The Best Insurance for Teenage Drivers in 2023

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Written by J.J. Starr Edited by Quiana Darden Reviewed by Amanda Clear

Updated February 1, 2023

When you’re about to get your driver’s license, one thing is clear: you’re not a young kid anymore! And nothing makes this more evident than the cost of your car insurance premium. The average premium for 16-year-olds is more than $300 a month! If you (or your parents) pay this much, you want an insurer that offers the best coverage.

This article will discuss strategies for finding the best insurance for teenage drivers. Plus, we provide many valuable tips to help you choose the right policy and find specific programs designed for teens

Key Takeaways:

• Teenagers pay the highest average cost for car insurance because their lack of experience behind the wheel makes them risky to insure.
• The best auto insurance will vary depending on your needs, but some cater to teen drivers more than others.
• Top discounts for teenage drivers to look for include the good student discount (5 -20%), defensive driver course discount (up to 20%), and telematics discount (up to 30%).

Best Car Insurance Policies for Teen Drivers

There’s an excellent way to set up a car insurance policy and a better way. It’s more than complying with the law by securing state minimum coverage. The ultimate goal is to shield yourself from serious financial consequences. Below we detail the types of coverage you may need, plus how to tell when you need it. 

Liability Insurance 

Liability coverage is the foundation of your insurance policy. It’s what’s part of your state minimum insurance plan. Liability coverage only pays for damage to other people’s property or person. 

There are three limits you can choose when selecting a liability policy:

• Bodily injury limit per person
• Bodily injury limit per incident
• Property damage limit

You must maintain at least state minimum coverage, which varies by state. But you can select higher limits for an additional, though typically small, cost. 

Comparing rates for a policy with the minimum, medium, and maximum coverage is a great idea. That way, you can understand the full range of policy options available. 

Full Coverage

A full coverage insurance policy includes comprehensive and collision coverage. Collision insurance protects your car in the event of an at-fault accident, while comprehensive coverage is for non-collision-related events, such as hail damage or theft. If your vehicle is under a lease or loan, your lender will require you to carry a full coverage policy. 

Additional Insurance Coverage You May Need

Most drivers need additional coverage options to have enough protection. You should add these coverages to your policy if paying for expenses out of pocket will hurt you financially. Below are three common and valuable options everyone, especially teens, should consider adding to their policy.

• Uninsured and underinsured motorist protection covers you when someone without insurance or enough insurance hits you. Nationally, about 1 in 8 drivers are uninsured, according to the Insurance Research Council. One or both options are mandatory in 20 states, but we recommend you carry both.
• Medical payment or personal injury protection (PIP) covers your medical expenses in the event of a car accident. You need to purchase this type of coverage in states where it’s mandatory. It’s optional in other states and can be a good idea, especially for people with high-deductible health insurance. 
• Gap insurance kicks in if your vehicle is stolen or declared a total loss. In this case, your insurer pays the difference between what you owe on your loan and the value of your car. With gap insurance, you won’t have to continue paying the loan for a vehicle you can’t drive, so that it can save you big time. 

Best Car Insurance Companies for Teen Drivers

There are hundreds of car insurance options in every state. Each has its pros and cons, along with special programs it provides to those covered by the company. Here are some of the best car insurance companies for teen drivers.

Erie Insurance

• Pros: High claims and customer satisfaction, low customer complaints, policies and discounts tailored to teenagers. 
• Cons: Clunky website and mobile app, available in just a handful of states. 
• Best for: Teenagers residing within the service area.

Erie Insurance earns high scores for customers and claims satisfaction from JD Power, regularly recognized as one of the best regional insurers in the country. It offers competitive rates and three significant discounts for drivers under 21. 

The Youthful Driver discount is for teens who live with their parents, while the Youthful Driver Longevity Discount is a loyalty program for teens who stay insured with Erie. Last, the Driver Training Discount is for teens who complete an accredited driver training program, including the teenSMART program. 

But Erie needs a top-of-the-line mobile app and website. While everything is functional, customers report it’s not the most accessible tool. Another downside: Erie is only available in the District of Columbia and 12 states — Illinois, Indiana, Kentucky, Maryland, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, and Wisconsin. 

Allstate

• Pros: Accident forgiveness for teens, teenSMART training program, and excellent claims satisfaction.
• Cons: Lower-than-average customer ratings in some areas, average or higher rates compared to competitors.
• Best for: Teens who want driver training.

Allstate offers a ton of features tailored to teen drivers and their families. The teenSMART driver training program teaches you to be a safer driver. It also comes with a discount that covers the (already discounted) course cost of $69.95. The company offers two rare features: accident forgiveness for teens and a claims satisfaction guarantee. 

But it’s important to check local reviews when working with Allstate. The company uses an agent model, which means customer service varies from agent to agent. Allstate’s rates are less competitive, though the discount programs make a big difference. 

GEICO

• Pros: Easy-to-use website and app, responsive customer service, lots of discount programs, including a teen-friendly telematics program. 
• Cons: Average customer satisfaction ratings and no gap coverage. 
• Best for: Drivers looking for the cheapest teen car insurance premiums nationwide. 

As one of the nation’s largest insurance companies, GEICO makes ease of use a top priority by investing in a user-friendly website and app. Plus, the customer service team is easy to contact when you have questions. 

The company offers competitive rates with plenty of discounts that parents can share with their teen drivers. GEICO also provides the Good Student discount for teens holding a B average or better. Teens can also get a discount for completing a driver training course. And at 21, they earn free accident forgiveness plus a Good Driver discount if they’ve maintained a clean record.

On the other hand, GEICO doesn’t stand out regarding claims satisfaction, customer satisfaction, and complaints scoring. 

Nationwide

• Pros: Offers accident forgiveness and usage-based insurance to teens, good claims satisfaction scores, and a great website and app. 
• Cons: Lower-than-average customer satisfaction and policy renewals. 
• Best for: Teens who want accident forgiveness. 

Nationwide customers also report higher claims satisfaction levels and lower complaints compared to similar large insurers. The company offers a Good Student and defensive driving class discount for teen drivers. If they don’t drive often, they can also enroll in the cost-cutting pay-per-mile program, Smart Miles. Policyholders report that the website and mobile app are easy-to-use and helpful. 

Teens can participate in accident forgiveness programs, giving them one get-out-of-jail-free card. The perk is a rare option for young drivers, as many insurance companies require drivers to be over 21 for the benefit. Accident forgiveness is cheap but not free. And, notably, the program’s availability is limited to “select states.”  

Despite the low number of customer complaints, Nationwide earns lower-than-average scores from JD Power for customer satisfaction. And the somewhat lower-than-average renewal rates suggest some customers are finding reasons to switch. 

State Farm

• Pros: High customer service and policy renewal scores, low rates for teens added to a parent’s policy, generous telematics program.
• Cons: There are higher premiums for teens without parents on the policy. 
• Best for: Teenagers interested in a telematics program. 

State Farm is one of the biggest names in car insurance. The company writes a lot of policies and delivers them with a highly-rated customer service team. The high number of policy renewals (with a generous 14% discount) speaks volumes about customer satisfaction. 

In addition to the Good Student and driver training discounts, State Farm also offers the Drive Safe & Save program, which is an excellent fit if you’re new behind the wheel. It can save you up to 30 percent on monthly premiums. All you need to do is practice safe driving habits.

State Farm doesn’t offer many customized policy options or perks like a vanishing deductible. The company is less advantageous for teens who need to purchase a policy alone. Research from Forbes suggests the company also only offers low rates to drivers with credit, which would include most teenagers.

Why Teenage Drivers Are So Expensive to Insure

Teens pay high premiums because they pose the most significant risk to car insurance companies. Auto insurers lose money when they pay out claims, so they must price policies according to how likely a driver will file a claim with the insurer. 

Teenagers, and other new drivers, have less experience on the road and are, therefore, more likely to be in an accident. They’re also more likely to engage in risky driving behavior, such as texting and driving. 

Insurance companies adjust policy costs to cover the risk of insuring a young driver. Conversely, insurers quickly lower rates for drivers who can prove they’re responsible. That’s why keeping a clean record and taking a defensive driving course is a great way to pay less (more on this next).

Car Insurance Discounts for Teens

Discounts are one of the top ways to save money on car insurance. But some, like the good driver discount, are unavailable to brand-new drivers. Don’t fear — there are still three highly valuable discounts teens can and should take advantage of to maximize savings. Plus, you’ll still have access to others beyond these primary ones.  

Good Student

If you’re a high school or college student, you can receive a good student discount for good grades. While the requirements vary, most insurers require at least a B average to save. The value of the discount also varies, but you should expect to shave about 7% off your premium price. 

Some of the best insurance companies offering the Good Student discount or an alternative include:

• Allstate
• American Family
• Farmers
• Erie
• GEICO
• Nationwide
• Progressive
• State Farm
• Travelers

Defensive Driving Class

If you spend about $50 completing a defensive driving class, you can save as much as 20% on your car insurance costs, an option few drivers take advantage of, surprisingly. Still, the potential savings are massive as the discount lasts for three years. 

In addition to saving money on your policy, taking a defensive driving course also means you’ll learn skills making you likely to cause or be in an accident. 

Auto insurance companies that offer discounts for completing an approved defensive driving course include:

• AAA
• Allstate
• Liberty Mutual
• State Farm
• Travelers

Usage-Based Insurance & Telematics Programs

Usage-based car insurance (UBI) is a policy that charges according to how often and how much the driver uses their vehicle. Telematics is an insurance program that adjusts the premium based on the driver’s habits. 

Drivers using UBI or telematics can download an app or install a device to track their driving. It will follow when they drive, their speed, how hard they brake, and more. The information goes to the insurance company, which uses it to fine-tune its risk calculation. 

The genius of this type of discount is that it influences drivers to practice better driving habits, which means people drive safer and are less likely to cause an accident. While some carriers won’t use adverse data against you, others will. It can be a disadvantage if a young driver is participating in a telematics program with a company that will hold their less-than-desirable driving habits against them and increase their premiums as a result. 

Many insurance companies now offer UBI policies, telematics programs (or both!) Some of our favorites are:

• AAA Drive
• Allstate Drivewise
• Allstate Milewise
• GEICO Drive Easy
• Esurance DriveSense
• Farmers Signal
• Liberty Mutual RightTrack
• MercuryGo
• Metromile
• Nationwide SmartRide
• Progressive Snapshot
• Root Insurance
• Safeco Low Mileage Discount
• Safeco RightTrack
• State Farm Drive Safe & Save
• Travelers Intellidrive

Tips to Find the Best Car Insurance for Teenage Drivers

Getting the right car insurance for teenagers follows the same principles as finding the right car insurance for any other driver:

1. Understand what you need most from your insurance policy. 
2. Gather quotes from the top providers in your area. 
3. Compare policies based on coverage options, perks, discounts, customer ratings, and other factors. 

Understand the Coverage you Need

Begin your search by understanding the types of coverage you need, your desired policy perks, and your budget. Prioritize your list so you know what features are most important. 

Here are some options to consider:

• Accident forgiveness: This allows you to avoid premium increases in the event of your first at-fault accident. It’s a rare option for teens since most companies require you to be 21 years old. However, there are some options out there.
• Driver education: Many insurers offer teen-specific training courses that teach how to practice safe driving habits. These typically come with a discount that pays for most of their cost.
• Mobile app: Having a mobile app is beneficial for many reasons. The biggest is that drivers can access their insurance card anytime, which is perfect if your teen forgets their card at home or misplaces it. 
• Telematics programs: These are programs that monitor driving habits and mileage and reward risk-reducing driving behavior with discounts. 
• Vanishing deductible: Reduces your deductible every year you go without an accident (at no additional premium).

Gather Quotes from Top Providers

With your notes in hand, request quotes from your current insurer (if you’re the parent of a teenager) plus three to five insurers in your area. Our list above is a great place to start, but you can make the process easier by searching with Compare. 

Use our auto insurance comparison tool to get quotes from the best insurance companies in your zip code. Your results page will let you complete step three with ease.

Compare Insurers

When comparing auto insurance companies, you want to look at more than the price. Remember that price is just one factor to consider. Two policies with similar pricing can offer wildly different features and benefits. One might come with accident forgiveness and a top-notch customer service team, while the other provides less coverage and no policy perks. Here are some questions to ask:

• What are the coverage options and limits of this policy?
• What do current customers think of this insurer?
• Does this policy come with all the features I need?
• Does this policy have coverages I don’t need?
• Is the customer service center easy to contact?
• Are the website and mobile app functional and easy to navigate?

Following these steps is a surefire way to get the policy you need from a reputable provider without overpaying. Of course, if cost is your number one factor, there are additional ways to save on teen car insurance. 

Additional Tips for Teenage Drivers

Try accident forgiveness: You’re most likely to cause a car accident when you’re a new driver. Protect yourself by paying a little extra for accident forgiveness. With this policy add-on, you can avoid paying higher rates in the event of an at-fault accident. 

Purchase more than state minimum insurance: In most states, minimum car insurance coverage isn’t enough to protect you. We recommend choosing higher liability limits and carrying additional coverage, especially uninsured motorist protection, even if your state doesn’t require it. Luckily, these other coverages often add little to your premiums while adding a ton of valuable coverage.

Consider an umbrella policy: Umbrella insurance pads your existing insurance policies with additional protection. The great news is that by adding it, you often receive a bundling discount that can cover part or all of the umbrella premium.  

Tips to Save Money on Car Insurance for Teenage Drivers

1. Choose a cheap car: Starting with an inexpensive vehicle is the easiest way to keep costs low. That’s because less expensive cars typically cost less to insure. You can also buy a liability-only policy if you buy the vehicle in cash. You’ll have to weigh the pros and cons to determine if skipping full coverage is worth the risk. 
2. Raise your deductible: Your deductible is the amount you pay out of pocket in case of a claim. The higher your deductible, the lower your premium. Just be sure you can pay the deductible unexpectedly because your insurance company will only contribute to a claim once you do so.
3. Combine discounts: A single discount saves only a couple of dollars per month. But combining them results in hundreds in savings every year. 
4. Stay on your parent’s policy:  Being added as a secondary driver to a parent or guardian’s policy is almost always cheaper than buying your policy. 
5. Keep the title in your parents’ name: Insurance companies tend to charge less for vehicles registered to the parent or guardian.  
6. Compare rates: You never know which car insurance company will offer you the best rate. Comparison shopping is the best way to find out. And, because rates often change, comparing rates before you renew your policy is a good idea. You should always take advantage of a chance to score a cheaper premium while maintaining quality coverage. 
7. Drive less: Mileage is one of the many variables affecting car insurance costs. The less you drive, the cheaper your policy. Plus, if you don’t drive often, you can sign up for a usage-based insurance plan. 
8. Practice Safe Driving: Teens with traffic violations pay much higher rates than teens with clean records. The best way to keep a good driving record is by obeying traffic laws and using safe driving habits. 

Teen Driver Auto Insurance Programs

Several programs help teens become better drivers and cheaper to insure. Below are our top picks for auto insurance programs for teens. 

teenSMART

teenSMART is a driver training program specifically designed for new teenage drivers. It uses computer-based lessons and child-parent exercises to cover the six leading causes of crashes and how to prevent them. Course completion also earns you a discount with the following auto insurers:

• Allstate
• Central Insurance Companies
• Commonwealth Casualty Company
• CSAA Insurance Group
• Erie Insurance
• The Hanover Insurance Group
• Liberty Mutual
• MAPFRE Insurance
• Farmers Insurance
• Mutual of Enumclaw
• West Bend

Teen Safe Driver℠ Program

The Teen Safe Driver program from American Family Insurance is available to drivers up to 21 years old. It’s a telematics program tailored to teen drivers. To participate, simply download the smartphone app, which monitors for risky habits like distracted driving and provides a score for each trip your teen takes. It also gives feedback about how the teen can improve their driving. 

Parents can access their teens driving scores and feedback. Best of all, it helps you save up to 10% on your premium. 

Telematics Programs

You may have noticed a theme. Telematics programs (aka driver behavior monitoring) greatly help teens improve their driving skills and earn policy discounts. Drivers can score a 5-30% percent discount on their premiums. But let’s not glance over the benefits of improving your driving skills.

One Willis Towers Watson study found that telematics programs with fleet vehicles (i.e., commercial drivers) reduced crash rates by 80 percent. Moreover, because these programs discourage hard accelerations and speeding while encouraging driving fewer miles, telematics programs also reduce emissions (and fuel costs).

Here’s a list of telematics programs that allow teen participation. 

• Allstate – Drivewise
• Esurance – DriveSense
• Farmers – Signal (youthful driver component)
• GEICO – DriveEasy
• Liberty Mutual – RightTrack
• Nationwide – SmartRide 
• Progressive – Snapshot
• Travelers Insurance – IntelliDrive
• Safeco – RightTrack
• State Farm – Drive Safe & Save

Teenage Driver Car Insurance: Frequently Asked Questions

Best Teenage Driver Car Insurance: Frequently Asked Questions

What factors influence the cost of teen car insurance?

Many things influence your cost, including driving history, location, and vehicle. Age is another significant factor, but it isn’t all about numbers. It’s also about driving experience — new drivers, whatever their age group, will pay more than experienced drivers. Gender can also make a difference, as male teen drivers pay higher rates than female teen drivers. 

What is the cheapest auto insurance for new drivers?

GEICO, Nationwide, American Family, and Erie Insurance are all well-known for offering competitive rates to new drivers. That said, you won’t know which company will provide you with the cheapest rate unless you compare them. Though large national carriers get a lot of attention, smaller insurance companies can also offer low rates. Finally, remember that the lowest possible rate isn’t everything. 

Is it cheaper to be on your parent’s car insurance?

Almost always. When you stay on your parent’s policy, you can access certain advantages you couldn’t get without them. Older drivers tend to have higher credit scores and more discount opportunities, which can translate into lower rates for teen drivers. If your parent is unavailable for insurance sharing, consider joining forces with another older relative in your household.

J.J. Starr Insurance Writer

J.J. Starr is an insurance writer for Compare.com who specializes in auto insurance and personal finance. She has a passion for helping people save money by explaining complex topics like car insurance in a way that is simple and easy to understand. Prior to writing for Compare.com, J.J was a registered banker and life insurance consultant. She holds a master's degree in writing from New York University and a bachelor's degree from Stephens College.