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Published: May 12, 2022Last updated: October 18, 2022

Cost of Auto Insurance for 16-Year-Olds

16-year-olds pay an average of $4,368 a year for auto insurance.

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Getting your license when you’re 16 is an exciting time. However, a lot of that excitement goes down the drain as your parents start to price out car insurance rates. Because they lack experience, 16-year-olds incur the costliest insurance rates and are considered the highest-risk age group by insurance companies.

Cost of Auto Insurance for 16-Year-Olds

If you are looking for insurance for a 16-year-old, it might shock you to learn that the average cost of an annual policy is $4,368. Premiums do vary based on location, carrier, and whether or not there are any tickets or accidents on the driving record.

Premium by Coverage Level

Coverage Average annual premium
Full $6,613
Liability only $2,733

Premium by State

State Average annual rate for full coverage Average annual rate for minimum coverage
Alabama $7,286 $2,821
Alaska $5,434 $1,738
Arizona $6,362 $3,259
Arkansas $10,416 $4,150
California $6,184 $2,147
Colorado $7,689 $2,640
Connecticut $10,177 $5,023
Delaware $8,447 $4,503
Florida $8,600 $2,310
Georgia $7,703 $3,502
Hawaii $1,079 $352
Idaho $4,146 $1,654
Illinois $6,131 $2,585
Indiana $4,669 $1,837
Iowa $3,937 $1,192
Kansas $5,342 $1,894
Kentucky $10,596 $4,662
Louisiana $13,409 $5,447
Maine $4,242 $1,799
Maryland $7,451 $3,456
Massachusetts $4,979 $2,020
Michigan $10,423 $5,234
Minnesota $4,315 $1,954
Mississippi $6,657 $2,469
Missouri $8,194 $3,090
Montana $6,988 $2,071
Nebraska $4,728 $1,626
Nevada $9,150 $4,823
New Hampshire $5,232 $2,115
New Jersey $9,561 $3,997
New Mexico $5,773 $2,054
New York $7,904 $4,189
North Carolina $3,173 $1,332
North Dakota $4,819 $1,657
Ohio $4,059 $1,759
Oklahoma $6,973 $2,285
Oregon $5,675 $2,885
Pennsylvania $5,499 $1,988
Rhode Island $11,948 $6,407
South Carolina $6,399 $2,955
South Dakota $4,952 $1,335
Tennessee $5,350 $1,982
Texas $10,210 $4,016
Utah $6,690 $3,097
Vermont $4,765 $1,480
Virginia $5,961 $2,540
Washington $5,113 $2,249
Washington, D.C. $7,242 $3,459
West Virginia $6,034 $2,199
Wisconsin $4,719 $1,765
Wyoming $4,492 $1,379

Premium by Company

Company Average annual premium
Erie $3,732
Farmers $4,980
USAA $5,076
GEICO $5,748
Nationwide $6,468
State Farm $6,924
Progressive $9,264
Allstate $13,692

Cost of Car Insurance for 16-Year-Olds Compared to Other Ages

Age 16 is the starting point for insurance because it’s the starting age for drivers to receive their unrestricted licenses. Compared to other ages, 16-year-old drivers, and drivers under 25 in general, face the most expensive rates for car insurance.

Rates start to subside once you reach age 20 and continue to decrease over time, as long as you maintain a clean driving record with no at-fault accidents or tickets.

Age Average annual premium
16 $4,368
17 $3,925
18 $3,983
19 $2,758
20 $2,931
25 $1,728
30 $1,716
35 $1,449
40 $1,710
50 $1,489
60 $1,425

How Do Rates Differ Between 16-Year-Old Male and Female Drivers?

Men pay more than women for auto insurance in most states. This difference is because men are more likely than women to be in significant accidents. On average, men can expect to pay 10 percent more in premiums.

Charging a different rate based on sex is price discrimination. Every state allows price discrimination except these ones:

  • California
  • Hawaii
  • Massachusetts
  • Michigan
  • Montana
  • North Carolina
  • Pennsylvania1

There’s no doubt that teens are expensive to insure, but gender is one of many other factors, including address, type of vehicle, and more, that influences the cost of car insurance.

Why Is Car Insurance So Expensive for 16-Year-Olds?

As new drivers, 16-year-olds don’t have driving experience and may also have irresponsible driving habits, such as speeding or cutting people off. These habits are not exclusive to 16-year-olds, but data shows they are more likely to get into an accident and have a bad driving record.

The National Security Council (NSC) says that teens were involved in 9 percent of all car crashes in 2020. That’s 1.77 million teens getting into accidents, when there are just over 8 million teen drivers.2 The Centers for Disease Control and Prevention (CDC) found that teen drivers are three times more likely to get into a fatal crash than other drivers.3

The rates reflect the higher risk that teen drivers pose. Each insurance company keeps its own data on accident and ticket incident rates among its drivers. 16-year-olds have the highest accident rates and thus, incur the highest premiums.

Do I Have to Add My Teenager to My Car Insurance?

When your teenager gets their license, they will need insurance to drive a car. If your teen driver is driving your car, you must add them to the family’s policy. Adding a teen driver to your car insurance means that your rates will increase.

If your teen driver has their own car, you can have them get their own policy instead. Based on our research, 85 percent of parents add their teen drivers to their insurance policies.

However, adding a teenager to your policy can be the cheapest way to go. When you add your teen to your policy, rates drop as much as 45 percent compared to a teen who has their own policy. For example, putting a teen on a family policy might cost $2,947 annually, while a teen with their own policy might cost $5,352.

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If your teen got their license but won’t be driving the household cars, think about excluding them on the household policy to prevent a rate hike. However, you won’t be able to let them drive the household car this way, because they won’t be covered in case of an accident.

Cheapest Car Insurance Companies for 16-Year-Olds

We ran quotes among the top insurance carriers that insure 16-year-olds. The cheapest carrier was Erie, but keep in mind that this carrier is regional and only available in 13 states. Farmers is the cheapest national carrier. We recommend shopping around, since your location may affect your rates significantly and carriers tend to be better-priced in some states than others.

Auto insurance company Average annual cost of car insurance for 16-year-olds
Erie $3,732
Farmers $4,980
USAA $5,076
GEICO $5,748
Nationwide $6,468
State Farm $6,924
Progressive $9,264
Allstate $13,692

How to Save on the Cost of Auto Insurance for 16-Year-Olds

  1. Add your teen to the family policy. You can save up to 45 percent on premiums by not getting a separate policy for your teen driver.
  2. Ask for a good-student discount. Most carriers offer a good-student discount for students with a B average or better. This discount can be up to 25 percent.
  3. Ask about low-mileage driving. Cars driven under 7,500 miles per year qualify for a reduced rate. Ask your insurance agent if you could get a better rate with usage-based insurance, otherwise known as pay-per-mile insurance.
  4. Ask about other discounts. You may get a discount if your teen signs up for a driving tracker, takes a driving class, or is away at school.
  5. Shop around. Get quotes from different carriers to see which can offer you the best possible rates.
  6. Buy a car that is cheaper to insure. An older sedan is cheaper to insure than a convertible because its value is lower, and thus it costs less to repair. Talk to your insurance agent about good cars to buy that get better rates.
  7. Raise the deductible. You can take on more financial responsibility in an accident to get a better rate.
  8. Lower your coverage. Consider reducing coverage to lower premium rates. Think about eliminating comprehensive coverage or collision coverage on older vehicles. Keep in mind that you risk not having enough insurance if you have an at-fault accident, or if your car is damaged by non-collisions like inclement weather.

How to Get Car Insurance for a 16-Year-Old

  1. Have the car registration and their driver’s license available so you can get the correct information.
  2. Call an insurance carrier or complete an online quote.
  3. Provide the car’s year, make, model, and VIN.
  4. Provide your (or your teen’s) name, birthdate, and driver’s license number.
  5. Select the insurance coverage you want.
  6. Review the quote and purchase.

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If you are under 18 and getting your own policy, you will likely need a parent to co-sign, since you are not a legal adult able to enter into a contract.

Recap

Prepare for the sticker shock of getting insurance for a 16-year-old. Rates can be more than double what the parent driver pays for car insurance. While the average rate is $4,368 annually, you can reduce this by qualifying for as many discounts as possible.

Shop for quotes to find cheap car insurance in your area. While adding a 16-year-old to your policy is certainly expensive, other factors, like ZIP codes and driving history, also influence the rates.

Citations

  1. California Prohibits Auto Insurance Companies From Considering Gender When Setting Prices. Consumer Federation of America. (2019, Jan 7).
    https://consumerfed.org/press_release/california-prohibits-auto-insurance-companies-from-considering-gender-when-setting-prices/

  2. Age of Driver. National Safety Council. (2022).
    https://injuryfacts.nsc.org/motor-vehicle/overview/age-of-driver/

  3. Teen Drivers: Get the Facts – Who is most at risk? Centers for Disease Control and Prevention. (2022).
    https://www.cdc.gov/transportationsafety/teen_drivers/teendrivers_factsheet.html