Car Insurance for 16-year-olds: Quotes, Discounts (2023)

Insuring a teen driver can be costly, and adding one to your policy may mean paying quite a bit more each month for coverage. However, the cost to insure a 16-year-old driver varies by insurance company, and shopping around can help minimize your costs.

Are you planning to add a teen to your car insurance policy soon? Use this guide to learn about the average teen car insurance rates, the factors that affect them, and the steps you can take to reduce them.

How much does car insurance for a 16-year-old cost?

It sounds costly, for sure — especially when added to the premiums already in place for your coverage (or anyone else’s in your household, for that matter). Remember, though: This is just an average. 
The exact amount you’ll pay per month will depend on your auto insurance company, your teen’s gender, the type of car they drive, how often they drive, the driving profile of others on the policy, and many other factors.

Premiums for teens also vary widely by state. Insurify’s data shows that rates range anywhere from $111 per month on the low end (Massachusetts) to $440 per month on the high end (Louisiana).

How do insurers calculate car insurance quotes?

Insurance companies base the costs of your policy on how risky they consider you and the other insured parties to be as drivers — meaning how likely they think it is that you’ll be in an accident or need to file a claim.

To assess this risk, insurers consider many factors, including^[1]:

• Age of the drivers: Older, more experienced drivers tend to have fewer accidents and therefore qualify for lower premiums. Young drivers — those under 25, to be exact — are considered the highest risk and are charged the highest premiums.

• Gender of the drivers: Women tend to be safer drivers, according to the Insurance Information Institute, which can often equate to lower insurance premiums. Male drivers, on the other hand, are more likely to get in accidents and be charged with DUIs. They’re charged higher premiums as a result. The average premium for women under 25 is currently $393 per month, according to Insurify’s proprietary insurance data. For men, it’s $438. That’s a difference of $540 per year. Many states, like Massachusetts and Hawaii, have outlawed this practice.

• Location of the driver’s primary residence: Insurance companies also assess the risk of your location — how dangerous the roads are, how common theft and vandalism are in the area, and so on. Local weather, costs of car repair and medical treatments, and other regional factors also play a role. Drivers in more urban areas typically see higher premiums, while those in suburbs and rural towns pay lower ones.

• Make, model, and age of the car: Vehicles carry different levels of risk. Brand-new cars, luxury cars, or very old cars lacking certain pieces of safety equipment may be charged higher premiums than other vehicles.

• How the car is used: Cars that are used often or for long distances come with a higher risk of accidents and usually carry higher premiums as a result. Vehicles used only occasionally or for short distances — like a five-mile drive to and from school, for example — typically come with lower costs.

Your driving record and credit score come into play as well, though these probably won’t be a factor in your teen’s pricing, at least in the beginning. If they maintain an accident-free record moving forward, though, it could help lower your premiums come renewal time.

If you want to reduce the costs of your car insurance — even when a teen driver is involved — you have many ways to do it.

First, look for insurance companies that offer discounts. Some common car insurance discounts teens may be eligible for include:

• Good student discount: This is typically available to students who are full-time high school or college students and maintain a B average or higher, are in the top 20% of their class, or are on the honor roll or dean’s list. The exact discount varies, but GEICO’s good student discount could get you up to 15% off your premium.^[2]

• Driver training discount: Many insurance providers offer discounts for drivers who complete an approved driving education or defensive driving course. The belief is that these courses make for safer driving, thereby lowering the risk of an accident (and a subsequent insurance claim).

• Safe driving discount: Drivers who either remain accident-free for an extended period, agree to use a safe driver tracking app, or regularly use seat belts can often qualify for discounts (up to 22% in some cases).

• Car-based discounts: Having certain safety features on your teen’s car can help lower rates, too. Insurance providers may offer discounts for having airbags, antilock brakes, anti-theft systems, daytime running lights, and more. You can also get a discount for driving a brand-new vehicle.

• Student away at college discount: If your teen driver is attending and living at a college 100 miles or more away, they may be eligible for a discount on their auto insurance premium. Keep in mind that they’ll still need to have your address as their primary residence to stay on your policy.

• Membership discounts: Being a member of certain groups, including many fraternities and sororities, can sometimes qualify you or your teen for discounts.^[3]

• Volunteer discounts: Some companies offer discounts to teens who do volunteer work. American Family, for example, offers a premium discount for drivers under 25 who complete at least 40 hours of nonprofit volunteer work annually.^[4]

Having multiple policies with the same insurance company (car insurance plus home insurance, for example) will also typically qualify you for a lower premium, as will increasing your deductible or credit score. If you’re a military member or federal employee, your family may qualify for additional discounts, though this varies by insurance company.

Learn More: Car Insurance Discount Guide

Cheapest car insurance companies for 16-year-olds

The insurance company you choose plays a big role in the amount of your premium. For instance, an analysis of Insurify’s data found that 16-year-old drivers have an average premium of just $116 per month with Erie Insurance. Meanwhile, premiums through Amica average more than $500 a month — nearly four times as much.

Because of this difference, it’s always important to shop around for your insurance policy. Get quotes from at least a few insurers, and compare discounts, too. As you can see in the table below, these can make a big difference in your monthly premiums.

Here are average monthly car insurance rates for 16-year-old drivers from some popular insurance companies:

Cheapest states for insuring 16-year-olds

The state you live in influences the cost to insure your teen driver — as well as anyone else in your household. This is because crime and accident rates, weather conditions, and repair, medical, and litigation costs vary widely from one place to the next. All these factors affect the risk your policy comes with and, therefore, the cost of your premiums.

Here’s a look at how car insurance rates vary by state. Below are the top 15 cheapest states to insure a 16-year-old driver in, according to Insurify’s proprietary data.

What kind of insurance policy should a 16-year-old have?

It’s important to get the right type and amount of insurance for your new driver, as this protects both you and your pocketbook. To start, check your state laws. Most require a minimum amount of insurance each driver must legally have to operate a vehicle in the state. 

In Texas, for example, you must have at least $30,000 in bodily injury liability per person and $60,000 per accident. You’re also required to have $25,000 for property damage liability.^[5]

Keep in mind that these are only the minimums. Since teen drivers generally have a higher risk of being in an accident, you may want additional coverage to offset this risk. Most states only mandate that you have liability insurance, which covers other parties in an accident, not you. For more complete coverage, you might want to consider buying a full-coverage policy, which includes collision and comprehensive coverage. This covers damages to your own vehicle.

To determine what coverages your teen needs and how much to get, consider^[6]:

• Your assets: How much do you have in savings? Would you have the funds for a high deductible or repairs beyond your policy’s cap if an accident occurred? If you don’t have much set aside, you may want extra coverage just to be safe.

• Their age and experience: If your teen has just started driving, they don’t have much experience on the road and are more likely to get into an accident. Upping your coverage can provide extra protection during these riskier years and ensure you can handle the financial consequences of an accident or liability issue. You can always decrease coverage as they gain more driving experience later on.

• The type of car they’re driving: If your teen is driving a new or more expensive car, you may want to ensure you have the right coverage to pay for repairing or replacing the vehicle should something go awry. Extra coverage may not be worth it if your teen drives an older car, though.

You may also want to think about your child’s personality and habits specifically — how responsible they are, how well they did on their driving test, and how likely they are to drive while texting or otherwise distracted. If you feel they’re at a higher risk of accidents than other teens may be, increasing your coverage may be wise.

Check Out: How Long Does an Accident Affect Your Insurance Rates?

How to buy car insurance for a 16-year-old

It’s typically best to add your teen to your existing car insurance policy, as it’s usually cheaper than getting them a policy on their own. It also may qualify you for a multi-vehicle discount, which will reduce the increase in your premium.

Before you do this, though, compare a few other options. There’s a chance your current insurance company may not have the best deal once your young driver is on the policy. Get quotes from at least a few different insurance providers, and always ask about potential discounts you may be eligible for. Some can make a big difference in your monthly premiums.

If you decide to move forward with adding your teen to your existing policy, call your insurance agent, and they can help.

What to look for in an insurance policy for a teen

Insurers offer many types of coverages you might want for your teen driver, including liability, collision, and comprehensive coverage.

Here’s a breakdown of some coverage options to consider^[5]:

• Liability: This covers your driver if they injure someone or damage property while behind the wheel. Most states require you to have liability coverage before you get on the road.

• Collision: Collision coverage pays for repairs if your car is damaged in an accident, or, even a full replacement of the vehicle in the event the car is totaled.

• Comprehensive: This coverage pays for repair or replacement if your car is damaged by fire, weather, an act of vandalism, or another non-collision event.

• Medical payments: Medical payments coverage goes toward the driver’s and any passengers’ medical bills if they’re hurt in an accident.

• Personal injury protection: Also called PIP, this coverage is like medical payments but more comprehensive. It can go toward non-medical costs and lost wages when someone is injured.

• Uninsured/underinsured motorist: This coverage is in case your teen is hit by a driver who’s uninsured or lacks enough coverage to pay for the full costs of repairs in an accident. It can also be useful in hit-and-run cases.

• Towing and labor: If your teen is stranded, this coverage pays for jump-starting and towing their vehicle. It may also provide you peace of mind if your teen drives long distances.

• Rental reimbursement: If your teen’s car is stolen or being repaired, this coverage will pay for a temporary rental vehicle. It’s usually capped at a certain price per day.

If you’re not sure what coverage to get for your teen driver, consider speaking to an independent insurance agent. They can give you personalized guidance based on your budget and needs.

Learn More: Rental Car Insurance: Do You Need It?

Insurance and driving laws for 16-year-olds

The exact laws regarding young drivers vary by state. In Texas, for example, your teen won’t legally need insurance coverage until they’ve graduated from their learner’s permit and have an official license. In other states, though, it may be required earlier. 

To see what the law is in your state, visit your Department of Motor Vehicles (DMV) or Department of Public Safety (DPS) website. It should have resources that can guide you. To ensure you’re following your state’s laws, you can check out our page on car insurance requirements and laws by state.

Keep in mind that adding your permitted teen to your policy might be wise — even if it’s not legally required. If they were to cause an accident while uninsured, your insurance company may deny coverage and refuse to pay for any repairs. It could also void your policy and coverage entirely.^[7]

See Also: What Are the Best Cars for Teens to Drive?