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.
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.
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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:
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.
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.
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.
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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.
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.
California Prohibits Auto Insurance Companies From Considering Gender When Setting Prices. Consumer Federation of America. (2019, Jan 7).
Age of Driver. National Safety Council. (2022).
Teen Drivers: Get the Facts – Who is most at risk? Centers for Disease Control and Prevention. (2022).