You knew the day was coming.
But still, it’s a major wake-up call. Today, your child your turns 16. How did that happen?
And, guess what they want? Yep. Their driver’s license.
Welcome to your new world. As a parent, I’m guessing you’re no stranger to the fact that adequate insurance is the #1 way to protect the financial future of your children.
With car insurance, you’re also using insurance to protect them directly. This is one reason we always recommend insuring with one of the auto insurance industry “top ten” companies: you need coverage that covers and coverage that protects, and you need it at the right price.
It’s scary, we know.
According to the Insurance Institute for Highway Safety (IIHS), teen drivers have three times as many car accidents per mile as drivers ages 20 and older.
Your teenager is getting behind the wheel for the first time.
As with all other areas of their life, you want to protect them from harm and keep them safe.
That’s exactly why getting the best car insurance for them is so important.
We can help.
In this post, we’ll go over the expenses associated with insuring teens and college students.
We’ll also review discounts and other saving opportunities available to you such as:
- Multi-Policy Discount
- Multi-Vehicle Discount
- Safe Driver Discount
- Good Student Discount
FYI: Each insurer has different premiums and offers different discounts. That’s why shopping around for the best car insurance provider is important.
The good news is we’ve done a lot of the homework for you.
After completing our in-depth research of hundreds of insurance carriers, we can now share with you our top ten car insurance companies.
We encourage you to review our top companies with your first-time driver so that they can become familiar with the world of automobile insurance.
We also have included some driving tips to help your teen driver mitigate the risk of car accidents.
There are some great programs out there for you and your teen to participate in together.
Ok, deep breath.
Let’s get started.
The Cost Of Car Insurance For Young Drivers
Finding the right car insurance coverage for your teen or college student can be difficult.
Insurance companies see a much higher risk in insuring young adults under the age of 25.
Because the facts don’t lie.
Inexperience and immaturity play key roles in younger drivers’ decision making.
That’s why drivers between the ages of 16 and 17 are considered the highest risk group by insurance providers.
Additionally, a newly licensed teen driver crash risk is the highest during the first six months after receiving full-privileged licenses.
The fatal crash rate is almost twice as high for 16-17-year-olds compared to 18-19-year-olds.
Because of these unfortunate statistics, you are going to see a major increase in premiums when you add your teenager to your policy.
If they choose to go with their own policy, that’s going to cost even more. A lot more.
Auto insurance premiums are based on complex mathematical equations (each insurer determines their own) and are affected by a variety of factors:
- Age – At age 25, insurance rates typically drop by 15% to 20%
- Gender – Unfortunately, young males are considered a higher risk than younger female drivers
- Location – Where the policyholder resides
- How You Drive – Pleasure, business, rideshare, commuting
- Type of car– A new car means higher premiums
- Safety Features/Above Average Safety Ratings – Some carriers offer a safe car discount
Based on our research, on average, your teen driver could pay an estimated $2,800 in annual premiums if they purchase their own insurance policy.
They can expect to pay higher rates until they are at least 19 years old due to their lack of driving experience and being in a high-risk age group for insurance carriers.
If you decide to add your teen driver to your insurance policy, your rates will also go up. You can expect an approximate increase of at least $600.
Please keep in mind these are averages.
Premiums will vary by the insurance carrier and other factors.
If your daughter wants a sports car, for instance, then your rates will increase by quite a bit.
Our advice? Talk them out of the sports car.
If you do add your teen driver to your policy, be sure you increase your liability protection.
Talk to your insurance agent to figure out just how much coverage you should have.
How To Reduce The Cost Of Your Car Insurance For Young Drivers
Before we review our top ten car insurance companies, let’s first talk about how you can save money on car insurance for your teenager.
You’ll never be able to whittle down insurance costs to nothing, but there are ways you can reduce the costs of your car insurance if you are the parent of a young driver.
To start, the best option to reduce costs is to add your teenager to your policy!
Many insurance providers offer discounts that can reduce premiums.
Here is a list of some of the most common ones:
#1 – Student Discount
You can receive 5 to 15% savings on premiums if your full-time student (high school or college) maintains at least a grade average of B or higher.
They will need to provide proof to your insurance carrier.
This is one of the most common discounts available from most carriers.
#2 – Graduated Driver Licensing or GDL
Generally, this is a three-step driver license program administered by your state.
In most states, a young driver must be 15 years of age to obtain a driver’s permit.
After that, your teen will participate in the GDL program.
Here are the standard three steps to the program:
- Supervised Learning Period – Each state has a mandatory holding period of six to 12 months with at least 40 hours of completed drive time.
- Intermediate License (Restricted) – Usually a one-year term, granted after the student passes a road test; high-risk driving is prohibited during this period, including late night driving and restriction on passengers.
- Full-Privilege License (Unrestricted) – Usually a one-year term with some nighttime and passenger restrictions.
#3- Distant Student
If your child is 22 years or younger, attends a college that is more than 100 miles away, and does not have access to a car on campus, then you could be eligible for this discount.
Note: Many parents are not aware of this discount and end up overpaying unneeded insurance premiums because of it.
#4 – Teen Driver
Some carriers, including Allstate, offer a bundled student discount.
They may include the following:
- Good Student – Be a full-time student maintaining an average grade of B or higher
- Distant Student – Attend a college at least 100 miles from home
- Safe Driver – Use a drive app that tracks actual driving
#5 – Multi-Vehicle
You can receive up to 15% discount if you insure more than one vehicle with the same carrier.
For instance, let’s say your teen bought their own car and you add it to your policy, you get this discount if your insurer offers it.
#6 – Multi-Policy
If you have multiple policies with the same carrier you can bundle them to save money, up to 15%.
#7 – Safe Driver
If you have a clean driving record for a certain number of years, typically it is five years but may different per carrier), you can receive up to 15% savings on premiums.
#8 – Telematics
Some carriers offer a discount for an app or other instrument installed on your car so that the insurer can track you or your teenager’s driving record.
It will monitor what time of day or night you drive, how you stop and star.
Other Tips To Save Money
- Buy A Safe Car—Every year, the IIHS conducts vehicle tests to determine a car’s safety rating in an accident.
- Buy An Older Car—Insuring an older car will cost a lot less than insuring a new one. Additionally, you can pass on collision and comprehensive coverage because if the car is totaled, it’s not worth replacing it.
- Look For Safety Features – Features that could get you a safe car discount. Some of the more common features include electronic stability control (ESC), monitoring devices (telematics), blind spot detection systems, anti-theft devices
- Enroll Your Teen In A Driver’s Education Course – This will allow them to get a lower rate due to completing the course.
- Increase Deductibles – To cut down on monthly premiums.
- Keep A Clean Driving Record – To help you offset the cost of adding an inexperienced driver to your policy.
Ok, now let’s review the best car insurance companies for your teen.
Companies with the Best Car Insurance for Young Drivers
It is important to research insurance companies and compare quotes before you and your child make a final decision on a policy.
With that said, here is our list of top ten car insurance companies for young drivers.
Progressive is a leader in the automobile insurance industry with over 18 million policyholders.
They are the third largest insurance company in the United States and have been around for 80 years.
They offer insurance coverages for all budgets including a “Name Your Price” option, which may work for your teen if they have an older car and doesn’t need collision or comprehensive coverage.
Additionally, Progressive offers many discounts that can offset adding your teen to your policy.
Discounts Available Through Progressive:
- Snapshot (monitoring app/system) – Average discount is 31%, premiums are based on actual driving habits
- Multi-Car – Up to 10%
- Teen Driver – Discount varies, the teen driver must be 18 years or younger
- Good Student – Discount varies, must maintain a B average or better, attend a college at least 100 miles from where you as the parent lives, and must be 22 years old or younger
- Pay in Full – Discount varies, if you pay your 6-month premium up front
Some other discounts that may lower your annual premium are:
- Multi-Policy – 5% average discount
- Safe Driver – 31% average discount, no accidents or traffic violations in the past three years
- Homeowner – Close to 10%, even if your home is insured by a different carrier
- Sign Online – Close to 8%
- Automatic Payment – Discount varies
That’s a lot of discounts!
#2: Liberty Mutual
Liberty Mutual has been around since 1912 and has become a global player in the car insurance industry.
All of their policies come with attractive benefits for your teen driver including 24/7 roadside assistance and claims processing.
Liberty also provides a teen driving contract that helps you establish safe driving habits with your teenager.
Liberty Mutual offers the following teen discounts, including:
- Safety Features – Based on the type of car as well as the specific safety features
- Distant Student – Available if your college student is 100 miles from home and only drives one of your insured vehicles occasionally
- Driver Training Program – If your student completes a qualifying program
- Good Student – If your student maintains a B average or better, and younger than 25 years old
- Multi-Car – Adding your teen driver’s vehicle to your policy
- Alumni or Professional Affiliations – Check your associations and memberships to see if they honor a discount with Liberty Mutual
Note: Discount amounts will vary by state and individual.
QuoteWizard is an online marketplace that helps you find the best automobile insurance coverage from one of their trustworthy partners, some of which made our top ten list, including Progressive, Liberty Mutual, Esurance, and American Family, to name a few.
Therefore, the types of coverage and available teen discounts are specific to each company.
QuoteWizard takes the hassle out of shopping for teen auto insurance by doing the shopping for you.
Check them out!
Esurance offers competitive prices as well as lots of discounts you can take advantage of to save money when adding your first-time driver or college student to your insurance policy.
Esurance is a subsidiary of Allstate, so you get a financially stable company who’s been in business for more than 80 years.
The company offers DriveSense, a mobile app that tracks your actual driving.
When you sign up for the app, you automatically get a 10% discount.
Then, you become eligible for an additional discount per term based on your driving habits.
The company also offers a good student discount, multi-car, and multi-policy discounts.
Metromile is a new and innovative car insurance company that meets the specific needs of low-mileage drivers, specifically those drivers who live in urban areas.
Their target customers drive fewer than 10,000 miles per year.
You pay a low base rate then just pennies a mile above that.
They use a smart driving app, Metromile Pulse, to track your trips.
They charge you for 250 miles per day. If you go above that, it’s free.
They offer multi-car, Anti-theft, safe driver, and low mileage discounts and 24/7 roadside assistance, which is important for your peace of mind.
This is a great alternative to traditional car insurance especially if your family clocks low miles on a regular basis, including how much your teen or college student drives.
USAA made our list because of its high marks in customer service: members love them.
They also offer competitive rates.
The Catch: You have to be an active member of the U.S. military, a veteran, or a family member.
USAA also recommends that you add your teen or college student to your insurance policy.
That said, they do offer a number of teen or student discounts to help you save money.
The Discounts Are:
- Basic Driver Training – Available for drivers 21 and older after completing the USAA driver education course
- Good Student – Maintain a B grade or higher (not available in every state)
- Multi-Vehicle – Applies when you add more than one vehicle to your policy
- Safe Driving – Kicks in after you as the driver maintains a good driving record for more than five years
USAA also offers 24/7 roadside assistance on all policies.
If you are a member of our military, USAA maybe the best match for you and your teen driver.
Allstate is one of our nation’s most established insurance companies.
Along with strong financial ratings, the company offers a large selection of discounts.
Teen Discounts Through Allstate Include:
- Smart Student – Available if your full-time student is under 25 years of age, has completed the teenSmart™ driver education program and attends school at least 100 miles from where you as the parent reside or where the insured vehicle is parked.
- Distant Student – If your student goes to campus without their car and only drives when they come home to visit.
The company also offers some unique tools to help your teen driver build good driving habits.
Tools Offered To Student Drivers Through Allstate:
- Drivewise™ is Allstate’s mobile app that provides you with real-time driving data, safety alerts and even driving tips.
- teenSmart™ is an advanced driver training program for your teen. A discount can be available after your teen has successfully completed the program.
- Cellcontrol™ is an app that blocks cell phone use while your teen is driving. It can also provide alerts on how your teenybopper is driving.
Allstate also offers 24/7 roadside assistance.
Gabi.com is a relatively new online marketplace that works with some of the companies on our top ten list including Progressive, Liberty Mutual, and Allstate.
Therefore, the types of coverage and available teen discounts are specific to each company.
Gabi takes the hassle out of shopping for teen auto insurance by doing the shopping for you.
#9: American Family Insurance
American Family Insurance is a well-established insurance company that has kept its tradition of offering customizable car insurance policies to its customers.
They have high marks for their customer service, which can be important when working with a younger adult on a claim or other matter.
The company offers a Teen Safe Driver Program that teaches safe driving habits through their smartphone app, TrueMotion.
The app tracks your teen’s driving and scores it in real-time. As the parent, you can install the app on your phone and track your kid’s driving.
You will receive a 10% discount after the completion of one year in the safe driving program or after 3,000 miles of drive time.
American Family also offers standard discounts such as multi-policy, good student, and a good driver, which can save you money on premiums if you’re eligible.
MetLife is a worldwide leader in the insurance industry and has been in operation since 1868.
They offer a wide array of coverage plans and are worth your look.
MetLife holds a below average complaint ratio (2016) with the National Association of Insurance Commissioners, which is the national insurance complaint ratio database.
That’s great news!
They also offer a student discount as well as a safe driver and a multi-policy discount.
Tips to Keep Your Teen Safe
- Inexperienced Driver – Practice driving with your teen at least 30 minutes a week; drive on different kinds of roads including highways and rural roads.
- Teen Passengers – The more passengers in the car, the higher the chance of getting into an accident; follow your state’s GDL system for passenger limitations; keep this rule for the first six months your teen drives.
- Nighttime Driving – More accidents occur during the night for all age groups. Establish a time your kid will be off the road each night.
- Seat Belts – Sounds like basic stuff to put on your seat belt, but enforcing your young driver to buckle up will cut their risk of being badly injured by half.
- Distracted Driving – Young drivers under the age of 20 are the most at risk for distraction-related fatal crashes.
- Drowsy Driving – According to the CDC, nearly 70% of high school and college students report getting less than the recommended amount of sleep per night Know your kid’s schedule and promote healthy sleep habits.
- Reckless Driving – Speeding, doing doughnuts in parking lots, and more.
- Impaired Driving – Drinking and driving or while doing drugs.
- Sign a Parent-Teen Driving Agreement, which establishes agreed-upon driving rules that every driver in your household promises to follow.
- Stay involved! Practice driving with your teen at least 30 minutes of practice per week.
- Talk about your driving agreement with the parents of your kid’s friends, so they’re informed.
The National Safety Council has a “5 to Drive” program that establishes five rules that you and your teen driver can agree to follow.
- No cell phones while driving
- No passengers
- No speeding
- No drinking
- No driving without a seat belt
Well, congratulations on your teen turning 16!
We hope this post has provided you with some great information to help protect your teen and keep them safe while they’re getting to where they’re going.
*While we make every effort to keep our site updated, please be aware that “timely” information on this page, such as quote estimates, or pertinent details about companies, may only be accurate as of its last edit day. Huntley Wealth & Insurance Services and its representatives do not give legal or tax advice. Please consult your own legal or tax adviser.