Our analysis found that adding an inexperienced teen driver to a car insurance policy raised rates by 129%.
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byFabio Faschi, PLCS, SBCS, CLCS
Fabio Faschi, PLCS, SBCS, CLCS
Property & Casualty Insurance Expert
Updated February 23, 2021|7 min read
Table of Contents
If you own a car, you need car insurance to go along with it. A minimum amount of car insurance is legally required in most states, and even when car insurance isn’t required by law, you still need to be able to pay for any damage or injuries you cause while behind the wheel — so car insurance is still important financial protection.
But car insurance premiums can be pricey, especially for new drivers. Teens and young adults are notoriously hard to insure.
Adding an inexperienced new driver to an existing policy raised rates by an average of 129%, our analysis found
New drivers include teens, inexperienced adult drivers, and immigrants and foreign nationals without U.S. driver's license
To lower your car insurance rates as a new driver, maintain a clean driving record, complete driver’s education courses and shop around for better rates, even if your policy’s not up for renewal
Car insurance companies base your premium on how much of a risk you’ll be to insure, and since young and inexperienced drivers are more likely to have an accident and file a claim, they’ll see higher rates than more experienced drivers. For parents, adding a teenage driver to your plan can raise your premiums by nearly 129%.
Ready to shop car insurance?
So is it impossible to find affordable car insurance for new drivers? Insurance costs vary, and you may need to shop around a bit to find cheaper coverage if you’re a new driver, but there are some steps you can take to ensure you’re getting the best rates possible.
While there’s no such thing as “new driver insurance,” most car insurance companies consider new drivers to be the following:
Teens or young adults who just receive their driver’s license
Older adults who are first-time drivers
Immigrants and foreign nationals who are recently licensed in the U.S.
As we mentioned above, car insurance premiums are calculated based on a number of individual factors that insurers use to estimate how much of a risk you’ll be to insure. Those factors include:
Your driving history, including any recent accidents or violations
Your credit score
The make and model of car you drive
Your address and ZIP code
Your insured history, specifically whether you’ve had any lapses in car insurance
Teens and young adults are seen as riskier and more likely to have an accident, which means they’ll pay higher rates than older drivers who’ve had more time on the road.
The same is true for new, inexperienced drivers: If you’ve only been driving for a short time, your inexperience makes you more of a risk on the road. Even if you’re a safe driver, you haven’t been driving long enough for the insurance company to know, and your lack of experience will lead to higher rates.
The good news is that if you’re a teen or a new driver, your insurance costs will fall over time until you turn 25, or until you have several years of safe driving under your belt (more on this later).
New driver costs will vary depending on where you live, who else is on your policy, and how long you’ve been driving. But generally, adding a new driver to a car insurance policy will cause your rates to go up pretty dramatically..
If we take a single mother, age 31, with a clean driving record and a 2014 Toyota Camry, the average annual rate quoted for a “full coverage” car insurance policy is $1,416 at three major insurance companies. But when a teen driver is added to the same policy, the average cost increases to $3,204 a year — nearly $1,800 more or 129% higher.
However adding a teen driver to an existing policy is probably still less expensive than if they went out and got their own policy — we found that an 18-year-old woman with a clean driving record was quoted $4,682 for her own car insurance policy.
|Driver Details||Average cost of a 1-year policy|
|31-year-old woman with a 16-year-old driver||$3,204|
Ready to shop car insurance?
Finding affordable car insurance will be a challenge for new drivers and newly licensed teens, but that doesn’t mean it’s impossible to get covered. Here are some steps you can take to find affordable insurance for new drivers:
The first thing to do to keep your teen driver’s rates as low as possible is to add them to your existing car insurance policy instead of them getting their own policy. It may raise your rates to include them on your policy, but it will be cheaper than if they, or you, were paying for a separate one.
Adding a new driver to a car insurance policy is usually a quick and easy process. As long as your residence is their primary residence (and even if they’re living in a dorm, it probably is), your teen or young adult child can be on your policy.
Once they officially move out, however, they’ll need their own separate policy. Another bonus: if you are adding a vehicle as well as a driver, you could get a multi-car discount for insuring several cars.
Keeping a clean driving record is one of the most important steps you can take towards more affordable rates. If you’re a teen driver, or a new driver, every year of safe driving will help lower your rates until your age and experience are no longer factors in your car insurance costs. After a certain number of years of accident-free driving, you’ll likely qualify for a safe driver discount.
Conversely, accidents and violations on your record will raise your rates and make it harder to find affordable coverage. If you’re a teen driver with a spotty record, your rates might not fall as you approach 25.
Combining young, inexperienced drivers and expensive or performance cars is a recipe for high car insurance rates. Keep your costs lower by choosing a vehicle with good safety features and high crash test ratings.
If you’re getting a car for your teen, make sure you’re starting them off with something safe and reliable.
If you have luxury vehicles or sports cars, it may make sense to compare the costs of adding your teen to your policy or getting them a separate policy to see which is cheaper.
Another strategy is to let your teen drive an older, cheaper car and buy them their own policy that skips out on collision coverage and comprehensive coverage.
Dropping comp and collision means you won’t get anything if the car is damaged or totaled, but stripping your car insurance to just the basics — like liability coverage and underinsured/uninsured motorist coverage — can significantly lower your premiums.
Another surefire way to ensure you’re getting the best rates out there is to shop around for coverage from multiple carriers, do a thorough quote comparison and then choose the car insurance company that can offer the most coverage at the lowest cost.
You can shop around by applying with multiple carriers one-by-one and getting quotes from all of them, or by going through an independent insurance agency like Policygenius. An independent agency can help you figure out how much coverage you actually need and then choose the best car insurance company for you.
Every major car insurance company offers a range of discounts, and those discounts can be especially valuable to new drivers, who may be considered high risk.
Check with your carrier to see the discounts they can offer you, which may include a good student discount for drivers who are full-time students and maintain above a certain GPA, or driver’s education discounts for drivers who complete a defensive driving course. Young drivers who get their own policies can also bundle their car insurance with a renters insurance policy for a multi-policy discount.
As we mentioned above, teen and young adult drivers typically pay higher rates for car insurance. Generally, the younger the driver, the more expensive it will be for them to get car insurance coverage. But rates for young drivers tend to drop until that driver turns 25 and is no longer part of that high-risk group.
Unlike, say, life insurance, which gets more expensive the older you are when you apply, car insurance tends to trend down until 25 and then stay relatively unaffected by age until rates start to go up again for drivers 65 and older. The below table shows how rates fell for a one-year policy as our sample drivers got older:
|Driver Details||Annual cost of a 1-year policy|
|Female, age 18, unmarried renter||$4,682|
|Male, age 18, unmarried renter||$4,522|
|Female, age 30, unmarried homeowner||$1,136|
|Male, age 30, unmarried homeowner||$1,038|
|Female, age 70, married homeowner||$838|
|Male, age 70, married homeowner||$798|
However your rates won’t automatically go down at 25: If you’ve had accidents or violations, you may not see your rates fall even once you’re no longer considered a young or new driver. That’s just one reason why it’s so crucial to maintain good driving habits, even when you’re still new on the road.
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