Guide to the Best Car Insurance for Teens

Published by 
Jess Miller
Last updated: 
August 24, 2019
Insurance agent working on car accident claim process

While car insurance for teens isn't cheap, finding the best coverage and teen driver discounts available can help parents and teens select a policy with lower premiums and reduced annual rates.

Car insurance rates vary considerably, and this variation is the result of several determining factors.

Teen drivers can expect to pay as much two hundred percent more than non-teen drivers on the road–depending on location, gender, and experience level.

We've done the dirty work to simplify your search for the best insurance policy for your teen driver by ranking industry leaders on teen driver discounts, coverage, family pricing plans, and other factors specific to new drivers.

Check out our list of the best car insurance for teens, including:

  • Policies with accident forgiveness
  • Policies with accident forgiveness
  • Away at school discounts for college students
  • Policies with GAP insurance and mechanical breakdown coverage
  • Companies that reward teens with incentives for safe driving behaviors (including cash and prizes).

Read onto discover the best car insurance for teen drivers.

Frequently Asked Questions

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1. Why are Insurance Coverage Rates So Much Higher For Teen Drivers?

Insurance rates vary considerably, and policies for teen drivers may cost as much as two hundred percent more than plans for middle-aged drivers.

In addition to these higher rates, teen male drives face even higher premiums. The annual insurance rates teen drivers face are a result of age and experience.

Statistics show that drivers between the ages of sixteen and nineteen are more than three times as likely to cause a crash than non-teen drivers, with teen male drivers most frequently at the wheel. Insurance rates for young adults typically began to decline around age twenty-five.

2. Do Teen Driver​​​​s With a Learner's Permit Need Insurance Coverage?

In most states, teen drivers who have earned a learner's permit do not require insurance coverage. Once teens are licensed drivers, insurance coverage is necessary for all states before getting behind the wheel.

3. When Should Parents Add a Teen Driver to Their Existing Policy?

Teens should be added to an existing policy or purchase their own once they are licensed drivers.

4. Should Teen Drivers be Placed on Parents' Insurance Plan or Purchase Their Own Coverage?

Blonde teen driving her convertible

Generally speaking, costs are significantly reduced when parents choose to add teens to their parents' existing car insurance policy.

Various factors including available discounts for students and teens considerably affect rates, and certain teens may qualify for less expensive policies of their own.

Consult with your insurance agent regarding teen discounts including lower rates for safe driving, good grades, and low mileage. Since many companies offer multi-car discounts, adding a teen driver to your existing policy may save parents and teens significantly.

5. What Types of Discounts are Available for Teen Drivers?

Teen drivers and college students under age 25 are eligible for numerous discounts that vary by lender, including safe driver discounts, reduced rates for earning good grades, low mileage, and students away at college.

In addition to discounts and reduce rates, some companies reward teens with prize-winning competitions that encourage safe driving behavior and offer further discounts for attending additional driver's education courses.

6. What Can Teens Do to Reduce Auto Insurance Rates and Quotes?

While teens face the highest annual rates among all drivers, there are several cost-saving tips that teens may take advantage of to reduce their yearly rates, including:

  • Driving an older vehicle
  • Getting on a parent's existing policy
  • Earning top grades
  • Taking additional drivers education and training courses
  • Opting for vehicles with top-rated safety features

How We Chose Our Ratings

Young woman buying car

Accuracy is essential to us, that's why the companies featured on our Best Of guides earn a spot on our list through a rigorous research process.

The companies featured on our Best Of guides are sourced only from top rated choices in their respective categories, put to the test by our team of consumer specialists, then reviewed by a panel of experts before earning a spot on our list.

Price Range for Teen Driver Insurance Rates

Annual insurance rates for teen drives vary considerably and range between $3000-$6000, depending on several factors.

In most circumstances, costs are drastically reduced when parents opt to add teen drivers to their existing insurance policy. Insurance rates vary by state, gender, vehicle make and model, and experience.

Teen drivers face higher insurance rates as a result of their age and experience level. Parents and teens can expect to pay higher rates for male teen drivers, as statistics show that teen female drivers cause fewer accidents and display safer driving behaviors.

Comparison Data

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Image source: freepik

Accident Forgiveness: Geico, American Family Insurance, Erie Insurance, Allstate, Grange Insurance Association, USAA, Nationwide.

Safe Driver Discounts: Erie Insurance, Grange Insurance Association, Geico, Allstate, Nationwide, USAA, American Family Insurance, Progressive.

Teen Driver Discounts: Erie Insurance, Grange Insurance Association, Geico, Allstate, Nationwide, USAA, American Family Insurance, Progressive.

GAP Insurance: Progressive, Geico, Allstate, American Family Insurance, Erie Insurance, Nationwide.

Vehicle Monitoring Programs: Erie Insurance, Grange Insurance Association, Allstate, Nationwide, USAA, American Family Insurance, Progressive.

Insurance: Lowest Rates for Teen Drivers

Erie Insurance offers the most discounts along with the lowest rates for teen drivers overall, but coverage with Erie Insurance is regional.

Erie Insurance offers reduced premiums to teens and college students for living at home, completing a driver's education course, and the company holds competitions that reward safe drivers with discounts and prizes.

Erie Insurance policies are available in twelve states spanning the Northeast and Midwest. Teens and parents may visit Erie Insurance online or speak with an agent for more information regarding coverage in the Northeast and Midwest regions of the country.

Pros & Cons: Erie Insurance offers the lowest rates to teen drivers when compared with national insurance companies, along with several discounts for teens and college students.

While Erie Insurance offers the lowest rates to teens overall, the company's policies are available in select states only.

Where to Buy: Erie offers free quotes through the company's website. Drivers may speak with a local agent by phone or live chat for more information.

Accident Forgiveness: Eerie offers accident forgiveness to accident-free policyholders of at least three years.

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Grange Insurance Association: Lowest Rates for Teen Drivers on the West Coast

Grange Insurance Association offers the lowest monthly rates to teen drivers across several states spanning the west coast.

Residents of California may save as much as seventy-five percent on policies for teen drivers with Grange. The company offers insurance policies in California, Oregon, Wyoming, Washington, Idaho, and Colorado.

Pros & Cons: Grange Insurance Association offers rates that can save teen drivers as much as seventy-five percent when compared with nationwide lenders.

Grange Insurance Association policies are available in select states spanning the west coast.

Where to Buy: Drivers may obtain a free quote online through the company's website, or speak with a local Grange Insurance Associate agent by phone or live chat.

Accident Forgiveness: No

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Geico

Geico is a nationwide direct insurer that ranks among the highest in customer satisfaction and discounts for teen drivers.

Among the savings for teen drivers offered by Geico include good student discounts, reduced rates for wearing a seatbelt, and discounts for teen drivers who have attended driver's education programs.

Geico offers all drivers accident forgiveness coverage, an optional feature that prevents teens (and adult's) insurance rates from skyrocketing after their first at-fault accident. Along with accident forgiveness, Geico is the only insurer on our list to offer mechanical breakdown coverage.

Mechanical breakdown insurance covers the cost of vehicle repairs as a result of normal wear and tear. Mechanical breakdown coverage is an extremely valuable feature for teen drivers who are insuring an older vehicle.

For teens who would like to purchase their own policy, Geico offers a Family Plan Pricing that allows teens to select their own plan at reduced rates.

Pros & Cons: Geico is known industry-wide for offering the lowest rates to all drivers, and teen drivers are no exception.

Geico also offers an extensive range of teen and student discounts, including discounts for safe driving and installing anti-theft devices. Geico's Family Pricing Plan and numerous discounts place it ahead of competitors for teen drivers.

Parents in search of a policy with a vehicle monitoring program should opt for an alternative, as Geico is the only company on our list that doesn't offer programs to track and monitor safe driving habits.

As a direct online insurance lender, Geico doesn't offer local agents to assist customers, but support is available through friendly live chat agents.

Where to Buy: Geico is a direct insurer, meaning that policies are sold online without the middle man.

Geico offers assistance from registered insurance agents by phone and ranks number one in customer service.

Accident Forgiveness: Yes

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Nationwide

Like Geico, Nationwide Insurance offers student discounts and a family pricing plan that can help lower rates for teen drivers.

Nationwide also offers accident forgiveness for teen drivers. Parents insured through Nationwide with a history of safe driving may add teen drivers to their existing policy with accident-free discounts and the SmartRide Program for safe drivers.

The SmartRide program offers lower rates to teen drivers who install a video monitoring device in their vehicle for one year.

Teens with safe driving behaviors may qualify for a lower premium. In addition to safe driver and student discounts, Nationwide offers twenty-four-hour roadside assistance, seven days a week.

Teen drivers may qualify for several discounts through their parents existing policy with Nationwide's Family Plans, including safe driver discounts.

Pros & Cons: Nationwide offers accident forgiveness along with a Family Pricing Plan that may qualify teen drivers for several discounts available through their parents existing policy.

While Nationwide offers a reduced rate for good students, the company does not provide an extensive range of other teen driver programs, like low mileage or away at school discounts.

Nationwide also scores slightly lower than Geico in overall customer satisfaction.

Where to Buy: Nationwide offers direct policies and quotes online.

Customer assistance is available with licensed insurance agents by phone or live chat.

Accident Forgiveness: Yes

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American Family Insurance

American Family Insurance offers teen specific discounts and lower premiums, including a Teen Safe Driver Program.

Teens may also save as much as ten percent on monthly premiums by logging 3,000 miles in driver's education hours.

Pros & Cons: American Family Insurance offers a Teen Safe Driver Program that monitors teens' driving with a discreet camera placed inside of the vehicle.

Through the app, an instructor provides teens with tips to improve their driving habits and increase safety. American Family Insurance offers limited coverage nationwide and is available in select states only.

Where to Buy: An American Family Insurance policy may be purchased by speaking with a local agent through live chat or by phone.

Free quotes are available on the company's website.

Accident Forgiveness: Yes

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Progressive

Progressive offers multi-car discounts that may reduce rates for teen drivers significantly when added to a parent's existing policy.

Among teens whose parents choose not to add to their existing policy, Progressive ranks highly in insuring teen drivers who opt to purchase their own insurance coverage.

Progressive's website features a comparison tool to help teen drivers explore rates, policies, and quotes. To reward safe drivers, Progressive offers a vehicle monitoring program that tracks safe driving behaviors called Snapshot.

Although Progressive doesn't offer accident forgiveness, the lender does offer GAP insurance–optional coverage that helps pay the difference between the amount owed on the teen's insurance policy and the vehicle's total value.

Pros & Cons: Progressive ranks high in consumer satisfaction among teen drivers who purchase their own policy, and offers multi-car discounts to teens added to Family Plans.

Although Progressive doesn't offer accident forgiveness, the company does offer GAP insurance to help cover the cost of vehicle repairs for vehicles totaled during an accident.

Where to Buy: Progressive policies are available online or by phone.

The company's website ranks top in user satisfaction, offering a multifunction comparison tool and live chat with a virtual Progressive agent.

Accident Forgiveness: No

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State Farm

State Farm offers deep discounts for teen drivers and college students under the age of twenty-five, including a deduction for earning exceptional grades that may save young drivers as much as twenty-five percent on their policy.

State Farm is often preferred among drivers who reside outside of major metropolitan areas and cities, as the company offers lower rates for drivers in small communities and rural areas.

Pros & Cons: State Farm is the largest insurer in the United States.

The company offers an array of impressive discounts for teen drivers and college students under the age of twenty-five.

While safe driver programs are available through State Farm Insurance, coverage and availability vary by region.

Where to Buy: State Farm offers free online quotes on the company's website.

Local agents are available to assist customers by phone or live chat.

Accident Forgiveness: Varies

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Allstate

Allstate offers various ways for teen drivers to save on their car insurance policy, including discounts for exemplary students, safe driving, and savings for installing a vehicle monitoring app.

For teen drivers and college students who purchase their own coverage instead of being added to a parent's existing policy, Allstate offers numerous ways to save.

Students under the age of twenty-five who only drive their vehicle part of the year may qualify for significant discounts with Allstate's away at college plans.

For teen drivers with low mileage and students away at school, Allstate is the ideal choice, as the company offers several ways for teens and college students to lower their rates and premiums.

Allstate offers various discounts to college students who might otherwise cancel their policy, including reduced rates for students who drive their vehicle only part of the year.

Pros & Cons: Allstate offers several discounts for teens and college students under the age of twenty-five.

Allstate's local agents are available to help parents and teen drivers get the lowest rates possible by ensuring that each customer receives information regarding every discount for which they may qualify.

While Allstate does offer incredibly helpful local agents to guide parents and teens through the insurance coverage process, the company's website and online services are lackluster in comparison to Geico and Progressive.

Where to Buy: Allstate policies can be purchased by phone with the help of a local agent.

Customers may visit the company's website or contact an agent through Allstate's customer service line for more information.

Accident Forgiveness: Yes

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USAA

USAA offers the lowest rates for teens and young adults enlisted in the military with various discounts.

USAA specializes in military life and families, ranking number one in customer service according to J.D. Power and Associates. Discounts for newly enlisted teens and young adults are available through the company, along with lower annual rates.

Pros & Cons: USAA offers benefits to military enlisted members as well as their families.

USAA rates are often among the lowest industry-wide.

The company's website is expansive, featuring a comprehensive advice center, comparison tools, and calculators to help customers simplify their existing policies.

USAA is only available to enlisted military members and their families. While the company offers an impressive array of online services, USAA has no physical locations, meaning that all transactions take place virtually.

Where to Buy: Drivers can purchase a USAA policy directly through the company's website by speaking with a live agent, or by phone through USAA's customer service line.

Accident Forgiveness: USAA offers accident forgiveness to policyholders with five years of accident-free membership.

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Final Verdict: The Best Policy for Teen Drivers

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So, what's the final verdict on the best car insurance for teens drivers?

As you can imagine, the choice wasn't easy. We've selected our top pick based on numerous rating criteria, including customer satisfaction, teen/student discounts, coverage, and pricing plans.

Our Top Pick for Best Car Insurance for Teen Drivers: Geico

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Image source: geico

Geico takes our number one spot for the best insurance company for teen drivers overall.

Why We Chose Geico

While close competitors like Erie Insurance and Grange Insurance Association may offer lower rates, Geico consistently quotes the lowest prices for teen drivers among insurance companies that offer policies in all fifty states.

Teen and Students Discounts

Geico offers an extensive range of discounts for teens and college students, a key ranking factor in our selection process.

Geico offers young drivers discounts for safety and security, including reduced rates for wearing a seatbelt and installing an antitheft device.

Geico also rewards teens for safe driving habits and offers lower rates for teens who drive vehicles equipped with airbags and other safety features.

Coverage (Including Accident Forgiveness and GAP Insurance)

Geico is among several companies on our list to offer GAP insurance–a valuable asset for teen drivers.

GAP insurance, or Guaranteed Asset Protection, saves teen drivers from the repair costs of totaling a vehicle by paying the difference between the vehicle's total value and the current amount owed on the driver's insurance loan.

In addition to GAP insurance, Geico offers mechanical breakdown coverage to cover repair costs resulting from normal wear and tear, an extremely beneficial feature for teens driving older vehicles.

Family Pricing Plan

Geico's Family Pricing Plan lets teen drivers who were previously covered under their parent's policy purchase their own insurance at a reduced rate, generally offering teens rates far lower than leading competitors.

Direct Online Lender

Geico is a direct lender that allows teens and parents to purchase a policy entirely online.

Geico's paperless virtual platform allows for complete account management online, a feature that teen and millennial drivers prefer to services that require communication by phone or in person.

Ultimately, the choice for the best car insurance is up to parents and teens, and every parent should utilize online comparison tools to research the best policy for their new driver.

When searching for the best policy, it's important to keep in mind that insurance rates for teen drivers vary considerably by state, and regional insurers may offer the lowest rates.

Teen drivers residing in Northeast and Midwestern states may qualify for low rates with local companies like Erie Insurance, while teen drivers on the west coast may find the lowest prices with Grange Insurance Association.

We recommend Geico for their award-winning customer service, low rates, teen driver advantages, and extensive coverage.

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