September 10, 2019

Car Insurance for 18 Year Olds

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Teenagers pay a lot more for car insurance. Why? They're twice as likely to get into an accident. How much does car insurance cost for an 18-year-old driver? Keep reading to find out.

Individual vs Existing Policy

Teen drivers can purchase an individual policy. But they'll pay much less by being adding to an existing adult driver's policy.

Below are two tables illustrating the insurance rates per 6 months.

Prices for Individual Insurance Policy

AgeMaleFemale
16$4,126$3,923
17$3,616$3,373
18$2,690$2,450
19$2,081$1,969

**The above table illustrates rates in New York for a driver with no accidents and a 2018 Honda Accord. The prices include ONLY liability coverage, and no coverage for the car itself.

Prices for Adding a Teen to Existing Insurance

AgeMaleFemale
16$2,050$1,691
17$1,913$1,439
18$1,724$1,260
19$1,479$1,078

**The above table illustrates rates in New York for a driver added onto an existing insurance policy with married parents, high coverage, 2 existing vehicles, and no accidents. The prices do NOT include adding a third vehicle.

The total 6-month cost of adding an 18-year-old male to an existing policy is $1,932 than if he were to purchase a policy on his own.

For an 18-year-old female, the average yearly savings are even greater—$2,390.

Teen Car Insurance Rates by State

The average individual policy for college students and teens in the U.S. costs $5,919.70 per year (based on an 18-year-old male with a 2018 Honda Accord).

Rates vary based on location. More populated areas and states with frequent natural disasters have higher insurance rates since insurance companies are more likely to pay out large amounts on claims.

States with the highest costs for teen drivers include:

  • Louisiana
  • Michigan
  • Colorado
  • Texas
  • Missouri

The states with the lowest costs for teen drivers include:

  • Indiana
  • Hawaii
  • Wisconsin
  • Maine
  • Minnesota

Keep reading to find out how much car insurance will cost you in your state.

StateAnnual Premium6-Month PremiumMonthly Premium
Alabama$5,400.26$2,700.13$450.02
Alaska$5,633.38$2,813.69$469.45
Arizona$6,368.36$3,184.18$530.70
Arkansas$6,842.64$3,421.32$570.22
California$5,499.56$2,749.78$458.30
Colorado$9064.00$4,532.06$756.00
Connecticut$7,107.80$3,553.90$592.32
Delaware$7,183.48$3,591.74$598.62
Florida$6,438.80$3,219.40$536.57
Georgia$7,055.20$3,527.60$587.93
Hawaii$3,034.20$1,517.10$252.85
Idaho$4,664.60$2,332.13$388.72
Illinois$5,971.54$2,985.77$497.63
Indiana$2,865.10$1,432.55$238.76
Iowa$4,111.12$2,055.56$342.59
Kansas$3,959.10$1,979.55$329.93
Kentucky$7,795.52$3,897.76$649.63
Louisiana$12,919.24$6,459.62$1,076.60
Maine$3,207.60$1,603.80$267.30
Maryland$6,895.60$3,447.81$574.63
Massachusetts$5,578.00$2,789.00$464.83
Michigan$9,388.00$4,694.00$782.33
Minnesota$3,676.40$1,838.20$306.37
Mississippi$6,401.80$3,202.90$533.48
Missouri$7,845.80$3,922.90$653.82
Montana$4,835.00$2,417.70$402.95
Nebraska$5,099.74$2,549.87$424.98
Nevada$8,661.00$4,330.50$721.75
New Hampshire$4,262.54$2,131.27$355.21
New Jersey$7,514.00$3,757.00$626.17
New Mexico$6,738.00$3,369.00$561.50
New York$7,644.00$3,822.00$637.00
North Carolina$7,644.00$3,822.00$637.00
North Dakota$3,818.80$1,909.40$318.23
Ohio$4,462.4$2,231.20$371.86
Oklahoma$6,346.72$3,173.36$528.89
Oregon$4,926.52$2,463.26$410.54
Pennsylvania$6,245.66$3,122.83$520.47
Rhode Island$5,293.80$2,646.90$441.15
South Carolina$6,660.40$3,330.20$555.03
South Dakota$3,872.20$1,936.10$322.68
Tennessee$5,645.02$2,822.51$470.42
Texas$8,197.10$4,098.55$683.09
Utah$3,238.42$1,619.21$269.87
Vermont$4,474.40$2,237.20$372.87
Virginia$5,415.32$2,707.66$451.28
Washington$6,313.48$3,156.74$526.12
West Virginia$6,861.44$3,430.72$571.79
Wisconsin$3,058.06$1,529.03$254.83
Wyoming$3,850.20$1,925.10$320.85

*Figures are based on an 18-year-old male with a leased or financed 2018 Honda Accord.

Other Factors Affecting Rates

When determining rates, insurance companies look for the amount of risk an individual will bring to the company. Higher-risk individuals will get a higher premium, while lower-risk individuals will receive a lower rate.

Here are some reasons why car insurance rates for teenagers are so high:

Age and Driving Experience
Younger drivers have a greater risk of getting into accidents. Without driving experience, teens are twice as likely to get into an accident than adults over the age of 25.

Accidents and Tickets
If there are any existing tickets, accidents, or license suspensions, expect a substantial increase in price.

Credit Score
Individuals with higher credit scores will get a lower insurance premium, while lower scores will get a higher price. 18-year-olds and even college students generally do not have enough established credit to qualify for a low insurance rate.

Most insurance companies let you reorder your credit score every three years to qualify for a better insurance rate. Learn now to build credit and improve your score with our how-to guide.

Insurance History
Companies look at how long an applicant has had continuous insurance. Without a record, it is impossible to know whether or not a teenager is likely to get into an accident. That means a higher rate, even without any claims.

What Coverage Do Teenagers Need?

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Whether purchasing an individual policy or being added onto an existing policy, it is important to make sure that the coverage is sufficient.

Keep reading for a detailed guide on the right coverage to choose for teenagers.

Here are some useful tools to help you purchase the right insurance policy:
  • Our quote guide can make the process of getting a quote simple and quick.

  • Use our comparison tool to get quotes from many different companies at once. You can easily compare prices and coverage to make sure you are getting the best policy.

  • Our coverage guide explains the different coverages to choose from and can help you find coverage that is right for your family.

Liability

Also known as bodily injury, this coverage will compensate the other party for injuries sustained in an accident and will reimburse you for attorney fees in the event of a lawsuit.

Liability coverage is mandatory. Most states have a minimum amount of liability coverage; usually 25/50. Car leasing and financing companies typically require at least 100/300.

How Much Do I Need?
Choose high enough coverage to protect your assets in the event of a lawsuit.

This is especially important if you:

  • Are being added onto someone else's insurance policy
  • Own a home
  • Have a steady income
  • Have savings and/or retirement plans

If you are purchasing an individual policy, choosing your state minimum liability coverage can save you money.

Property Damage

Property damage covers any damage caused to someone else's property, including their car, home, trees, or even government property (e.g., traffic signs and light poles).

How Much Do I Need?
Most insurance companies offer a minimum of $25,000 in coverage. In the event of a multiple car accident or even totaling another party's car, expenses can run much higher.

Most experts recommend choosing no less than $50,000 in property damage coverage.

Coverage for Your Car

There are two main coverages that will cover damage to your vehicle:

  • Collision
    Pays for damage if your car was involved in a collision—whether it was with another moving vehicle or a solid object.

  • Comprehensive
    Pays for any damage caused by fire, storm, theft, or vandalism.

Before the insurance company will reimburse you for any damage, a deductible will apply. For example, if there are $3,000 in damages to your car and you have a $500.00 deductible, you will be reimbursed $2,500.00.

Most insurance companies offer comprehensive with Full Glass coverage. You do not have to pay a deductible to be reimbursed for glass damage.

How Much Do I Need?
The higher the deductible you choose, the lower your insurance rates will be. But make sure your deductible is within your budget in the event an accident occurs.

Unless you lease or finance your car, collision and comprehensive coverage is optional. Opting out of these coverages will lower the cost of insurance and can offset some of the cost of adding your teen onto your policy.

Consider removing these coverages if your vehicle is 10+ years old or if the value of the car is low.

Uninsured/Underinsured Motorist

This coverage will apply if you are involved in a not-at-fault accident with an uninsured driver or with someone who does not have enough liability insurance.

If your damages are not covered properly by the other party's insurance, you will be reimbursed by your own policy.

How Much Do I Need?
Typically, this coverage is required, and should match your liability coverage amount.

Rental Reimbursement

If your car is involved in an accident, selecting rental reimbursement will allow you to rent a car while your car is being fixed.

This is especially beneficial if you travel to work or school and there is no other vehicle available while their car is being fixed.

How Much Do I Need?
The basic coverage is $30.00 per day for a maximum of 30 days. However, this will only be enough for compact car (e.g., Honda Civic, Chevy Cruze).

If you prefer a larger vehicle or an SUV, or if you drive a high-end vehicle, choose a higher daily limit such as $40.00 or $50.00.

When renting a vehicle, you do not need to purchase additional insurance from the rental company. Your policy will extend to the rental car.

Discounts For Teen Drivers

When getting a quote, be sure to ask about any available discounts like:

Driver's Education Class
Most insurance companies will give an extra discount if you took a Driver's Education course before obtaining a license. This discount will typically fall off after being licensed for 3 years.

Defensive Driving Discount
Taking a 6-hour Defensive Driving course can save drivers up to 10%. The class can be taken online and is also often given in person at local churches, libraries, student unions, and community centers.

Monitoring Device
Many insurance companies offer a free safety monitoring device, such as Snapshot from Progressive and DriveWise from Allstate. The discount can range from 10%-30% depending on your driving habits.

Driver Assignment
Insurance companies will often reduce the price of insurance by assigning teen drivers to safer vehicles, such as an SUV or a vehicle with additional safety features. Ask your insurance agent if this is an option for you.

Low Mileage
Discounts are typically available for driving your vehicle less than 7,500 miles per year. Many insurance companies also offer smaller discounts for keeping the mileage under 12,000 miles per year.

Car Insurance for College Students
Insurance costs for college students are calculated using the same risk factors as other young drivers. But companies offer additional discounts for teens in college.
These include:
  • Good Student Discount
    If you have a B average or higher, you may qualify for a 2%-5% discount by submitting your most recent report card/transcript to your insurance agent.

  • Resident Student Discount
    If you plan on dorming on campus or living at least 100 miles away from home, you may be eligible for an extra 2%-5% off.

  • Organization Discounts
    Many insurance companies offer an extra 2% discount for being a member of qualified organizations, including fraternities, sororities, and honor societies.

Best Insurance Car Companies

Here are the top 10 insurance companies by written premium.

CompanyDirect Premiums WrittenMarket Share
State Farm Mutual Automobile Insurance$41,817,41618.1%
Berkshire Hathaway Inc.$29,596,40412.8%
Progressive Corp.$22,786,0349.8%
Allstate Corp.$21,430,4059.3%
USAA Insurance Group$13,154,9395.7%
Liberty Mutual$11,585,9765.0%
Farmers Insurance Group of Companies (3)$10,357,4974.5%
Nationwide Mutual Group$7,341,4763.2%
Travelers Companies Inc.$4,396,7051.9%
American Family Insurance Group$4,381,9621.9%

*Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute.

How to Get Insured

© CreditDonkey

Teen drivers have two options for getting car insurance: purchasing an individual policy or being adding to an existing one. Read on to learn more about each.

Purchasing an Individual Policy

Getting insurance is a simple process. Once you are satisfied with the insurance company and coverages for your policy, contact the insurance agent that prepared your quote.

At this point, the agent may ask you to:

  1. Choose the Effective Date
    If you are purchasing a new car, your insurance policy should start on the day you sign the papers at the dealership.

    If you are changing insurance companies, start your new policy on the same day as canceling your previous policy to avoid gaps in coverage.

  2. Make a Down-payment
    Most insurance companies require a minimum of 1 month's payment in order to start the policy. You may be able to get an additional discount for paying in full.

If you reside in NY, NJ, FL, MA, or RI, you may need to have a photo inspection completed. Photos will be taken of the outside of the vehicle to ensure that any pre-existing damage is noted. This process can help prevent false claims.

How to Add a Teen Driver

To add a teen to an existing policy, simply contact your insurance agent. Your agent will ask for some information about the teen driver, including their:

  • Name
  • Date of birth
  • Driver's license number

If you are adding another vehicle at the same time, you will also need to provide vehicle information including:

  • Year
  • Make
  • Model
  • If it is a leased or financed vehicle

You will likely be asked some questions to see if your teen qualifies for any additional discounts.

Bottom Line

The average cost of car insurance for teens in the U.S. is approximately $5,919.70/year. Generally, adding a teen to an existing policy will cost much less than purchasing an individual one.

There are also several discounts available to college students and teens that can help reduce the costs. For more information on teen car insurance, check out our detailed guide here.

More from CreditDonkey:


How Long Does it Take to Get Car Insurance


Best Car Insurance for College Students


How Does Car Insurance Work

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