Teen Driving 101: Getting the Right Car Insurance

Once you've determined whether your family will get another car and what kind, the next step is figuring out insurance.

We'll cover important factors to consider when buying insurance and ways to save on auto insurance premiums.

When you add your teen to your policy, be prepared for higher premiums.

"Teenagers/new drivers have a higher rate of accidents on the road, which means they may need to file more claims when compared to the average driver. This higher risk can increase your rates, which can be frustrating to grapple with," says David Adler, Adler Insurance Group president.

Mike Wall of Next Century Insurance, offers additional insight on what kind of rate increases to anticipate: 

"According to the Insurance Information Institute, adding a teen girl can increase insurance rates by 50 percent, while adding a teen boy can increase rates by 100 percent."

With such a large rate increase, you'll want to choose an insurer with the best rates and find as many discounts as you can.

• Choosing a good insurer
• Saving on insurance

Choosing a good insurer

Taking time to compare coverage options and rates will help you save on premiums while ensuring you and your teen have the coverage you need.

"I advise families in this situation to contact a couple of the majors and then a few local providers and have them all present some coverage options for you to weigh against one another as closely as possible with an apples-to-apples approach, where possible," says Brent Thurman, Keystone Insurance Services president.

As you consider which insurers to work with, insurance research specialists and customer reviews can help you narrow down your choices. 

"Opt for a company that offers the best car insurance for teens. Based on in-depth industry research, Liberty Mutual, State Farm, USAA, GEICO, Progressive and AAA offer the best rates for young drivers. Each of these insurers offers some of the highest discounts available for young drivers, as well as perks like accident forgiveness," recommends Cecilia Beard, auto insurance expert for Motor1.com.

Customer reviews can also offer helpful insight on companies. By reading reviews, you can get a sense of the customer experience with an insurer and how well it treats its policyholders.

Many of the companies Beard identifies are also highly rated by customers on Best Company.

GEICO, Progressive, State Farm, AAA, and USAA are ranked in the top 10 insurers using an algorithm that weights customer reviews. Liberty Mutual is ranked 17th but has significantly fewer reviews than the others.

Progressive

Progressive is ranked first on BestCompany.com. Progressive has 349 reviews with a 4.2/5 average star rating.

• 5-star — 53 percent
• 4-star — 25 percent
• 3-star — 11 percent
• 2-star — 5 percent
• 1-star — 7 percent

GEICO

GEICO ranks second. It has received 894 customer reviews with a 3.6/5 average rating. Its review breakdown is

• 5-star — 49 percent
• 4-star — 16 percent
• 3-star — 6 percent
• 2-star — 5 percent
• 1-star — 25 percent

State Farm

State Farm comes in fourth with 554 reviews and a 4.3/5 average rating.

• 5-star — 56 percent
• 4-star — 24 percent
• 3-star — 11 percent
• 2-star — 4 percent
• 1-star — 5 percent 

AAA

AAA follows State Farm in the rankings. It has 473 reviews and an average rating of 4.2/5. Although these are good ratings, it's tricky to gauge the customer satisfaction with auto insurance since an overwhelming majority of the reviews focus on AAA roadside assistance.

Below is AAA's review breakdown:

• 5-star — 63 percent
• 4-star — 17 percent
• 3-star — 4 percent
• 2-star — 2 percent
• 1-star — 14 percent 

USAA

USAA ranks sixth. The insurer has received 362 reviews and an impressive 4.7/5 average star rating. It has the highest percentage of 5-star reviews of the auto insurers mentioned in this section, which is an excellent sign if you are eligible for USAA membership.

• 5-star — 84 percent
• 4-star — 10 percent
• 3-star — 2 percent
• 2-star — 1 percent
• 1-star — 2 percent 

Liberty Mutual

Liberty Mutual ranked seventeenth on Best Company's list, although the insurer has received far fewer reviews by comparison to the above insurers. Liberty Mutual has received 61 customer reviews with an average rating of 3.8/5.

Here's the review breakdown:

• 5-star — 43 percent
• 4-star — 25 percent
• 3-star — 13 percent
• 2-star — 5 percent
• 1-star — 15 percent

Saving on insurance

Once you've found a good insurer, you'll want to check eligibility for discounts. Commonly offered discounts for teens include driver monitoring programs, good student discounts, and drivers education discounts. 

Driver monitoring programs

The programs have become commonly offered by insurers. Using an app or a monitoring device provided by the insurance company, you'll get a rate based on your teen's personal driving habits.

Driving monitoring programs are also available for adults. Some companies may offer an initial discount for participating in the program. Keep in mind that rates can be better or worse depending on driving.

"Rather than predictive rates based on group trends, these programs allow for a rate based on your driving habits." Janet Ruiz, Insurance Information Institute strategic communications director.

Through these apps, teens can also benefit from driving tips based on their habits. When it comes to your premium rate, good driving habits can result in lower costs.

Good student

With most insurers, teens who maintain good grades qualify for discounts. Typically a B average is required. However, this may vary depending on your insurance carrier.

The discount percentage can also vary. For example, GEICO offers up to 15 percent off with its good student discount. In contrast, Progressive advertises that savings through its good student discounts average 10 percent.

Speaking from personal experience, Ruiz notes the dual benefits good student discounts can offer parents:

"It was a great incentive for my kids. To drive, they had to keep their grades up."

Drivers education

You can also find discounts for completing an approved drivers training. Some insurers offer discounts for drivers education classes. You can also find discounts for participating in a more specialized course like defensive driving. 

Typically, your insurer will have a list of approved courses. Once you provide documentation of completion, you can receive a discount. 

Mike Wall

Car Insurance Expert

 

 

Drivers education and insurance:

Insurers frequently offer a 5 to 10 percent discount to teen drivers who complete a Driver's Ed course. Some insurance companies have their own defensive driving program. Others will accept course completion documentation from your teen's high school or from an online program. To encourage participation, driver's education courses are frequently offered for free or at a low cost.