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.

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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.

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.

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.

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.

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.

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.

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.

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.