Car Insurance Discounts for Teens

1. Add your teen to your policy. Even though it’ll make your car insurance more expensive, adding your teen to your existing auto insurance policy will be cheaper overall than getting them their own.
2. Bundle insurance policies. If you have any other types of insurance (such as home, life, or business), bundle them all under the same provider to unlock multi-policy discounts.
3. Lower your teen’s limits. This is a risky move, as teens are very likely to get into crashes due to their lack of driving experience. However, if you trust your teen to avoid accidents, you can lower their limits all the way down to your state’s minimum coverage.
4. Drop supplemental insurance coverage. You can also drop coverages your state doesn’t require, like collision or comprehensive coverage. But again, since teens are at such high risk of at-fault accidents, we don’t recommend dropping these optional coverages.
5. Raise your teen’s deductibles. You can raise your deductible on collision and comprehensive coverage. But remember, if your teen causes an accident that results in property damage, you’ll have to pay this deductible before your provider compensates you for your losses. Learn more about how insurance deductibles work to make the right financial decision.

The annual cost of auto insurance for teens ranges from about  $2,748 for 19-year-olds all the way up to  $4,706 for 16-year-olds. Fortunately, you can expect price decreases every year from the time your teen turns 17, as they become better drivers who are less likely to file claims.

You will likely find the cheapest rates by adding a teen to an existing household policy, instead of purchasing a separate policy. On average, parents can expect an annual increase of $1,085 to add a teen to their policy. This amount will likely decrease as your teen gets older. The price difference of adding a 16 year old to your policy versus 19 year old is over $440.

Teens need car insurance because, just like for adult drivers, 48 states require it (the only two states that don’t require auto insurance are Virginia ¹ and New Hampshire²). Car insurance will cover any damages your teen causes to someone else’s property in an accident or injuries they cause to another driver or passenger.

If you get them other coverages — such as medical payments coverage (personal injury protection), collision insurance, or comprehensive coverage — the policy can cover their own property damages and injuries as well. Otherwise, you’ll be responsible for these costs out of pocket.

Teens cost more to insure for a very simple reason: They are more likely to get into crashes and file car insurance claims.

As you can see from the latest National Safety Council (NSC) data above, licensed drivers ages 16 to 19 have the highest rates of fatal crashes — and crashes overall. Their relative lack of driving experience makes teen drivers more likely to crash. Someone who gets in more accidents files more claims, which costs insurance companies money. To mitigate these risks, insurance companies charge teens more for insurance upfront in the form of premiums.

• Contact your agent. Call, email, fax, or mail a notice to your auto insurance agent, letting them know you want to add your child to your existing policy. Get a car insurance quote for your updated policy, and ask about any discounts you can take advantage of for your teen being a good driver or student, as well as other cost-reducing products or services.
• Choose the coverages, limits, and deductibles. We recommend getting the highest liability limits you can afford to pay for in premiums, given the likelihood of your teen getting into an accident. Set the deductibles low, and choose supplemental coverages like roadside assistance if you can afford them.
• Pay your premium. Your policy will activate on its effective date if you’ve paid the premium.

There’s no question that adding your teen to your car insurance policy will make your rates shoot up. But if they’re willing to help you out by taking a driver’s education class or maintaining their good grades and safe driving habits, you can keep your insurance premiums affordable. Check out our review of the best auto insurance for teens, or learn more in our teen driver hub.