The Average Cost of Car Insurance for Teens

Teen drivers (ages 16 to 19) pay $597 per month for full coverage on a family plan. This is more than four times the $126 per month adults pay, according to MoneyGeek's analysis. That gap reflects the statistical risk insurers assign to new drivers, who have crash rates nearly four times higher per mile than drivers over 20. 

Your type of car insurance coverage matters: minimum coverage reduces the monthly cost of car insurance to $293, but it leaves teens without protection for their own vehicle damage.

The cost difference between teen and adult coverage shows insurer risk calculations. Insurers price based on the likelihood of a claim, and teens file more claims per mile driven than any other age group. The rise in cost of car insurance for aanother higher-risk age group, such as seniors, is minuscule compared to what young drivers pay.

Rates do fall meaningfully every year as teens age. A clean-record 16-year-old will pay roughly 22% less by age 19, and rates continue declining through the mid-20s. Keeping a clean record during these years builds the driving history that earns lower rates for the long term.

A 16-year-old pays $664 per month for full coverage on a family plan, $143 more per month than an 18-year-old, based on MoneyGeek's analysis. Age is one of the most important factors affecting car insurance rates, and each year of experience behind the wheel directly lowers what insurers charge. The more experience you have driving without an accident or violation, the less risky you appear in the eyes of insurers.

The year-to-year drop from ages 16 to 17 ($43 per month) is larger than any other single-year decline in this age range. That's because the first year of solo driving is when insurers have the least data on the driver and the most risk.

Once a teen has a year of clean driving history, the risk profile shifts. But experience matters too: 17- and 18-year-olds who start driving later, rather than at 16, will be treated as risky as a 16-year-old driver.

A 16-year-old on a family plan pays $663 per month for full coverage. That same teen buying their own policy pays $855 per month, a $192 monthly difference, or $2,304 per year in savings from staying on the family plan. The savings shrink as teens age, dropping to $66 per month at 17 and $12 per month at 18, as individual policies become more competitive with family plan pricing.

The savings at 16 are the largest because of how risk pooling works. When a teen is on a family policy, insurers price the entire household, in this example, that includes two adult drivers with clean records and established credit history. That shared profile pulls the teen's rate down because they are part of a less risky group. 

On a standalone policy, the teen is rated alone, with no driving history and no adult record to offset the risk. The result is a much higher premium.

A 16-year-old pays $203 per month for full coverage in Hawaii but $1,013 per month in Louisiana. Based on our analysis of recent rates, this is a $9,725 annual difference for the same coverage. 

State insurance regulations, accident rates, litigation environments and weather risks all influence these differences. Louisiana, Florida and New Jersey are the most expensive states for teen drivers; Hawaii, Maine and Vermont are the most affordable.

Read more: Average car insurance rates by age and state

Hawaii's low rates are due to state law: Hawaii prohibits insurers from using age as a rating factor, so teen drivers don't pay the youth surcharge that applies everywhere else. In every other state, age is one of the most heavily weighted factors in setting premiums. 

States like Louisiana and Florida combine high base rates with elevated litigation costs, severe weather exposure and high uninsured-motorist rates.

If you live in a high-cost state, comparing quotes from multiple companies matters more because there's a greater difference between the cheapest and most expensive insurer.

Teen car insurance costs are high, but several strategies can reduce what families pay. The four most effective approaches: staying on a family plan, earning a good student discount, choosing the right vehicle and completing a driver training course, can each cut costs by hundreds of dollars per year.

The single biggest savings available to teen drivers is staying on a family policy rather than buying standalone coverage. A 16-year-old saves $2,304 per year by staying on a family plan, dropping to $792 at 17 and $144 at 18. Those savings come from risk pooling; adult drivers on the policy dilute the actuarial risk the insurer assigns to the teen. 

For most families, this is the default choice, but it's worth confirming that your insurer is applying multi-driver discounts to the household policy. Some carriers offer additional multi-car discounts when the teen's vehicle is also on the policy.

Most major insurers offer a good student discount to teens who maintain a B average (3.0 GPA) or higher. Discounts average around 8% to 16% depending on the carrier and state. On a $7,166 annual premium, a 10% discount saves $717 per year. The discount requires proof of grades, a report card or transcript, and must be renewed each term. 

Not all insurers offer the same discount amount, so ask each carrier what their good student criteria and savings percentage are.

The car a teen drives directly affects the insurance premium. Older, mid-range vehicles with strong safety ratings and low repair costs carry lower premiums than newer, high-value or high-performance models. 

A teen driving a 2012 Toyota Camry will pay less than one driving a newer luxury SUV with advanced technology that costs more to repair. Full coverage on an older car with a low market value may not be worth having if the vehicle is worth less than the combined cost of your deductible and a year's collision premium; dropping collision coverage saves money. Talk to your insurer about which vehicles on your policy increase the teen's rate.

Insurers often offer premium discounts to teen drivers who complete an approved driver education or defensive driving course. Discounts range from 5% to 10%. Some carriers apply them automatically when you submit a course completion certificate. 

Besides saving you money, driver training courses have safety benefits. Teens who complete formal training have lower crash rates in the first two years of driving. Check with your insurer before enrolling to confirm which courses qualify, since not all programs are approved by every carrier, and online-only courses don't always count.