How Much Is Car Insurance for a 16-Year-Old?

Adding a 16-year-old to a parent’s car insurance policy typically raises the household premium significantly.

It’s typically much cheaper to keep your teenager on your own car insurance policy rather than buy a separate policy to cover your teenager. And you can further keep costs down by choosing a safe and modest car, maintaining a good credit score yourself, ensuring your teen drives responsibly, and having your teen complete an approved defensive driving course.

A 16-year-old applying on their own costs about $9,090 a year, or $757 a month.

Most parents add their teen driver to their own policy, as they typically qualify for more discounts that way. Adding a teen and their car to your own policy may allow you to apply your insurance company's bundling or multi-car discount to your entire household premium, including your teenager’s premium.

If your teenager is on their own policy, they would lose the benefit of those discounts.¹

Additionally, most adults have much more established credit histories than teenagers do. If your credit is good, most insurers will provide much more favorable pricing in most states.

Insurance is expensive for 16-year-old drivers because they crash more per mile driven than any other age. According to the Insurance Institute for Highway Safety, the fatal crash rate per mile driven for 16- and 17-year-olds is about three times the rate for drivers 20 and older, and the risk is highest at age 16.²

Crash risk is especially high in the first few months after a teen gets a license, when the driver has the least experience.³

Luva Research reflects the same pattern in shopping data. About 36% of the youngest shoppers report at least one driving violation, the highest rate of any age group, falling steadily to about 18% among the oldest.⁴

Here’s a look at the lowest monthly premiums for a 16-year-old driver:

For the most accurate numbers, it’s a good idea to compare quotes from multiple insurers side by side. Use Luva to compare matched quotes built on your vehicle, coverage limits, and deductibles for drivers in your household. 

Call your insurer as soon as your teen receives a learner’s permit. Some insurers don’t require you to add your teen as an authorized driver until they are formally licensed, but notifying your insurer makes it less likely that they will deny a claim that occurs when your teenager is behind the wheel.¹

Once a teen is licensed, most insurers require every licensed driver in the household to be listed on the policy.

You don’t want to leave your licensed teen off the policy to save money. If they’re involved in an accident and aren’t listed on your policy, the insurer may deny the claim, cancel the policy, or bill you for back premium, depending on the policy and state law.

Possibly. But in most states, a minor generally can’t enter a binding insurance contract on their own, so a parent or guardian must hold or co-sign the policy.

It’s also generally more costly to hold a separate policy for your teen driver, since they won’t have the benefit of your household multi-car or bundling discounts. They also wouldn’t potentially benefit from your more established credit record.

A safe, moderate-value used car costs far less to insure than a new or fast one. It may also protect your teen better in a crash.

Here are some tips, according to the Insurance Institute for Highway Safety:⁵

• Skip “muscle cars,” sports/racing cars, and others until they have some driving experience

• Avoid minicars and anything under about 2,750 pounds. Personal injury claims and fatalities are higher in these smaller cars.

• Skip large SUVs and pickups, which are harder for inexperienced drivers to handle, take longer to stop, and tend to do a lot of damage in a crash. 

• Look for good crash-test ratings and modern safety features like automatic emergency braking (AEB) with pedestrian detection.

On the other end, don’t automatically opt for a cheap, older vehicle. These cars often lack functional airbags and modern safety features, which in turn drives up the price of insurance. Between insurance costs and repair bills, a car that’s too old may soon cost you the money you thought you were saving. 

You might choose liability only if your teenager’s car is worth only a few thousand dollars, you can afford to replace it quickly out of pocket, and you or your teenager owns it outright. The money you save by dropping collision and comprehensive can then be redirected toward better liability protection.

Keep full coverage if the vehicle is financed or leased (where full coverage is mandatory), worth significantly more than your comprehensive/collision deductible, or if losing the car without an insurance payout would cause financial hardship.

Because teen drivers have higher accident rates, skimping on liability limits is risky. The Insurance Information Institute (III) warns that state minimums are rarely enough, with average bodily injury claims around $28,000 and major accidents reaching six figures.⁶ One bad crash, or an accident in a car full of your teen's friends, and you can easily exhaust your policy limit. 

Most insurers offer some discount programs that may help you lower your costs:¹

• A good student discount for a “B” average or better

• A discount for finishing a recognized driver training course

• Multiple car discounts, or discounts for bundling your auto insurance and home or renters insurance with the same insurance company

• Low mileage and telematics

It’s also a good idea to start improving your credit a year before your teen gets a permit. In most states, a parent's good credit score can help lower the overall premium when a teenager is added to their existing family policy.⁷

Tip: Ask how your insurer assigns drivers to cars. Some insurers calculate premiums by assigning the teen to the most expensive car in the household. That results in a higher premium. If they do, consider requesting that your teen be assigned to the least valuable one; and raise your deductible to lower the premium, then steer that savings into higher liability limits.¹

Once you know which discounts and coverage options fit your family, compare on Luva. Luva pulls quotes from multiple insurers in one place, using identical coverage limits and deductibles for a real apples-to-apples comparison.