How Much Is Car Insurance for a 16 Year Old?
quick highlights
On average, families pay an additional $5,744 per year.
Adding your son is going to cost a lot more than adding your daughter.
If you can afford it, buy extra liability coverage.
Ah, sweet 16... In America, this age is a rite of passage for most teens. But it can also mean higher car insurance premiums for mom and dad.
It’s natural to worry about car insurance costs if your 16 year old will soon get their license.
In this article, we look at how an auto insurance underwriter determines car insurance premiums for 16 year old drivers.
We also review ways to lower your car insurance costs when adding a 16 year old to your car insurance.
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Average Premium Increases Caused by 16 Year Olds
The average 16 year old will add $5,744 per year to their parent’s auto insurance bill.
That’s an average of $479 per month!
Compared to the national average of $1,427 per year for an adult driver, buying car insurance for a 16 year old driver is costly.
Related Auto Insurance Articles:
Why Car Insurance Costs More for Your 16 Year Old
It's a good idea to know where car insurance companies are coming from when they jack up your rates.
Seeing a problem from all angles is a good way to solve that problem.
For your car insurance company, setting your rates comes down to risk.
The higher the risk, the higher the premium.
Top Auto Insurance Rates For Teens.
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Comparison quotes are quick, easy, and free!
16 Year Olds Really Don’t Know How to Drive Yet
Teen drivers are really inexperienced. The typical teen doesn’t think anything bad could ever happen to them.
As teens mature, they learn that bad things do happen all the time.
This is one of the reasons car insurance companies are going to charge you more for insurance.
Car insurance companies rely on their claims data.
They look back over their claims and see what age groups caused the most accidents.
The basic fact is that 16 year olds cause a lot of accidents.
According to the CDC, teen drivers ages 16-19 are three times as likely to be in a fatal accident than people over the age of 20.
tips for success!
Safety first!
Buy your son or daughter a reliable car that gets good gas mileage and is fairly large. Wrap them in metal so they are safe if they manage to crash it. Buy a bigger car!
16 year old drivers just don’t know what they are doing behind the wheel.
Driving safely takes practice. I heard once it takes 10,000 hours to gain mastery of a skill.
Car insurance companies equate this to about 3 to 5 years of experience.
Because a 16 year old has less experience behind the wheel than an older driver, age alone can significantly influence premiums.
It’s much cheaper to insure a good, experienced driver, than a new driver.
Cold, Hard, Rate Making By Car Insurance Underwriters
All Car Insurance companies base their rates on basically the same set of factors:
Cheapest Auto Insurance For 16 Year Olds!
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A Closer Look at Underwriting of a 16 Year Old Driver
Age
We’ve already discussed this at great length, so we won’t spend much time here.
Bottom line: the sweet spot for car insurance companies are drivers who aren’t too old and aren’t too young.
Auto insurance companies like to insure people between the ages of 20 and 75.
This age group has experience and a developed frontal cortex.
They statistically don’t cause as many accidents as a 16 year old.
Gender: Why Car Insurance For a Boy Costs More
If you are the parent of a boy and a girl, you know the differences in how they act.
The difference in decision making between young male and female drivers is extreme.
16 year old boys are not all the same.
Somewhere, there are probably some 16 year old boys who are very mature. Somewhere…
don't be a dodo!
By Texting and Driving!
Don’t forget to have your teen set their phone to stop incoming text notices while driving. There are even some apps disable their phone while driving.
But the typical 16 year old boy is going 1,000 miles an hour, just standing still.
Put him behind the wheel and he is going to have some lapses in judgement.
They usually don’t see the danger in driving fast and taking chances.
Statistically speaking, a 16 year old male driver is more likely to get a ticket or be involved in an accident than a 16 year old female driver.
According to the IIHS, teenage boys, age 16 to 19, are three times more likely to be in a fatal crash than girls.
Check their study graphics by clicking here.Type of Vehicle: Selecting a Car for a 16 Year Old
Some lucky 16 year old drivers will be given their own car by their parents.
Insurance companies are going to consider this when setting their rates.
Basically, if the car is really fast and considered “high performance”, insurance is going to cost a lot more than an average car.
Driving History and Driving Experience (or lack thereof)
When setting rates, Car Insurance Companies look at the past 3 years of driving history.
Driving history is kind of like credit history.
Like not having any credit history, a lack of driving history is BAD for your rates.
The car insurance underwriter also looks at how long a driver has been licensed.
Less than three years of experience is considered a “new driver”, so rates are higher.
Needless to say, these are big reasons why a 16 year will cost more to cover with your car insurance.
Insurance Term Explained:
Insurable Interest: You can only buy insurance for something you own or against events that would cause you to lose money. 16 year olds don’t usually own the cars they drive and they are usually not financially responsible for the accidents they cause.
Annual Miles Driven
This factor applies to all drivers of all ages.
The more you drive every year, the more likely you are to get into an accident.
If you live close to school and work, you will pay less than someone who lives 20 or 30 miles out of town and has a longer commute every day.
Remember, it's all about probabilities, so someone who drives more is going to have higher rates.
Grade Point Average
This is one your 16 year old driver can actually control.
A Grade Point Average of 3.0 or higher will typically earn a discount from auto insurance companies.
If your 16 year old is struggling to stay motivated in school, this might be a good way to encourage them to study.
Let's looks at a great example...
Based on a true customers experience, names and some details changed to protect their identities.
Trevor and Mary’s son, Mitch, turned 16 in December and started driving last month.
He begged them to let him get his license and they relented.
It was against their better judgement, but they wanted their son to be happy.
He has great grades and is very responsible. Usually...
On his way home from a friend’s house the other day, he was distracted by an incoming text message.
He didn’t see the light turn red.
He ends up blowing through the red light and hitting a minivan broadside, killing the driver and injuring multiple occupants.
Mitch is 100% at fault and his auto insurance settles the lawsuit for $4,500,000 in damages.
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There is no insurance that will ever assuage the guilt and pain Mitch and his parents will live with for the rest of their lives.
But, luckily, Trevor and Mary were savvy car insurance buyers.
When Mitch was added to their car insurance, they maxed out the amount of liability insurance coverage they could buy.
Even though it was really expensive, they knew the odds of Mitch having a bad accident were really high.
So they cut their expenses in other areas so they could protect themselves and their financial future.
How to Get the Best Car Insurance Rates for 16 Year Old Drivers
Shop Around Before they Get Their Learner's Permit.
In most states, a teen can get their learner's permit when they turn 15 ½ years old.
Before they get their permit, take these three steps:
- 1Gather all of your car insurance information. Prepare to Shop for Quotes.
- 2Start shopping for Car Insurance
- 3Call your current auto insurance company. Ask how much their rates will increase.
How much will insurance cost with a 16 year old driver?
To find out for sure, you’ll have to get some quotes.
It’s best to start shopping before your teen gets a learners permit.
That way, you'll have a chance to adjust your budget and find an insurer who is willing to sell auto insurance to your teen driver at the best price.
Read More About Auto Insurance
Your insurer and policy type.
The company you buy insurance from and your policy options play a major role in how much you pay for car insurance.
This highlights an important step in getting car insurance for your 16 year old:
Shopping around to explore quotes and policy options.
Before purchasing car insurance, compare rates from several car insurance carriers.
This helps you decide which company is best and makes sure you’re getting a good rate for your teen driver.
Many of the best auto insurance companies offer discounts for student drivers:
Top Auto Insurance Rates For Teens.
Switch and save on average $750/yr. Bundle and save even more! Compare best rates online in minutes!
Comparison quotes are quick, easy, and free!
Talk to your Teen Driver About the Car Insurance
Make sure your young driver understands the responsibilities that go along with being able to drive.
Explain safe driving tips and reinforce the consequences of infractions, citations and accidents, including paying more for car insurance.
Action Item: Find some videos of car crashes online. Make sure you watch them first, so you can make sure they aren’t too graphic. Then, have your 16 year old son watch them. Hopefully, this will make him see the reality of what can happen if he is not careful on the road. You can get started comparing quotes here.
Should you add teenage drivers to your policy?
Yes, if a teen is driving your cars, the only way to have a claim covered is to have them listed on the policy as a driver.
Should your 16 year old teen get their own car insurance policy?
Typically, this is not possible.
Insurance companies will only sell car insurance to the owner of a vehicle.
No registration equals no insurable interest.
So unless you are an independent 16 year old with their own car, you can’t buy an insurance policy on a car that is registered to your mom or dad.
In most states, 16 year olds are still considered minors.
I’m pretty sure minors are not allowed by the Department of Motor Vehicles to register a car in their own names without a court order or extenuating circumstances.
The bottom line on car insurance for 16 year olds
Figuring out how much car insurance is for a 16 year old might be as easy as calling your insurance company to get a quote.
However, it’s best to be an informed consumer.
When shopping around for rates, keep these cost-saving strategies in mind. And don't forget to include your young driver in the conversation about the importance of safety behind the wheel.