How Much is Car Insurance for 16-Year Old Drivers?

For families who have teenagers learning to drive or have a license already and need insurance, be prepared to increase your budget for car insurance because the Average Annual Insurance Cost for a 16–Year–Old driver is $670. Keep in mind that this is the cost of adding a 16 year old driver  to the parents’ policy. If you were to put the teen driver on his or her own policy, the cost of insurance could be substantially more as you can see from the below chart.

There are many factors that impact these costs aside from location. The insurance company, parent or guardian policy, and vehicle all come into play when determining the cost of insuring your teen.

Below, you will see charts representing average annual insurance costs for a teenager by state. These costs are loosely based on a 16-year old driving a common 2017 mid-size sedan with a $500 deductible, $100,000 injury, $300,000 comprehensive injury, and $100,000 property damage coverage. 

When identifying family coverages, the assumption includes an adult male over 40-years old driving the same car and adding the 16-year old teenager to the policy with the same coverage listed above. As you will see, it is almost always more beneficial to add a teen to an existing guardian’s policy since the older individual will have better discounts and a longer history to evaluate.

Average Annual Insurance Cost for 16-Year Olds (*Typical Liability Coverage) Add approximately $750 per year for male teenagers
State	Teen Only	Guardian Only	Guardian w/ Teen Added
Alaska	$5,500	$1,300	$3,400
Alabama	$7,000	$1,500	$3,000
Arkansas	$7,300	$1,600	$3,200
Arizona	$6,300	$1,500	$3,400
California	$7,000	$2,000	$4,200
Colorado	$7,600	$1,700	$3,300
Connecticut	$9,900	$1,900	$4,900
DC	$7,800	$1,700	$3,300
Delaware	$7,900	$1,800	$3,200
Florida	$8,200	$2,500	$4,900
Georgia	$7,500	$1,600	$3,500
Hawaii	$1,500	$1,300	$1,400
Iowa	$4,300	$1,000	$2,200
Idaho	$5,400	$1,100	$2,200
Illinois	$5,500	$1,200	$2,600
Indiana	$5,700	$1,200	$2,500
Kansas	$5,900	$1,400	$2,600
Kentucky	$9,500	$1,700	$3,500
Louisiana	$10,900	$2,500	$5,500
Massachusetts	$5,400	$1,500	$3,500
Maryland	$6,300	$1,600	$3,000
Maine	$4,300	$900	$1,800
Michigan	$14,600	$2,950	$5,900
Minnesota	$5,100	$1,200	$2,500
Missouri	$6,000	$1,400	$2,600
Mississippi	$6,900	$1,500	$2,800
Montana	$6,400	$1,500	$2,200
North Carolina	$3,500	$1,200	$2,800
North Dakota	$5,500	$1,200	$2,200
Nebraska	$5,300	$1,200	$2,000
New Hampshire	$6,600	$1,200	$2,700
New Jersey	$6,500	$1,600	$4,000
New Mexico	$7,300	$1,400	$3,000
Nevada	$8,900	$2,000	$4,300
New York	$5,000	$1,800	$3,500
Ohio	$5,000	$1,000	$1,900
Oklahoma	$7,500	$1,800	$3,700
Oregon	$7,500	$1,500	$3,400
Pennsylvania	$5,800	$1,500	$3,200
Rhode Island	$10,000	$2,000	$4,600
South Carolina	$6,100	$1,600	$3,400
South Dakota	$6,200	$1,200	$2,100
Tennessee	$8,000	$1,200	$3,000
Texas	$6,800	$1,600	$3,500
Utah	$6,300	$1,300	$2,500
Virginia	$4,200	$900	$2,100
Vermont	$4,500	$1,000	$2,400
Washington	$5,900	$1,300	$2,700
Wisconsin	$6,000	$1,100	$2,400
West Virginia	$5,600	$1,400	$2,600
Wyoming	$4,600	$1,400	$2,400

Buying the Cheap Stuff

These numbers can be jaw-dropping to some. There is an alternative for those looking to reduce their annual insurance costs. The trade-off for less expensive insurance premiums is either higher deductibles or less coverage. In fact, many less costly plans cover the costs of damage to other vehicles or injuries to other drivers involved in the accident but will not pay for your costs.

It is important to note that each state has its own minimum insurance coverage requirement, which leads to significant disparity in annual costs. This can be seen in the chart below.

Average Annual Insurance Cost for 16-Year Olds (Minimum Coverage Required by Law) Add approximately $400 per year for male teenagers
State	Teen Only	Guardian Only	Guardian w/ Teen Added
Alaska	$1,600	$300	$1,000
Alabama	$2,500	$500	$1,000
Arkansas	$2,500	$500	$1,100
Arizona	$2,200	$500	$1,200
California	$2,000	$600	$1,100
Colorado	$2,700	$500	$1,100
Connecticut	$4,700	$900	$2,300
DC	$3,400	$700	$1,400
Delaware	$3,400	$800	$1,600
Florida	$3,300	$1,000	$2,000
Georgia	$2,700	$600	$1,400
Hawaii	$500	$400	$800
Iowa	$1,400	$300	$900
Idaho	$2,000	$400	$1,100
Illinois	$2,300	$500	$1,000
Indiana	$2,200	$400	$900
Kansas	$2,000	$400	$1,200
Kentucky	$3,300	$500	$1,900
Louisiana	$3,500	$700	$1,400
Massachusetts	$2,100	$600	$1,400
Maryland	$2,900	$800	$1,700
Maine	$1,700	$400	$2,800
Michigan	$6,600	$1,600	$1,200
Minnesota	$2,500	$600	$900
Missouri	$2,300	$400	$1,000
Mississippi	$2,600	$400	$600
Montana	$2,000	$400	$1,300
North Carolina	$1,600	$500	$700
North Dakota	$1,700	$300	$700
Nebraska	$1,900	$400	$1,200
New Hampshire	$2,800	$500	$1,900
New Jersey	$2,800	$800	$1,100
New Mexico	$2,600	$400	$1,500
Nevada	$3,100	$500	$1,600
New York	$2,300	$800	$1,700
Ohio	$2,000	$400	$1,100
Oklahoma	$2,500	$500	$2,000
Oregon	$4,000	$800	$1,100
Pennsylvania	$2,000	$500	$2,000
Rhode Island	$4,000	$700	$1,100
South Carolina	$2,000	$500	$600
South Dakota	$1,600	$300	$1,200
Tennessee	$3,000	$400	$1,400
Texas	$2,400	$600	$1,100
Utah	$2,700	$500	$800
Virginia	$1,600	$400	$800
Vermont	$1,400	$300	$400
Washington	$2,400	$400	$1,100
Wisconsin	$2,100	$400	$800
West Virginia	$2,100	$500	$1,000
Wyoming	$1,300	$300	$600

Why Is Car Insurance Rates So High for Teens

The rates for car insurance are set using an algorithm or human judgment that weighs the risk of insuring an individual. The factors that might be considered include driving experience, history of accidents, place of residence, vehicle cost and the type of vehicle.

As you can imagine, a first time driver fails the “driving experience” part of the equation. However, it is notable that teens today are much safer drivers than those who started driving 30 years ago were. Unfortunately, it is still a widely known statistic that teens are more likely to be involved in accidents than any other subset of drivers.

While teens are generally safer than their parents were at the same age, the influence of impaired driving and in-car distractions (friends, cell phones, etc.) continue to make car accidents the leading cause of death for teens in the United States. 

Can my Teen Purchase And Insure Their Own Vehicle?

The simple answer is yes with some caveats. Minors (those under the age of 18) are not allowed to enter into the type of contracts required to purchase or insure a vehicle. However, many states allow the guardian to act as co-signer to the title, loan, and insurance for a vehicle. 

Some states have laws stating a child must be 17 or 18 to hold the title of a vehicle, even with a co-signer. Check with your state department of motor vehicles or similar agency to determine age limitations in your area.

Adding a 16-Year old to Your Insurance Policy

We have clarified that adding a teen to an existing insurance policy is by far the most economical choice. Adding the teen offers them the opportunity to function under the umbrella of the guardian’s driving history, length of relationship with the insurance company, and enjoy any add on discounts. 

While the rates will be lower than putting a teen on their own policy, you should still anticipate a significant hike in your monthly or annual bill. Using the method in the previous section (the assumption includes an adult male over 40-years old driving the same car and adding the 16-year old teenager to the policy with the typical coverage) some of the cost increases are still a bit breathtaking.

• Adding a 16-year old increases average cost by almost 120%
• As is clearly indicated, insuring a teenage male costs significantly more than a teen female

The real savings lay in the amount of legwork you are willing to do. Shopping around can significantly improve your insurance cost outlook. Some people see thousands of dollars in savings by simply looking at different insurers.

Timing is Everything

Many guardians will ask when it is pertinent to add a teen to their policy. The answer? As soon as they intend to get behind the wheel of a vehicle! Contact your insurer for clarification, but most require they are included on the policy as soon as they receive a learner’s permit.

Remember, it is a rare instance where it would be beneficial to insure a teen individually. In the case that your 16-year old has acquired a ticket or been involved in an accident, you could consider an individual policy. Otherwise, adding them to your existing policy is best. 

As soon as you become aware that your teen will be driving, even on a learning permit, you should contact your insurer to begin the process of adding them to your policy. Your insurer might advise you to wait until the teen has a full license, but you must check to be on the safe side.

Few states require proof of insurance to obtain a driver’s license. After all, you may not even own a vehicle when you get your license! However, some states require proof that the owner of the vehicle is insured. Each state is unique in its requirements so do your research before heading to the licensing agency. 

Insurance that Makes Sense

Insurance, like most products, comes with an array of options to add on to simple policies. Do not get trapped into thinking you have to purchase everything your insurance company offers you. 

Liability is the most important asset your insurance should have. Liability insurance covers damages incurred in an accident – both to the vehicles and the people. Keep in mind the cost of medical bills that may accrue after an accident.

Anything your liability insurance does not cover becomes the sole responsibility of the person at fault (or their guardian). Paying up slightly at first might be wise given higher percentage of accidents amongst teenagers.

Purchasing other types of coverage, like comprehensive and collision, is at your discretion. Typically, these types of coverages are only required for leased or financed vehicles. If you own your car, the decision is yours.

Finding Discounts for 16-Year Old Drivers

While they are fewer and farther between than for older drivers, 16-year olds can get discounts from certain car insurance companies. Here are a few types of discount:

• Participating in driver’s ed. Most states require coursework before getting a learner’s permit or driver’s license, but in the states that do not, a discount might be offered for completing a course.
• Getting good grades. Many insurance companies provide incentive to study hard. Often an A or B average GPA will score your 16-year old a discount on insurance.
• Promise to drive responsibly. Some companies encourage teens to meet with their guardians and pledge to follow safe driving practices like keeping the music off or not texting while driving. A signed pledge could lead to a discount.

There are two other ways to get a “discount” rate on car insurance for 16-year olds: buying the right car and doing some extensive shopping.

If your teen will be driving their own vehicle, find one that insurance companies tend to offer lower rates for. A car with Electronic Stability Control is a must. This helps ensure your teen will have help controlling the car in adverse conditions on winding roadways. Get a car with lower horsepower to keep your teen from unwittingly driving too fast. Read up on safety reviews before purchasing a vehicle.

There is no getting around a spike in your insurance rates when you add your teen to the policy. Taking the time to explore your options can certainly help offset some of the impact. It never hurts to ask if there are any deals or discounts an insurance company can offer you. 

The good news is: as your teen gets older and hopefully practices safe driving habits, the cost of your insurance will go down. Stay in constant communication with the new drivers in your household, show them safe driving habits, and shop around for a great deal to make sure you don’t overpay. Following these steps can help lessen the blow of insuring your 16-year old driver.