Car Insurance for 16-Year-Olds: How Much Does It Cost?
In most states, 16 is the earliest age to get a driver’s license.
But, car insurance for 16-year-olds is notoriously expensive.
(And, yes, drivers with learner's permits do need car insurance coverage.)
There are a number of reasons why that is, and there is at least some ability to reduce that cost.
Average Cost of Car Insurance for 16-Year-Olds
The national averages are as follows:
- Males: $7,483
- Females: $6,562
- The average premium for both males and females: $6,930
As you can see, the 16-year-old male will pay an average of $921 more per year for the same coverage as a 16-year-old female.
(The numbers quoted below reflect “full coverage”, at $100,000 coverage for injury liability for one person, $300,000 for all injuries in one accident, and $100,000 for property damage. This is referred to as “100/300/100” coverage.)
You may pay more for less for car insurance depending on factors including:
- Your state of residence
- Your specific ZIP Code (rates can vary dramatically within the same state)
- Type, age and style of vehicle you drive, as well as any safety equipment included
- The amount of coverage you need, including collision and comprehensive coverage
- The insurance company you obtain coverage from
- Any discounts you may qualify for
The specifics of your driver profile related to any of the above can result in a car insurance premium that’s either higher or lower than the national average.
In addition, one of the most significant factors affecting your car insurance premium as a young driver is your gender.
Since young males have a documented history of high-risk driving, as demonstrated by more moving violations and at-fault accidents than young females, males will pay more for their premiums.
Most Expensive Car Insurance Rates for 16-Year-Old Males
| State | Teen policy | Parents' policy with teen added |
|---|---|---|
| Michigan | $14,691 | $5,919 |
| Louisiana | $12,702 | $6,044 |
| Rhode Island | $11,774 | $5,388 |
| Connecticut | $11,471 | $5,611 |
| Kentucky | $10,711 | $3,775 |
| Nevada | $9,996 | $4,903 |
| Florida | $9,456 | $5,452 |
| DC | $9,383 | $3,816 |
| Delaware | $9,165 | $3,570 |
| Tennessee | $9,068 | $3,287 |
Most Expensive Car Insurance Rates for 16-Year-Old Females
| State | Teen policy | Parents' policy with teen added |
|---|---|---|
| Michigan | $14,533 | $5,846 |
| Louisiana | $10,893 | $5,484 |
| Rhode Island | $10,023 | $4,603 |
| Connecticut | $9,917 | $4,933 |
| Kentucky | $9,528 | $3,459 |
| Nevada | $8,908 | $4,353 |
| Florida | $8,202 | $4,855 |
| Tennessee | $7,998 | $2,973 |
| Delaware | $7,875 | $3,190 |
| DC | $7,770 | $3,310 |
Factors Affecting Car Insurance Rates for Teen Drivers
The insurance premiums listed above are national averages, for full car insurance coverage.
But there are variables within those averages that can result in car insurance premiums that are either higher or lower.
State of residence
There are wide variations in car insurance premiums for 16-year-olds from one state to another.
For example, for a 16-year-old female, the premium can range from a low of $1,547 per year in Hawaii, to a high of $14,533 in Michigan.
For a 16-year-old male, the premium can range from a low of $1,547 in Hawaii, to a high of $14,691 in Michigan.
But once again, rates can even vary from one ZIP Code to another within the same state.
As a general rule:
Urban areas – because of their high concentration of vehicles – tend to have much higher premiums than rural areas.
Type of vehicles covered
The most basic vehicles are generally the least expensive to insure.
At the opposite end of the spectrum, sports cars, luxury vehicles, and pickup trucks carry higher premiums.
The safety equipment included in a vehicle is also a factor.
Equipment like anti-lock brakes, side door airbags, automatic seatbelts, and electronic stability control are examples of safety features that can fetch lower premiums.
Older vehicles are typically less expensive to cover, because you may not need collision and comprehensive coverage. This can reduce the cost of the premium by hundreds or even thousands of dollars.
Coverage amount
The quotes provided in the previous section are based on full coverage at “100/300/100”. That’s generally the highest level of coverage available on a standard policy.
But if you reduce the coverage to $50,000 for injury liability for one person, $100,000 for all injuries in one accident, and $50,000 for property damage – commonly displayed as 50/100/50 – the national average car insurance premium for 16-year-olds falls to $2,957 per year. That’s less than half the premium for 100/300/100 liability coverage.
Most states, however, have even lower legal coverage limits.
For example, the minimum in your state may be 25/50/25, though this varies with each of the 50 states.
But based on the national average of state-mandated minimum coverage levels, the average national premium for car insurance policies for 16-year-olds falls to $2,593.
The insurance company you obtain coverage from
Just as there are wide differences in car insurance premiums between states, there are also wide variations between insurance companies.
For example, while Progressive has an average annual premium of $1,430 for a 16-year-old male added to a parent policy, Allstate charges $5,005 for the same coverage.
The situation is similar with a 16-year-old girl added to a parent policy. The average annual premium for a policy from Progressive is $989 per year, while State Farm charges $3,022 for the same coverage.
That said:
It’s important to understand that these averages are based on national figures.
Exactly which companies will have the lowest premiums will depend on your state of residence.
A company that’s the lowest-cost and one state may not be the least expensive in another. You’ll need to shop to make sure you’re able to identify the lowest-cost provider.
Available discounts
Virtually every insurance company offers discounts for car insurance.
The number of discounts, the specific type, and the percentage dollar reduction will vary between companies.
For example, part of the reason why Progressive is the lowest-cost car insurance provider nationally is because of the many discounts they offer.
Examples of different types of discounts often available (along with the average savings to expect):
- Multiple cars on the same policy: 12%
- Teen driver discount: varies
- Good student discount: varies
- Online quote: 7%
- Sign your documents online: 9%
They also offer discounts for paperless documents, paying your premium in-full, setting up automatic payments, and the Progressive Snapshot safe driver discount, that results in an average savings of $145.
If you’re purchasing car insurance for your 16-year-old, you should inquire about any discounts that may be available.
Why it’s so much more expensive for 16-year old drivers
Car insurance for 16-year-olds is so expensive because of the risks these drivers present to car insurance companies.
Those risks translate into higher costs to pay claims, which translates into higher premiums.
It’s unfortunate that an otherwise responsible 16-year-old will be charged a higher premium based on risk factors he or she may never display.
But in the absence of any evidence to the contrary, insurance companies must base premiums on the risk factors associated with the entire age group.
Those risk factors include the following:
- A lack of established driving history
- Little or no driving experience
- Undeveloped driver instincts, the kind that keep more experienced drivers out of hazardous situations
- A greater likelihood to be distracted by events inside and outside the vehicle
- Greater likelihood of hazardous driving, based on the track record of the entire age group
Graduated (Partial) Licenses
Laws that apply to 16-year-old drivers vary by state.
But one of the most common is what can be thought of as a graduated license process.
That’s where a 16-year-old will be issued a restricted license, that will gradually be upgraded to an unrestricted, or full license, at a later age.
Check the laws in your state, with the full understanding that any violation can result in either a much higher car insurance premium, or even license suspension.
Examples:
Arizona
In Arizona, 16-year-old drivers receive an intermediate license, after which they are unable to drive between the hours of midnight and 5:00 AM.
They also can’t have more than one unrelated passenger under the age of 18, unless they are also transporting a license parent or legal guardian.
An unrestricted license is available upon attaining age 18.
California
In California, 16-year-olds may not drive between the hours of 11:00 PM and 5:00 AM, nor transport passengers under age 20, unless supervised by a licensed driver, 25 or older.
An unrestricted license is available at 17.
New York
In New York, the minimum age for a restricted license is 16 ½. You’ll be unable to drive with any more than one passenger under the age of 21, except family members.
There are also specific regulations that apply depending on where in the state you live.
An unrestricted license is available by age 18, or at 17, after completing a state-certified driver education course.
How to Save on Car Insurance for 16-Year-Olds
You can lower the cost of car insurance for 16-year-olds by:
- maintaining lower levels of coverage
- having a vehicle that’s less expensive to insure
- making an application with the lowest-cost insurance company in your area
- taking advantage of every discount they offer
But there’s an even bigger way to save on car insurance for 16-year-olds that will easily outweigh all those efforts combined.
That involves adding the teen to a parent's existing car insurance policy.
Adding a teen driver to an existing policy
The premium on the parent’s policy will still increase, but it will be much lower than the cost of carrying a parent policy and a standalone teen policy.
You may even be able to get more discounts by adding an additional driver and another vehicle to the policy.
Regardless:
The savings are substantial.
Average savings by adding 16-year-old to parent's car insurance policy
| Gender | Teen stand-alone policy | Parent's policy with teen added | Average savings |
|---|---|---|---|
| Female | $6,562 | $3,086 | $3,476 |
| Male | $7,483 | $3,428 | $4,055 |
Average auto insurance premium with 16-year-old male added
| Insurer | Parent policy with 16-year-old male added |
|---|---|
| Progressive | $1,430 |
| Farmers | $1,944 |
| Geico | $2,282 |
| Nationwide | $2,383 |
| 21st Century Centennial | $2,450 |
| Mountain Laurel | $2,749 |
| Allied | $2,754 |
| Mid-Century | $3,066 |
| State Farm | $3,758 |
| Allstate | $5,005 |
| Victoria | $6,174 |
Average auto insurance premium with 16-year-old female added
| Insurer | Parent policy with 16-year-old female added |
|---|---|
| Progressive | $989 |
| United Financial | $1,204 |
| Farmers | $1,932 |
| Geico | $2,089 |
| 21st Century Centennial | $2,209 |
| Allied | $2,306 |
| Nationwide | $2,383 |
| Mountain Laurel | $2,431 |
| Mid-Century Ins Co | $2,909 |
| State Farm | $3,022 |
| 21st Century Centennial | $4,268 |
The savings will be even greater if the teen is added to the parent’s policy using only the state’s mandated minimum car insurance coverage amounts.
However, that may not be possible if the parent’s need to maintain full coverage, since the car insurance company will be unlikely to have separate liability limits within the same policy.
Adding the teen to the parent’s policy is the option most parents choose, since the cost of taking a separate policy on a teenager will be completely unaffordable for the average household.
Bottom Line
Unfortunately, car insurance for teenagers of any age is highly cost-prohibitive.
Any effort necessary should be taken to minimize the cost, given that car insurance premiums can be higher than the value of the vehicle the teen will be driving.
The good news:
It is a temporary situation.
With each year that passes, the premium will drop, and continue to do so until the teen reaches 25.
At that point, you’ll no longer be considered a high-risk driver, and you’ll be fully eligible for the lowest premiums available.
