Finding the Cheapest Car Insurance for Teens
If you’ve ever had to buy car insurance for teens , you know coverage can be brutally expensive.
That’s why it’s especially important for parents of teen drivers to compare prices from multiple insurance companies and look for discounts.
Car insurance for teens and their families
To give you a rough idea of how much it’ll cost to insure your teen driver, we looked at rates in the eight most populous states for a family with and without a teenager behind the wheel of two popular models.
In our analysis, rates to add a teen driver to a policy generally ranged from $1,200 per year to $2,200 per year — though rates were much higher in some cases, depending on the insurer.
How to score cheap car insurance for teens
If that sounds like a lot of money, a wide variety of discount are available that can help soften the financial blow of adding a teen driver to your policy. Amounts vary by state and company, but “up to” 10%, 15% or 25% off is a pretty common refrain.
Here are some ways to save money:
- Add the teen to the parents’ policy rather than putting them on their own policy. NerdWallet’s research has shown it’s much less expensive to add a teen to a policy with parents.
- Get good grades. Families with students with a B or better average in school are frequently eligible for car insurance discounts.
- Take driver’s training . Young drivers who took a driver’s education course were less likely to get a traffic ticket, less likely to have an accident and less likely to be in an accident resulting in injury or death than those who didn’t, according to a 2015 University of Nebraska-Lincoln study.
- Leave the car at home. Some insurers offer a discount if the student is attending school at least 100 miles away from home and doesn’t take a car. (Students are still covered when they drive while at home on breaks.)
NerdWallet looked at insurance rates from the largest insurers for 10 ZIP codes in the eight most populous states — California, Florida, Georgia, Illinois, New York, Ohio, Pennsylvania and Texas — for a 2015 Toyota Camry and a 2015 Ford Escape. We analyzed rates for two 50-year-old married adults versus rates for two 50-year-old married adults with an 18-year-old driver licensed at age 16. In most cases we used liability coverage of $100,000 per person and $300,000 per incident; $50,000 property damage coverage, uninsured motorist bodily injury coverage of $100,000 per person and $300,000 per incident, and $1,000 in comprehensive and collision coverage. These are sample rates generated through Quadrant Information Services. Your own rates will differ.
Buying cheap car insurance for teens: 6 essential tips
As the parent or guardian of a young driver, you know it’s essential to have good car insurance to protect them. Whether you’re paying for it or they’re working hard to foot the bill, it’s a new expense for your family. Fortunately, you can find cheap car insurance for teens without breaking the bank. Here are the six ways to lower the cost of a young driver on your policy:
1. Learn about Good Student discounts
Students with higher grade point averages are usually more responsible and better drivers. If your young driver earns a B average or better at school, you may qualify for a good student discount on Nationwide teen car insurance.
2. Install anti-theft devices
You may save when you install an anti-theft device in the vehicle. Your possible discount varies based on the type of device installed and the state in which the vehicle is garaged.
3. Keep rates low for teen car insurance with Accident Forgiveness
Accidents happen to even the best young drivers. And if one does occur, insurance rates may rise as much as 30%. If you have Nationwide’s Accident Forgiveness as part of your teen car insurance package, your rates will not increase following the first at-fault automobile accident.
4. Take a defensive driving class
When your teen successfully completes an approved motor vehicle accident prevention course, this Nationwide discount may help you get affordable car insurance.
5. Choose the right teen car insurance policy for your needs
With Nationwide, there are lots of ways to protect your teen while staying within your budget. For example, a higher auto insurance deductible may lower the rate, but could mean more out-of-pocket expenses after an accident. If the vehicle is older or has very high mileage, liability coverage may be a better option than collision or comprehensive – though it will not cover damages to the car after an at-fault accident. Getting the right coverage that best fits your needs is important for saving money on your teen auto policy. Learn more about Nationwide’s auto insurance coverage types today.
6. Stay safe with teen driving tips
One of the most reliable ways to keep insurance costs low is to avoid accidents. Learn about the risks teen drivers face and get tips for how to prevent them. Nationwide’s teen driving resource center offers practical information about teen decision making, distracted driving, the role of parents in teen driving and more.
Insurance terms, definitions and explanations are intended for informational purposes only and do not in any way replace or modify the definitions and information contained in individual insurance contracts, policies or declaration pages, which control coverage determinations. Such terms may vary by state, and exclusions may apply. Discounts may not be applied to all policy coverages.
8 Ways to Cut Insurance Costs for Teen Drivers
You can prevent your auto premiums from skyrocketing.
By Kimberly Lankford, Contributing Editor
February 1, 2010
My 16-year-old son is about to get his license, and I’m afraid of what that might do to our auto-insurance rates. How can we lower insurance costs?
You’re right to be worried — your auto-insurance premiums are likely to skyrocket when your teenage son starts driving. But a few key moves can help you cut costs significantly.
1. Raise your comprehensive and collision deductibles to at least $1,000, which lowers your premiums and prevents you from filing small claims that could jeopardize a claims-free discount. Add some more money to your emergency fund so you’ll have the cash to pay the deductible if anyone in your family does have an accident.
2. Drop collision and comprehensive coverage entirely on older cars that are worth little more than the deductible. You may be paying more in premiums than you could ever get back from the insurer, even if the car is totaled. Look up your car’s value on Kelley Blue Book .
3. Get a safe car. Having your child drive a safe car will help you sleep easier and keep your auto-insurance rates under control, too. Check safety ratings at the Insurance Institute for Highway Safety.
4. Encourage your kids to get good grades. Most insurers offer a big discount for young drivers who maintain at least a B average in high school or college. College kids generally need to take at least 12 credits to qualify for the discount, says Trisha Mujadin, an independent insurance agent with NRG, a Seattle insurance agency.
5. Tell your insurer if your child goes away to college. If your child goes to school more than 100 miles away and doesn’t take a car, you can usually get a big break on your premiums but still have coverage when he or she comes home for vacation.
6. Ask about other discounts for teenage drivers. Some insurers offer discounts for driver-safety programs, cutting costs if the kids take a special class, watch a DVD, or read a driver-safety book and take a test. Ask your insurer what your kid needs to do to qualify.
7. Make the most of multipolicy discounts. You’ll usually get a break on your auto insurance and your homeowners insurance if you keep both policies with the same company. You may get an additional discount if you include an umbrella policy, which provides extra liability coverage beyond your auto-insurance limits and can be particularly valuable when you have a teenage driver.
8. Shop around. Some insurers offer much better deals than others for teenage drivers, so it’s important to compare costs. The insurance company that offered the best rate for you and your spouse may have some of the highest rates when you add a teenage boy to the policy (and it’s almost always better to add the child to your policy rather than have him get his own policy). “One company we work with is really great with young drivers and another is horrible,” says Mujadin.
You can get price quotes from several insurance companies at www.insurancerates.com (a new site by InsWeb.com) or get personalized service from an independent insurance agent who works with many companies (you can find a local independent agent at www.iiaba.org). You may not want to switch from a longtime insurer just to save a few dollars, however, because your current company may be less likely to raise your rate or drop you if your child has an accident, says Mujadin. “If you stay with the company where you’ve been, there’s some value to that — there’s more room for forgiveness.” Also keep in mind that if you’ve been getting a multipolicy discount, your homeowners-insurance rate might rise if you take your auto-insurance business elsewhere.
One thing you don’t want to do in an attempt to reduce your premiums is skimp on liability coverage. Mujadin recommends liability limits of at least $250,000 per person, $500,000 per accident and $100,000 for property damage (or a policy with a “combined single limit” of $500,000, when available, which doesn’t limit the coverage to $250,000 per person involved in the accident). Young drivers are more likely to have accidents, and lowering your liability limits could leave you on the hook for tens of thousands of dollars in expenses if your child does hit another car or injure someone.