Car insurance for teen drivers: adding a teen, licensing rules and ways to save

Why car insurance for teen drivers costs more

Insurers price auto insurance from expected claims, and young, inexperienced drivers have the highest crash rates of any age group. The Insurance Institute for Highway Safety (IIHS) measures how often drivers of each age are involved in fatal crashes for every 100 million miles they drive. Teens sit at the top of that chart, and the risk is highest at 16 and 17, in the first months after getting a license.

Boys are riskier than girls at the same age. Among drivers 16 to 19, IIHS counts 9.2 fatal crash involvements per 100 million miles for males and 5.2 for females, and 73% of teens killed in crashes in 2024 were male. The Centers for Disease Control and Prevention (CDC) adds that 16-year-olds crash at about 1.5 times the rate of 18- and 19-year-olds, which shows how much a single year of experience matters.

The NAIC, the national association of state insurance regulators, lists households with young drivers among those that tend to pay more, together with drivers under 25. Insurers may also price by gender; the NAIC notes that males tend to pay more. Read more about how age affects your premium in our guide to car insurance costs by age, or try the premium factors tool.

Adding a teen to your car insurance policy

Many families add the new driver to the policy that already covers the household's cars. The Texas Department of Insurance (TDI) says it is usually cheaper to add a teen to your policy than to buy a separate policy for a young driver. One reason is that a teen on the household policy benefits from the household's discounts and multi-car pricing.

When to tell your insurer

• Learner's permit. Rules differ by state and insurer. TDI notes that Texas does not legally require you to insure a teen who only holds a learner's permit, but it still tells parents to let the insurer know when a teen starts practicing in the family car. Your policy may already cover a permit holder who drives with a licensed adult, but check yours.
• Intermediate or full license. Once the teen can drive alone, expect to add them as a listed driver. Some insurers require every licensed household member to be on the policy.
• Turning 16. TDI's auto guide tells families to notify the company when someone in the household starts to drive or turns 16.

Leaving a licensed teen off the policy is risky. TDI warns that an insurer that finds an undisclosed driver may deny a claim, void the policy or refuse to renew it, and it can bill you for the premium you should have paid.

Adding a teen versus a separate policy

How graduated driver licensing works

All 50 states and the District of Columbia use graduated driver licensing (GDL) to ease teens into driving. NHTSA describes it as a 3-stage system:

1. Learner's permit. The teen drives only with a licensed adult and logs a set number of supervised hours.
2. Intermediate (provisional) license. After a road test, the teen can drive alone but with limits on late-night driving and on carrying teen passengers.
3. Full license. The limits fall away once the teen reaches a set age or holds the intermediate license long enough without problems.

GDL works. IIHS reports that teen crash deaths fell 50%, from 5,819 in 1996 (the year Florida became the first state to adopt graduated licensing) to 2,899 in 2024. NHTSA says GDL programs can cut a teen's crash risk by as much as 50%. IIHS also links a licensing age of 17 instead of 16 to a 13% lower fatal crash rate among 15- to 17-year-olds and 9% fewer collision claims among 16-year-old drivers, which is an insurance result as much as a safety one.

IIHS's best-practice model goes further than many state laws: a permit no earlier than 16, at least 70 hours of supervised practice, an intermediate license no earlier than 17, a night limit starting at 8 p.m., and no teen passengers during the intermediate stage.

GDL rules in six large states

States change these rules, and most allow exceptions for work, school or emergencies. Check your state DMV for the current version before your teen applies.

Teen crash risk: what the data shows

Knowing when teens crash helps families set house rules, and safer driving keeps the policy free of claims and surcharges.

• Night driving. 35% of teen driving deaths in 2024 happened between 9 p.m. and 3 a.m., according to IIHS.
• Weekends. Friday, Saturday and Sunday accounted for 51% of teen crash deaths in 2024.
• Teen passengers. 58% of teen passengers who died in 2024 were riding with another teen at the wheel. CDC says the risk rises with each extra teen or young adult passenger.
• Single-vehicle crashes. 41% of drivers aged 16 to 19 in fatal crashes in 2024 were in single-vehicle crashes, the highest share of any age group.
• Speeding. NHTSA found that 33% of teen drivers in fatal crashes in 2024 were speeding.
• Seat belts. 51% of teen drivers who died in 2024 were not wearing a seat belt.
• Alcohol. Even below the legal drinking age, 20% of fatally injured 16- and 17-year-old drivers in 2024 were at or above the blood alcohol limit that applies to adult drivers in most states.

Overall, NHTSA counts 2,320 people killed in 2024 in crashes that involved a teen driver, including passengers, other drivers and pedestrians. NHTSA suggests a written parent-teen driving agreement that spells out rules on night driving, passengers, phones and seat belts.

Ways to cut the cost of insuring a teen

Insurers set their own discounts and amounts, so ask each company you compare what it offers. Common options:

• Good student discount. Many insurers reward good grades or test scores, and TDI notes some of these discounts can last for years.
• Driver education. Completing a driver's education course usually earns a discount, and in some states it is part of the licensing process anyway.
• Telematics. Letting the insurer track driving through an app or plug-in device can earn a discount if the teen drives smoothly. Read how it works in our telematics guide.
• Student away at school. If the teen goes to college and leaves the car at home, TDI says you may get a discount. See car insurance for young drivers.
• Choose the car carefully. TDI says inexpensive cars and cars with good safety ratings usually cost less to insure.
• Raise the deductible. A higher deductible lowers the premium for collision and comprehensive.
• Keep the record clean. Tickets and at-fault crashes raise rates for years. See our page on driving record and premiums.
• Compare at renewal. Prices for the same teen can differ between insurers, so it can pay to shop around at renewal.

Example: suppose a teen backs into a pole and the repair bill is $3,000. With a $500 collision deductible, the family pays $500 and the insurer pays $2,500. With a $1,000 deductible, the family pays $1,000 and the insurer pays $2,000. The higher deductible lowers the premium, but you need the cash on hand if a claim happens.

Choosing coverage for a teen's car

Teens are more likely to cause a crash, so the liability limits on the household policy matter more once a teen is driving. If a teen injures someone, the claim can exceed state minimum limits, and the family's savings could be at risk. Some families consider raising their liability coverage limits when a teen starts driving.

For the car itself, the choice depends on its value. TDI suggests that on an inexpensive car you might drop comprehensive and keep collision coverage, which covers crashes. If the car is financed, the lender usually requires both. Our coverage checklist helps you decide what to keep.