rate for female drivers of the same age. Still, most people believe feel that individual behavior is a better indicator of a person's risk than their gender identity.

Good driver status can only be earned with time. Rates can come down incrementally over time, depending on your insurance carrier, but age 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. Below, you'll find the mistakes they most 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. Many insurance companies outline tips, as well as deals, that may be beneficial when your teenager has to consider car insurance.

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 under one policy than drivers is a huge money saver. Many car insurance carriers will allow the teen to be added as a secondary driver. As a secondary driver, this person is considered to not have primary access to a vehicle, and this can help you pay a lower rate than the primary driver. 

Getting Good Grades

Insurance companies use a lot of rating factors, and statistics show that students who are responsible at school are often responsible behind the wheel. Because of that, many insurance carriers reward teenagers who are good behind the wheel with a good student discount. Discounts can be based on merit, the results of a driver education course, or if they travel more than a certain distance to and from school. StateFarm, for example, allows policyholders to save up to 25% if the teen within the household gets good grades, and the savings can last until they are 25 years old.