Best Cheap Car Insurance for Teens: Here’s What You Need to Know
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Do you have a new teen driver in the family? Get ready for some serious sticker shock.
Our analysis of 93 car insurance companies across the United States found an average cost of $2,072 per year to add a teen driver to a car insurance policy. Even in states known for low car insurance rates, you can expect your premiums to double when adding a teen driver.
Relax, none of this means you can’t find better prices. To uncover the best cheap car insurance for teens, we evaluated large insurance companies based on price, customer satisfaction and technology fundamentals like virtual car insurance claims and digital ID cards.
Related: Compare Rates On Car Insurance With EverQuote
Nationwide
Why we picked it: Nationwide earned the top spot on our ranking of the best cheap car insurance for teens thanks to excellent prices and a strong reputation for good customer service. The company also offers top-notch tech fundamentals, like usage-based insurance and pay-per-mile insurance.
Potential drawbacks: We found none.
USAA
Why we picked it: USAA offers very good prices and is known for extremely high claims satisfaction. You’ll also find good tech fundamentals.
Potential drawbacks: USAA is only available to active members of the military, veterans and eligible family members.
American Family
Why we picked it: Good rates and good customer service makes American Family an attractive option for parents of teen drivers. The American Family Teen Safe Driver Program also includes a mobile app that keeps track of your teen’s risky driving habits.
Potential drawbacks: Claims satisfaction was good, but it was lower than some other top competitors.
Geico
Why we picked it: Geico offers very good rates for teen drivers and excellent tech fundamentals. In addition to the DriveEasy program that rewards safe drivers, teens might enjoy the augmented reality feature in the mobile app, which helps you find gas stations or locate your car in a crowded parking lot.
Potential drawbacks: Geico doesn’t have any notable drawbacks, but parents of teen drivers may be able to find better rates among top competitors.
Related: Compare Rates On Car Insurance With EverQuote
How to Add a Teen Driver to Your Car Insurance
A great way to cope with the sinking feeling that comes with teen car insurance costs is to add your new driver to your existing policy, rather than buying a separate policy for them.
Another way to cut costs is to wait until your teen gets their driver’s license to add them to your policy. In certain cases, however, a kid with a learner’s permit who isn’t fully licensed yet can be added to your policy at no cost.
Here are six more tips for getting cheap car insurance for teens:
1. Compare Insurance Prices
To ease the financial hit of insuring a teen driver, compare quotes from several insurers. The annual premium for two parents and a teen on the same car insurance policy might be a few thousand dollars lower at one insurer than another.
2. Explore Car Insurance Discounts
You might be able to score discounts if a teen driver is on your car insurance policy. For instance, your teen driver might qualify for a good student discount (typically if they earn average grades in the A and B ranges). Also, you might secure a discount if your teen driver successfully passes a training program for teen drivers.
And if you’re not already doing so, you might consider bundling policies to earn a discount. An insurer might offer discounts if, say, you insure your car and home with them; this is known as bundling.
3. Choose the Right Vehicle
Factors such as the age and model of a car can affect how much you pay for coverage. Your bank account might thank you if your teen winds up driving a 5-year-old compact SUV rather than a brand-new sports sedan.
4. Delay the Driver’s License
If your teen puts off getting a driver’s license until age 17, rather than obtaining one at age 16, the car insurance premium might be lower. The younger a driver is, the higher the premium often can be.
5. Bump Up the Deductible
Raising the deductible for the collision or comprehensive portion of your car insurance policy—from $500 to $1,000, say—might reduce your premiums. It’s worth noting that if you increase the deductible, you’ll end up paying more out of pocket when you file a claim after a crash.
6. Install an App
Some insurers offer apps that track driving behavior. If data collected by one of these apps shows that you and your teen are safe drivers, then the insurer could reward you with a lower premium.
Related: Compare Rates On Car Insurance With EverQuote
Methodology
We rated the best car insurance companies for teen drivers based on:
- Auto insurance rates (75% of score). Average rates were based on a policy with 100/300/100 coverage ($100,000 bodily injury liability per person, $300,000 bodily injury liability coverage per accident, $100,000 for property damage liability), plus collision and comprehensive coverage. Source: Quadrant Information Services.
- Customer happiness (12.5% of score). Based on complaints filed with state departments of insurance and satisfaction ratings among customers who have made claims. Sources: Clearsurance and the National Association of Insurance Commissioners.
- Tech fundamentals (12.5% of score). This technology score encompasses mobile apps for digital insurance ID cards, the availability of pay-per-mile and usage-based insurance programs, and the availability of virtual auto insurance claims.