Best car insurance for 16-year-olds

Of major carriers, Erie insurance offered the cheapest rates for 16-year-old drivers, at an average of $3,145 a year.

Stephanie Nieves author photo

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Stephanie Nieves

Stephanie Nieves

Property and Casualty Insurance Expert

Stephanie Nieves is an insurance editor at Policygenius in New York City, specializing in home and auto insurance. Her work has appeared in Business Insider, PayScale, Fairygodboss, and The Muse.

Published November 9, 2021|3 min read

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Car insurance for teenagers can be extremely costly — some companies charge teen drivers tens of thousands of dollars for coverage — but others charge a lot less than that, which is why it’s important to research the cheapest options before you buy. 

Our analysis found that, out of the largest car insurance companies in the U.S, Erie insurance offered the cheapest rates for 16-year-old drivers, at an average of $3,145 a year. But car insurance rates vary person-to-person, so you should always compare quotes from multiple companies to make sure you’re getting the most coverage for the lowest price.

Key Takeaways

  • Of major companies, Erie insurance offered the cheapest rates for 16-year-old drivers, at an average of $3,145 a year

  • Teens may be able to get cheaper coverage from smaller, regional companies

  • It’s usually a lot cheaper to add a teen to your car insurance policy than it is for them to get one of their own

  • 16-year-old drivers can save on car insurance by comparing quotes from multiple companies before deciding on one and taking advantage of discounts

10 cheapest car insurance companies for 16-year-old drivers

Because car insurance companies consider inexperienced teen drivers a risk to insure, full coverage car insurance for a 16-year-old can cost thousands of dollars a year. But it’s still possible to get an affordable policy for a 16-year-old, the key is shopping around. 

Here’s what the 10 largest companies in the U.S. charge for full coverage car insurance for a 16-year-old:

Car insurance companyCost for 16-year-old driver
Erie$3,145
State Farm$3,822
American Family$4,522
GEICO$4,572
USAA$4,603
Nationwide$5,605
Travelers$7,215
Allstate$8,501
Progressive$9,910
Farmers$10,488

Compare rates for 16-year-old drivers

For teenage drivers, an insurance policy can be especially pricey since their lack of driving experience means they may be more likely to get into an accident. But the older they get, the cheaper their car insurance starts to become, until rates level out around age 25.

AgeGenderAverage annual cost
16Female$6,351
Male$7,207
18Female$4,594
Male$5,268
21Female$2,548
Male$2,867
25Female$1,875
Male$1,983

How to save money on car insurance as a 16-year-old

As we’ve mentioned before, car insurance for a teen can be pricey but there are still ways to save on costs:

1. Add your teen to an existing policy

If your child still lives with you, you can save money on car insurance by adding them to your car insurance policy rather than having them apply for coverage on their own. A 35-year-old single mother was quoted $1,350.72 per year for a full coverage policy. When we added her 16-year-old daughter to the policy, her premium came out to $2,223.72, which means she’d only pay $873 more to add a child to her policy

2. Take advantage of discounts for teen drivers

Most car insurance companies offer discounts that can lower rates, like savings for full-time students who maintain above a certain GPA, discounts for taking a driver’s education course, or special programs that teen drivers can sign up for in exchange for money off. Families with a teen who’s away at school without a car can also save.

3. Compare quotes from multiple companies

Shopping around for car insurance coverage and comparing options from multiple companies can help you find the best rates. By comparing quotes, you’ll be able to find the right coverage at the cheapest price.  

4. Drop comprehensive and collision

If the car your teen is driving is an old clunker that isn’t worth repairing or replacing if it’s damaged in an accident, you may want to consider dropping comprehensive and collision coverage. You can still keep comprehensive and collision coverage for other cars on your policy, but dropping those coverages for one can save you hundreds of dollars on your premium.

Frequently Asked Questions

Should I add my 16 year old to car insurance?

Yes, you should add your child to your car insurance policy once they become a licensed driver, but be aware that your premium will go up significantly. Even with the spike in insurance rates, though, it’s still usually cheaper to add a child to your policy than it is for them to get one of their own.

Should I adjust my coverage when adding a teen driver?

When you’re adding a teen driver to your policy, you can adjust your coverage options and limits to reflect the increased risk. For example, we recommend $100,000 in property damage liability coverage, but if you think the chances of your child causing an accident are high, you can raise your liability limits so you’re fully protected should you need to use that coverage.

What happens if you don’t add your teenager to your insurance?

If you don’t add your child to your insurance policy, they will not be covered if they drive your car. If they cause an accident while they’re driving your car and aren’t on your policy, they — and you — could be left footing the bill all on your own. If your child is licensed and they live with you, they should be added to your policy (or have one of their own).

When can I take my child off my car insurance?

You should take your child off your car insurance policy when they move out and buy their own car and policy. But if they’re still living with you and driving your car, you can keep them on your policy indefinitely.

Methodology

Policygenius has analyzed car insurance rates provided by Quadrant Information Services for every ZIP code in all 50 states plus Washington, D.C. For full coverage policies, the following coverage limits were used:

  • Bodily injury liability: 50/100

  • Property damage liability: $50,000

  • Uninsured/underinsured motorist: 50/100

  • Comprehensive: $500 deductible

  • Collision: $500 deductible

In some cases, additional coverages were added where required by state or insurer. Our sample vehicle was a 2017 Toyota Camry LE driven 10,000 miles/year.

Some carriers may be represented by affiliates or subsidiaries. Rates provided are a sample of costs. Your actual quotes may differ.