The ultimate car insurance guide for teens

father and teen with car

When your teenager becomes a fully licensed driver, it means they’re allowed to hit the road on their own, which can be stressful for parents, the teen themselves, and even other drivers. The other hard part about being a teen driver? Figuring out insurance. There are so many options out there that all offer different coverages at varying rates, but don’t worry, we’re here to demystify car insurance for teens and their families.

When teenagers need car insurance

Teenagers don’t need car insurance when they only have their learner’s permits and are learning to drive. However, they will need insurance before they get their license and drive on their own. When your teen gets their learner’s permit, it’s a good idea to start contacting your insurance company and figuring out how much it will cost to add them to your policy when they turn 16. This also gives you time to shop around for other policies to find the best price.

Most insurance companies won’t let teens have their own insurance policy until they’re 18, so the chances are that even if the teen owns their car, they’ll have to go on their parents’ policy or have a parent or guardian cosign on a new policy. If a teen moves out with a car (for instance, if they’re going to college in another city or state), they will need their own policy at that time.

How car insurance protects teen drivers

Because teens are new, risky drivers, insurance experts recommend getting them a lot of coverage to make sure they’re protected in the event of an accident. Car insurance will help safeguard teenagers if they cause bodily or property damage to others. Just getting the state-required minimums for your teen driver may lead to a hit on your finances if they’re in an accident.

Here are the different coverages we recommend getting for teenage drivers:

  • Liability coverage – You’ll most likely have to get this one because most states require minimum liability coverage. Liability coverage has two main types: Bodily Injury (BI) and Property Damage.
    • Bodily injury liability pays for any injuries or death that the policyholder or driver is responsible for after an accident. Bodily injury liability limits are broken out into two numbers (i.e., $25,000/$50,000). The first number is the highest amount your insurance will pay per person and the second is the maximum your insurance will pay for all injuries suffered per incident.
    • Property damage liability covers drivers if they damage someone else’s property, like their car or house. It also provides a legal defense if someone files a lawsuit against you. It’s the third dollar amount you may hear when people are talking about the liability coverage limits (i.e., $25,000/$50,000/$20,000). Property damage liability does not cover damages to your vehicle.
  • Collision coverage – This is the coverage that covers damage to your car when you collide with another vehicle or object. If you hit something, your deductible will apply (collision deductible options typically range from $50 to $2500).
  • Comprehensive coverage – Comprehensive coverage helps cover damage to your car that’s not from a collision, like if it is stolen or damaged by flood, fire, animals, and falling objects.
  • Uninsured/underinsured motorist coverage – This protects you if you’re in an accident and the at-fault driver doesn’t have any insurance or doesn’t have enough liability coverage to cover the damages.
  • Personal Injury Protection (PIP)PIP/MedPay coverage pays the necessary medical bills for the driver and/or passengers after being hurt in a car accident, no matter who is at fault.
  • Upgraded accident forgiveness – Accident forgiveness refers to a policy feature for some carriers that’s automatically earned if a customer goes three straight years without having an accident (this means no accidents for any driver on the policy, not just the main policyholder). After being accident-free for three years, the customer is eligible to have their next at-fault accident waived from their policy. Upgraded accident forgiveness is offered by some carriers too, like Elephant. Instead of waiting three years for an accident waiver, Upgraded Accident Forgiveness would start as soon as the policy begins. To qualify, there can’t be any chargeable or non-chargeable accidents from the past three years for any driver on the policy.
  • Rental reimbursementRental reimbursement is coverage that is available when your vehicle is not drivable or needs repairs after a comprehensive or collision claim. Rental reimbursement provides the driver with a rental car while their vehicle is being repaired or replaced.

Why car insurance is more expensive for teenagers

Car insurance is more costly for teenagers simply because teens are riskier drivers. They have less experience on the road, so insurance companies deem them as a higher accident risk. According to The Zebra, the average teen pays $1,332 for car insurance on their parent’s policy every six months. Insurance companies see male teen drivers as riskier than females, so males pay an average of $1,407 for a six-month insurance policy versus $1,257 for females.

You may have heard that car insurance gets cheaper once someone turns 25, but that’s not entirely true. Yes, you may be paying less for insurance than when you were a teen, but the number doesn’t immediately go down when you turn 25. Instead, most people will see their rates gradually drop as they age. Age is just one factor that determines the cost of an insurance policy. Other factors that affect premiums include car make and model, gender, zip code, and mileage.

So, are teenagers really riskier drivers than everyone else on the road? Statistics say yes. According to The Insurance Institute for Highway Safety (IIHS), the teen driver crash rate is nearly four times higher than for drivers 20 and older per mile driven.

Plus, teens may engage in riskier behaviors while driving. A 2019 survey found that among U.S. high school students who drove, 39% texted or e-mailed while driving at least once during the 30 days before the survey. Alcohol is another factor in teen driving accidents. According to the National Highway Traffic Safety Administration (NHTSA), car crashes are the leading cause of death for teenagers. A quarter of those crashes involve a driver under 21 who’s been drinking. They found that in 2018, 24% of drivers aged 15-20 who were killed in crashes had BACs of .01 or higher. If you’ve been drinking, don’t drive. The NHTSA recommends planning for a safe ride home, like with a sober friend or via a rideshare app, if you know you’re going to be under the influence.

What teenagers should do when involved in an accident 

What happens if you get into an accident as a teen driver? First, don’t panic. We know it can be scary, especially if you’ve never been in an accident before, but you need to be calm enough to follow a few important steps post-accident:

  1. See if anybody is hurt. If they are, call 911 ASAP.
  2. Move your vehicle off the road/out of traffic if it’s drivable and turn on the hazard lights.
  3. If it’s not possible to drive the vehicle, call roadside assistance or a towing company to move the car.
  4. Call the police to report the accident.
  5. Exchange contact and insurance information with the other driver.
  6. Take photos of the accident.
  7. Write down any other details about the accident in your phone’s Notes app. Include the other driver’s contact info, their vehicle’s make and model, the location, the weather at the time of the accident, the date and time. Also, include any contact information for witnesses.
  8. Get a copy of the police report.
  9. Call your insurance company to start the claims process.
  10. Let the insurance company guide the process from there.

Teenagers must understand they should NOT accept or assign blame when chatting with the other driver. Let the police and the insurance companies work out who is at fault.

How to get cheap car insurance for teens and college students

Like we mentioned above, car insurance for teenagers is usually more expensive, but it doesn’t have to be outrageous. You can find an affordable policy that works for your teenager and budget.

The first thing we recommend is shopping around for the best price. While most insurance carriers use the same factors to determine a driver’s rate, they all weigh the factors differently, which is why you’ll find different prices depending on which carrier you use.

As you’re shopping around, ask different carriers about the discounts teen drivers can take advantage of. For example, Elephant offers a good student discount. High school or college students getting great grades see lower insurance premiums.

There’s also the “student away” discount that benefits teens in college. If you have a teenager attending school at least 100 miles away from home who isn’t actively driving a car at the moment, you don’t have to pay the same rates as if they were regularly driving.

Other car insurance discounts teenagers might be eligible for include:

  • Safe driving habits
  • Safe Car
  • Used car
  • Multi-car (take advantage of this for teens still on their parents’ insurance!)
  • Diminishing deductible

When it’s time for a teenager to start driving on their own, it can be a stressful time for their family and the teen, especially with all the insurance options out there. But with Elephant, you can get an affordable policy that helps protect your teen driver. Get a quote online, or easily add your teen driver to your existing policy here.

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