Car insurance for a 16-year-old

How much is car insurance for a 16-year-old?

Newly licensed drivers are expensive to insure. They are inexperienced, naturally, and have a high rate of accidents. Auto insurance companies view that as risky. Hence, they charge new, teen drivers much higher rates.

The average car insurance rate for a 16-year-old who has his or her own policy is as follows, per year:

• State minimum coverage: $2,593
• Liability limits of 50/100/50: $2, 957
• Full coverage: $6,930

What you pay will vary, depending on your insurer, whether or not the teen is added to a parent's policy, the state you live in, the type of car you drive and coverage limits, among other factors. To give you an idea of what to expect to pay for coverage, we provide average annual rates by state in the charts below.

The rates for a separate teen policy are based on having the following coverage limits on a 2017 Honda Accord, along with any other state required coverages, and a deductible of $500:

• $100,000 for injury liability for one person
• $300,000 for all injuries in one accident
• $100,000 for property damage

For the cost to add a teen, CarInsurance.com compared rates in 10 zip codes in each state. The family profile we used owned a 2017 Honda Accord driven by a 45-year old man buying full coverage. Then we added a 16-year old teen to the policy. You'll see that adding a teen is much less expensive. That's because when teens get their own policy, they qualify for few discounts compared to their parents. Also, teens are commonly listed as a secondary driver on parents' policies. Though add a teen to parent policy is cheaper than the teen driving having a separate policy, the cost of adding a teen driver can be hundreds of dollars.

Car insurance for a 16-year-old female

Car insurance for a 16-year-old male

Cheap car insurance for a 16-year-old

Each state has

minimum car insurance requirements that you must have to drive legally. This level of coverage is typically the cheapest, but it also provides limited protection. In most states, buying just the required coverage means your insurance will pay for others’ injuries and car damage, but not for your own injuries or car repairs. You’ll see in the charts below how much minimum coverage costs, on average, per year in each state, for a teen buying his or her own policy.

Cheap car insurance for a 16-year-old girl

Cheap car insurance for a 16-year-old boy

*CarInsurance.com commissioned Quadrant Information Services to run auto insurance rates for a 2017 Honda Accord LX for 10 ZIP codes in each state using six large carriers -- Allstate, Farmers, GEICO, Nationwide, Progressive and State Farm. (In cases where one of the insurers doesn't return a rate, another major carrier in that state is substituted.)

Why are teen car insurance rates higher?

Car insurance companies base rates on risk. They take into account a person's driving experience, claims history, location, type of vehicle and other factors.

A driver with a risky (or a limited) driving record will pay more than a motorist who hasn't filed a claim in a decade.

Teen drivers are safer than young adults from two decades ago. There are fewer teen driver-related fatalities now than in the 1990s. That's especially true for younger teen drivers.

However, car crashes are still the number one killer of U.S. teens. They are also more likely to get into accidents than any other age group.

Plus, another sobering statistic from the 

National Highway Traffic Safety Administration (NHTSA) -- the number of fatal accidents involving young drivers increased to 2,082 in 2016, an increase from 1,886 teen-involved fatal accidents the previous year, which was a 9 percent increase over 2014. So, though teen drivers are less likely to get into a deadly crash than their parents decades ago, the trend is headed in the wrong direction again. This makes it even more important to make sure your teen is driving safely and not being distracted by the car radio, cell phone and friends.

Can a 16-year-old own and insure a car?

Penny Gusner, the consumer analyst for CarInsurance.com who is available to

answer your car insurance questions, says that in most states a 16-year-old can own a car and insure it -- but only if a parent or legal guardian co-signs for both the vehicle's title and insurance coverage. "Even if you're under the age of majority, which is 18 in most states, you can buy and insure a car," Gusner explains. "However, in general, minors cannot enter into a contract, so they cannot sign for auto insurance by themselves. Depending on state laws, a teen may not be able to buy a car either, since that is a sales contract, without an adult signing on as well." While most states consider 16 to be a legal age to own a car, there are exceptions. Gusner points out that a juvenile must be 17 in South Carolina to buy a vehicle, again with a parent or guardian signing on. She also notes that Ohio requires a parent to file a minor consent form with the state's bureau of motor vehicles if anyone under 18 wants title to a vehicle.

Adding a teen to parents’ policy is usually more affordable

When it comes to car insurance for young drivers, most parents take the easier, and far more common, approach of adding a teen to their policy. For one thing, it's likely to be cheaper.

Insurers base premiums on several factors, including the experience and driving record of the policyholder. A 16-year-old won't have that, which means higher rates.

Also, as Gusner points out, the teen won't be eligible for rate reductions the parent may qualify for, including multi-vehicle, multi-policy and loyalty discounts. Still, adding a 16-year-old driver to your policy means a significant hike in your rates.

Every situation is different, but to get an idea of what you can expect to pay, CarInsurance.com compared rates in 10 ZIP codes in each state. The family profile we used owned a 2017 Honda Accord driven by a 45-year old man buying full coverage. Then we added a 16-year old teen to the policy. Here's what happened:

• The average household's car insurance bill rose 118 percent to add a teen age 16.
• A teenage boy was more expensive. The average bill rose 129 percent, compared with 107 percent for teenage girls. 

You’ll see in the chart below how much it costs to add a teen driver to a parent policy and how much you save doing so compared to the teen having his or own policy:

Despite the high cost to insure a teen, comparing car insurance quotes will save you money. Each insurer uses its own method for calculating what you pay, so prices for the same policy can vary significantly. For example, when adding a 16-year-old girl to your policy in Sacramento, California ZIP 95829, you can save $4,706 by comparing rates. That’s the difference between the highest ($7,267) and the lowest ($2,559) rates among six insurers for the same neighborhood.

Insurance for teen drivers

So, when do you add a teen to your policy? Start the process when he or she has a learner's permit.

"Begin when your child is first permitted to practice driving by contacting your insurer to see if you need to add the teen now or when fully licensed," she says.

Gusner adds that the only time it might be wise to get teens a separate policy is when they've had moving violations or accidents, which would hike premiums on the family coverage. Instead, think about getting a teen an older car, which is cheaper to insure, and buying a separate policy with only high liability protection.

Do you need insurance to drive with a learner's permit?

A novice driver needs insurance, but not under his or own policy. Usually, the policy of the vehicle's owner (typically the parent or guardian who accompanies the teen while he or she learns) should be enough. But parents need to immediately add their teen drivers to their policies once the teens are licensed.

Most insurers will wait until the teen is licensed to make you add him, but do check beforehand because some will make you add the child at that point (when he has a permit) and start paying for him as a driver, Gusner says.

Do you need insurance to get a license?

If you're driving, most states require you have minimum liability insurance. But a 16-year-old hoping to get his first license only has to show that his vehicle's owner already has coverage.

A teen driver faces driving restrictions before and after receiving a driver's license. States have varying levels of 

Graduated Driving License (GDL) laws.

Common 

GDL laws include:

• Learners' permit
• Minimum number of supervised driving
• Limited unsupervised driving, such as at night
• Cell phone/texting ban
• Passenger restrictions

Some states have stronger GDL laws. For instance, New Jersey is the only state the requires a novice driver decal for drivers under 21, who don't have full-privilege licenses yet.

Safe-driving advocates, such as the Governor's Highway Safety Association, say strong GDL laws save lives.

What's the best insurance for teenage drivers?

When insuring your 16-year-old, Gusner says first focus on liability protection. That pays for damages your teen may cause to property or people in an accident. And don't think that state-minimum coverage is enough. Medical costs can quickly escalate if there are major physical injuries. Bills can also go sky-high with property damages.

Just imagine the costs if the accident involves an expensive vehicle or other significant property. You'd have to pay out-of-pocket once those costs exceeded your liability limits.

Besides raising your basic liability amount, consider purchasing an umbrella policy, which increases liability protection after those basic limits are met. An umbrella with $1 million or more of protection may be a smart move.

Comprehensive and collision coverage is required if you finance your vehicle. However, you decide whether to have those optional protections if the car is already paid off. If you opt for comprehensive and collision, consider higher deductibles to lower your rate. Of course, you'd then have to pay for minor repairs following an accident.

Car insurance discounts for 16-year-olds

Despite the high rates you pay for young drivers, there are ways to trim costs. 

Car insurance discounts for teen drivers vary by state and insurer, but may include:

• Driver education: Completion of a driver education course, if not required under state law as part of the licensing process, may provide a 5 percent discount.
• Good student: Drivers who maintain a 3.0 or "B" average may get a discount of up to 15 percent.
• Parent-teen driving contract: Teens who sign a contract with their parents that outlines rules to follow when driving -- for instance limited hours and numbers of passengers -- may get up to a 5 percent discount.

What are the best cars for a 16-year-old?

There are many things to consider, with safety the most important. The Insurance Institute for Highway Safety (IIHS) some basic principles when buying a car for a teen:

• Try to get Electronic Stability Control (ESC). This feature, which helps a driver maintain control on curves and slippery roads, is about as good at reducing risks as safety belts, says the IIHS
• Avoid very high horsepower. "Vehicles with more powerful engines can tempt (young drivers) to test the limits," says the IIHS.
• Look for cars with the best safety reviews from the IIHS and National Highway Traffic Safety Administration.

CarInsurance.com offers its own buying suggestions, including a detailed list of the 

cheapest cars to insure for teen drivers, which are models under $15,000 with good safety ratings.

Shopping around can offset the costs of adding a teen

Adding a teen to your auto insurance policy will make your premiums skyrocket. Your teen might be the best driver around, but until he or she proves that with years of accident-free driving, you can expect to pay more for insurance.

However, there are ways to lessen the pain. One key is to shop around to find the best auto insurance rates.

There's a bit of good news. If your teen drives accident-free, you can expect your insurance premiums will decrease over the years. Rates will likely fall as the teen gains more experience. Average car insurance rates by age decline when drivers hit age 26 significantly.

Check out the other teen driver pages on CarInsurance.com: Being the parent of a teen driver is stressful and expensive. However, making sure you are providing model driving behavior, assuring your children are following GDL laws and shopping for car insurance will give your teen a better chance to drive safely and for you paying the least on car insurance possible.