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Why Cheap Car Insurance for Teen Drivers Isn't Always Enough

Updated: April 2016

Your teen just received his license, and he's ready to hit the road. You've likely reviewed safe-driving habits with him before handing over the keys to the family vehicle — but have you thought about car insurance?

It's no secret that insuring a teen driver can raise your insurance rates. Typically, car insurance for teen drivers may be more costly because of the high risk of accidents young drivers face on the road. So, if you're looking to save some money as you add your high-schooler to your policy, it's smart to understand your options.

Teen driving a car.

Lowering or Eliminating Coverage May Cost You More

Commonly suggested methods to help save money on car insurance include decreasing coverage limits, eliminating optional coverage or increasing deductibles. But, this could leave your teen driver underinsured. Or you could end up paying more out of pocket if your teen is involved in an accident. Here are some important factors and risks to take into account:

  1. Minimum liability limits may not be enough to cover injuries to another person or damage to their property. Almost every state requires drivers to purchase a minimum amount of liability coverage. However, the Insurance Information Institute (III) suggests purchasing more than the state requirement. Consider this: What if your teen driver injures someone or damages their property and the other person's costs exceed your policy's limits? You may end up having to pay the difference out of pocket, says the III.
  2. Opting out of coverage could leave you paying out of pocket for damage to the family vehicle. Depending on the vehicle your teen is driving, certain types of coverage may be optional on the family car insurance policy. For example, collision coverage likely isn't required if the family vehicle is paid off and titled in your name. But, what if your teen strikes another vehicle or object while driving the family car? Without collision coverage, you'd likely be responsible for the costs of repairing your vehicle.
  3. Increasing deductibles may mean paying more up front for a covered claim. Increasing your deductibles may lower your car insurance premium, but keep in mind that you'll pay more out of pocket if your teen is involved in an accident and you make a covered car insurance claim. For example, say your deductible is $1,000. If your teen driver were in an accident that cost $5,000, you'll need to pay the first $1,000 in order for your insurance to kick in and help cover the remaining $4,000, depending on the claim.

Finally, before you make adjustments to the family car insurance policy, take a look at some of the 2013 statistics from the Centers for Disease Control and Prevention (CDC). The information you find may just be enough to make you rethink wanting to find rock-bottom, cheap insurance for your teen driver.

  • Drivers ages 16-19 are three times more likely to crash their cars than older drivers, according to the CDC.
  • Teen drivers were found to be at fault for 28 to 30 percent of all crash-related injuries.
  • Recently licensed teenage drivers are at a far greater risk of being involved in an accident within the first year of taking to the road, the CDC says.

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Other Ways to Help Save Money on Car Insurance for Teen Drivers

You can effectively cut down on the cost of insuring your teenage driver without exposing yourself to the high repair costs and medical bills that could come as a result of not having enough insurance. Here are some suggestions:

  1. Consider adding teen drivers to your pre-existing auto insurance policy. Insuring a teenage driver separately may cost you a lot more money than it would to add them to a family policy, according to the III.
  2. If you're giving or buying your teen driver a car, pick a car with lots of safety features. Your premium depends in part on a number of factors including safety features, such as anti-theft devices, anti-lock brakes and side- and front-impact airbags, according to the III. Talk to your agent about how the car will affect your rates to help you make an informed decision.
  3. Encourage good grades. Teenage drivers who maintain good grades may be able to take advantage of auto insurance discounts as high as 20 percent. What better way to reward your teenager for getting good grades than by giving them the privilege of driving?

Saving money may be important to you, especially when it comes to car insurance. However, it’s possible to find ways to help reduce the cost of car insurance for your teen driver without lowering or eliminating coverage. If you have more questions, contact your local agent.


Savings and coverage subject to terms, conditions and availability. Savings will vary. Allstate Insurance Company, Allstate Indemnity Company, Allstate Property and Casualty Insurance Company, Allstate Fire and Casualty Insurance Company, Allstate New Jersey Insurance Company, Allstate New Jersey Property and Casualty Insurance Company, Northbrook, IL. © 2011 Allstate Insurance Company.
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