What Parents Need to Know

Your child turning 16 is a big milestone. But while you’ve spent time researching the safest cars and how to help them pass their driver’s test, you’ll also need to update your car insurance.

Because they’re newer drivers and statistically more likely to be in accidents, teenage drivers are the single most expensive demographic to insure.

Adding a teen to a family policy with two adults can cause premiums to shoot up 150%, according to the Insurance Information Institute. A teen with their own policy can expect to pay double or even triple what their share would be on a family policy.

Thankfully, there are still some ways to save on auto insurance with a young driver in the family.

Having a teen driver on their own insurance policy is significantly more expensive than adding them to yours.

According to Bankrate, the average premium for an 18-year-old (the youngest age you can get a policy) is nearly $7,000 a year for a young woman and slightly more than $7,600 for a young man.

In comparison, a policy with two adult drivers and an 18-year-old girl averages just over $5,500. With an 18-year-old boy on your policy, the average is just under $6,000.

Once you add a teen, the policy you’ve had for years might not be the cheapest anymore. Insurers consider risk differently, so one may charge more for a young driver than another.

With affordable rates and generous student discounts, Travelers and Geico are two of our top picks for teen car insurance.

Keeping all of your policies with the same insurer makes it easier to manage, but it can also score you a hefty bundling discount, with or without a teen driver.

Your child’s good grades can pay off with lower car insurance premiums: Providers like Geico, Auto-Owners and Progressive have generous good-student discounts for high school or college students with a B average or better. At up to 25%, State Farm’s is the biggest we’ve seen.

There are other ways to save, too: Many insurance companies offer discounts for young drivers who complete an approved defensive driving course or leave their car behind when they go off to college.

If your child has joined a fraternity, sorority, or honor society, they may qualify for an affiliation discount, and students in the armed forces are eligible for military discounts. A number of colleges and alumni associations negotiate their own discounts, as well.

Telematics programs give feedback on driver performance and habits and can even pinpoint your car’s location.

State Farm’s Steer Clear program is designed for drivers under 25 with no at-fault accidents or moving violations in the past three years. In addition to completing lessons, watching videos and taking quizzes, participants clock five hours on the road to receive an in-app certificate of completion and a discount of up to 15%.

The company’s Drive Safe and Save program, another telematics-based offering, collects driving data on acceleration, braking and cornering to help drivers earn a discount of up to 30%.

Because they’re worth more and their parts and technology are more expensive to repair or replace, new cars cost more to insure. Used cars have a lower resale value and parts that are cheaper to replace, so they’re usually cheaper to insure.

If you own the car outright and it’s not worth ten times your annual premiums, you might even consider dropping collision and comprehensive insurance and just keeping a liability policy, which can be a third of the cost of full coverage.

Don’t give them a clunker, though: Many top insurers have discounts for anti-lock brakes, anti-theft devices and passive restraints.

Nobody wants to think about it, but without years of experience behind the wheel, a teen is more likely to cause a serious accident. If the damages or injuries are beyond your liability limits, you could be on the hook for thousands or even hundreds of thousands of dollars.

Umbrella insurance provides additional coverage and is relatively affordable: $1 million of umbrella insurance runs just $150 to $300 per year. American Family offers a bundling discount of up to 26% when combining home, auto and umbrella insurance.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every car insurance review is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of insurance products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

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