It’s because of their limited driving experience that insurers see them as high risk drivers. So, getting your 16-year-old insured is expensive. But there are ways to lower the cost and we’ll explore them all in this article. Keep reading! (To explore affordable teen driver coverage and discounts, contact Insure on the Spot at 773-202-5060.)
How Much Does It Cost to Insure a 16-Year-Old?
16-year-olds have some of the highest accident rates of any age group, which is why companies charge more to cover them. If you’re adding a newly licensed 16-year-old to an existing policy, your premium could rise by 100% or more. One analysis found that a typical full coverage policy costing about $2,492 annually more than doubles to $5,744 per year with a 16-year-old added. In Illinois specifically, adding a 16-year-old driver to a parent’s policy costs about $5,275 per year on average for full coverage, compared to roughly $2,400 without a teen.
If a teen driver gets their own policy, the cost is even higher. A standalone full-coverage policy for a 16-year-old averages around $7,000–$9,000 per year in the U.S.. In other words, a separate policy for your teen could cost roughly 50–100% more than simply adding them to your family’s plan. Additionally, gender can play a role as well. Historically, male teens tend to face slightly higher premiums than females, since statistics show young males have more accidents. However, no matter the scenario, expect insurance for a 16-year-old to be several times the cost of insurance for an experienced adult driver.
What’s the Cheapest Way to Insure a 16-Year-Old?
The cheapest way to insure a 16-year-old is to add them to an existing auto insurance policy. Nearly every state (including Illinois) requires a teen with a driver’s license to be insured, and most insurers will ask that you list any licensed teenager in your household on your policy. Instead of setting up a costly separate policy, you simply inform your insurance company and have your 16-year-old added as a covered driver on your current plan.
The Illinois Department of Insurance advises that being added to a parent’s policy is the easiest and most affordable option for new teen drivers. By adding your teen to your family policy, they benefit from the coverage limits and discounts you’ve already established as an experienced driver (and they take advantage of multi-car or multi-driver rates). In contrast, a standalone policy for a teen has none of those advantages – the teen is essentially rated as a high-risk primary driver, which comes with a very high premium.
How to Add Your Teen to Your Existing Auto Insurance Policy?
Usually, you should notify your insurer as soon as your 16-year-old is licensed. Many companies require that all licensed household members be either insured or explicitly excluded. Some insurers even let you add a teenager when they only have a learner’s permit (coverage often kicks in fully once they are licensed). Check with your provider about their specific rules. But generally, do not delay adding your teen driver. If your 16-year-old will be driving the family cars, they need to be listed on the policy to ensure any accident would be covered. If you fail to inform your insurer about a new driver in the household, your claims could be denied.
When you add a teen to your policy, you’ll need to provide their personal details (name, date of birth, license number) and possibly information about any vehicle the teen will primarily drive. In some cases, if your teen has their own car, the car might need to be listed on the policy as well (with a parent or guardian as co-owner on the title, since minors typically cannot hold an insurance contract alone). The insurer will then recalculate your premium with the young driver included. While you should brace for a significant jump in cost, remember it’s still far cheaper than the alternative of your teen getting a separate policy. For example, adding a 16-year-old to a parent’s plan might raise the total annual premium to around $4,000–$5,000, whereas their own plan could be $7,000+. Simply put, bundling the teen with your existing policy saves money.
Are there any situations where a separate policy makes sense? In most cases, no. But there are a few edge cases. If the family’s primary vehicle is a very expensive car (for instance, a luxury car or high-performance sports car), you might not want a high-risk teen listed on that vehicle’s policy, as it could drastically increase rates for that car. In that scenario, some parents purchase an older, inexpensive used car for the teen and insure that vehicle separately under the teen (with a parent as co-signer). By isolating the risk to a cheap car, you protect your luxury car’s policy from the teen’s risk factor.
However, this approach still usually costs more overall than adding the teen to an existing multi-car policy, and not all insurers will write a policy in the teen’s name alone (since 16-year-olds are minors). If you’re considering this route, discuss it with an insurance agent to weigh the costs.
How Can You Save Money on Teen Car Insurance?
Insurance companies offer a variety of discounts and rating options that can soften the blow of a teen driver on your policy. Here are some effective strategies to save money when insuring your 16-year-old:
Add Your Teen to an Existing Policy (Instead of a New Policy)
As discussed, keeping your 16-year-old on a family policy is the first and biggest money-saver. If you were to insure them on a brand-new separate policy, you’d lose out on the benefits of your established coverage. By adding them to an existing policy, you leverage your own driving history, multi-car discounts, and any bundling deals you have. This approach alone can save hundreds or thousands of dollars per year compared to the alternative. Additionally, some insurers offer a “family plan” discount or lower rates for youthful drivers if they’re on a parent’s policy versus alone. Always get a quote for adding the teen to your current plan before you even consider a standalone policy.
Insure Them on a Safe, Modest Vehicle
The car your teen drives will heavily influence the insurance cost. To keep premiums down, have your 16-year-old drive a safe, low-profile vehicle. Generally, we recommend insuring your teen on a reliable used car with good safety features and a modest engine (think along the lines of a midsize sedan or an older compact SUV with high safety ratings). High-performance sports cars or large SUVs will be substantially more expensive to insure, especially with a teen driver at the wheel.
Powerful engines often equate to higher risk (in insurers’ eyes, a 16-year-old in a sports car might be tempted to speed). Likewise, vehicles with lower safety ratings or very high repair costs can drive premiums up. Before purchasing a car for your teen, consider getting insurance quotes for that specific model. Often, a slightly older car with modern safety tech (like airbags, anti-lock brakes, stability control) can be much cheaper to insure than a brand-new car or a performance-focused model. Plus, if the car is of lower value, you may have the option to skip certain coverages (like collision or comprehensive) to save money.
Take Advantage of Good Student Discounts
If your 16-year-old is a good student, make sure your insurer knows it. Almost all major insurance companies offer a Good Student Discount for young drivers who maintain strong grades in school. Typically, this discount applies to full-time high school or college students under age 25 who achieve a “B” average or higher (often defined as a 3.0 GPA or better). The savings can be quite significant. For example, State Farm advertises up to a 25% discount for students with good grades (available through age 25). Many other insurers offer similar incentives.
For instance, GEICO offers around 15% off for good students, and Allstate, Progressive, and others have their own versions of this discount. Typically, the student needs to provide proof (such as a report card or transcript) each policy term to show they meet the grade requirement. If your teen is home-schooled, some insurers allow alternative proofs like standardized test scores. It only takes a little paperwork to get this discount, and it can knock a substantial chunk off that hefty premium.
Complete Driver Training or Safety Courses
Another way to save is by having your teen complete an approved driver’s education or safe driving course. Many insurers reward young drivers who go beyond the basic driver’s license requirements and take additional training. For instance, some companies offer a discount if the teen has completed a state-approved driver’s ed program or defensive driving class. The idea is that extra training makes a teen a safer driver, which lowers risk.
Check with your insurer what programs might qualify. You’ll see that often an accredited driving school, online teen safety course, or even the completion of certain programs (like State Farm’s Steer Clear program for young drivers) can result in a discount. The savings might not be huge by itself (perhaps on the order of 5–10%), but every bit helps. More importantly, these courses instill good habits that could prevent accidents (which will save far more money in the long run by avoiding claims and surcharges). Some insurers also have teen monitoring programs (for example, apps that provide educational driving lessons or mentoring for new drivers) that might lead to lower rates once completed.
Use Telematics or Safe-Driving Apps
Telematics programs are an increasingly popular way to save money on car insurance for all drivers. A telematics program typically involves installing a small device in the vehicle or using a smartphone app that monitors driving behavior. It can track things like speed, braking habits, acceleration, time of day driven, and phone usage while driving. Insurers use this data to assess how safely your teen is driving. If your 16-year-old drives carefully (e.g. obeys speed limits, avoids hard braking, doesn’t use the phone, and generally drives at safer times of day), you could earn substantial discounts based on the telematics feedback.
Many insurers offer an initial discount just for enrolling in a telematics program. For example, some companies give around 5-10% off upfront – and then additional savings at renewal if the driving data looks good. Programs like Progressive’s Snapshot®, Allstate’s Drivewise®, State Farm’s Drive Safe & Save™, or GEICO’s DriveEasy all aim to reward safe driving habits. For a teen, this can also be a learning tool. The feedback can highlight if they are braking too hard or driving late at night, and parents can coach them on improving those habits. Keep in mind, a few insurers might also raise rates if the data shows risky driving (like frequent hard stops or speeding), so discuss with your agent how a given telematics program works.
Limit Your Teen’s Driving (Occasional Driver Status)
When you add a 16-year-old to your policy, the insurer will usually classify them either as a primary (principal) driver or an occasional driver on a vehicle. A principal driver is the person who drives a specific car most of the time (generally over 50% of the usage), whereas an occasional or secondary driver is someone who uses the car less frequently (often under 25% of the time). If possible, you want your teen classified as an occasional driver, because the rates for an occasional teenage driver are lower than for a teen who is the main driver of a vehicle.
How can you ensure this? One way is to share vehicles within the family rather than giving your 16-year-old unrestricted access to their own car. For example, if the household has two cars and two parents, you might decide that the teen will mostly drive one of the family cars occasionally rather than having a dedicated car. You would then list your teen as an occasional driver on that family car (with a parent still as the principal driver). This signals to the insurer that the 16-year-old isn’t the primary operator, which can reduce the premium. Not all insurers have a formal “occasional driver” category, but they do ask for estimated annual mileage or usage percentages for each driver-vehicle pair. Be truthful about usage and don’t claim your kid never drives if they actually drive daily.
Additionally, if your teen only drives under supervision (common for a learner’s permit) or only drives when home from boarding school or college, ask your insurer about the “student away at school” discount.
Bundle Policies and Ask About Multi-Car Discounts
Take advantage of any bundling opportunities and multi-vehicle discounts. Insuring your teenager’s car on the same policy as your car means you now have a multi-car policy, which most insurers reward with a lower rate per vehicle. Likewise, if you have your home or renters insurance with the same company that insures your cars, you might get a bundling discount.
These savings aren’t specific to teen drivers, but when you’re facing a large premium increase, every discount helps. When adding your 16-year-old, double-check with your agent that you’re getting all multi-policy or multi-car discounts you’re eligible for. Sometimes simply having the teen’s car and your car on one combined policy triggers a discount automatically. If your current insurer’s rates for adding a teen still seem too high, this is also a smart time to shop around and compare bundled quotes from other companies. Some insurers are much more teen-driver-friendly than others, so another company might offer a better package deal for your family.
Adjust Coverage and Deductibles for Savings
Finally, review your coverage choices with an eye for savings. One common strategy is to increase your deductibles on collision and comprehensive coverage. By choosing a higher deductible (the amount you pay out of pocket if you file a claim), your monthly premiums go down. If you trust your teen to drive carefully (or if the car they drive isn’t very expensive), you might be comfortable with, say, a $1,000 deductible instead of $500, which can save some money. Another consideration: if your 16-year-old will be driving an older car that isn’t worth much, you might consider dropping collision and comprehensive coverage on that vehicle entirely.
Liability insurance is mandatory to cover damage your teen might cause to others, but collision/comprehensive on a low-value car might not be cost-effective (the Illinois Department of Insurance notes that for older cars, the premiums for full coverage can exceed the car’s value). For example, if your teen is driving a 15-year-old car worth only $3,000, paying for full coverage might not be worthwhile – you could opt for liability-only coverage which is much cheaper. However, be cautious: if the car is newer or you can’t afford to replace it out-of-pocket after an accident, you’ll want to keep collision and comprehensive. Also, don’t skimp on liability coverage for your teen driver. Given their higher risk, it’s wise to carry higher liability limits to protect your family’s finances (we discuss this more below in coverage needs).
What Car Insurance Coverage Does a 16-Year-Old Need?
In Illinois (as in most states), the law mandates minimum liability insurance on any vehicle. The minimum liability limits in Illinois are 25/50/20 (which means at least $25,000 bodily injury coverage per person, $50,000 per accident, and $20,000 property damage coverage). Similar requirements exist in other states (limits vary, but liability insurance is mandatory almost everywhere). So at a minimum, your 16-year-old must be covered for liability to others. If they cause an accident, the insurance will pay for the injuries and property damage they are liable for, up to those limits.
However, carrying only the minimum is often not enough for a teen driver. Since parents can be held liable for a minor child’s accidents (under “vicarious liability” in some cases), it’s wise to have a comfortable cushion of liability coverage. Many families opt for liability limits like 50/100/50 or 100/300/100 (meaning $100k per person, $300k per accident for injuries, etc.) when adding a teen driver. Higher limits do increase the premium, but given the increased risk, it’s a worthwhile investment for peace of mind. You might also consider an umbrella insurance policy if you want an extra layer of liability protection beyond your auto policy. Umbrella policies can cover large claims once auto limits are exhausted, and they can be relatively affordable per amount of coverage.
Beyond liability, you need to decide on collision and comprehensive coverage for the vehicle your 16-year-old will drive. Collision coverage pays for damage to your own vehicle from crashes, and comprehensive covers non-collision events like theft, fire, or hail. These coverages are optional (unless required by a car loan or lease), but if your teen will be driving a car of significant value, it’s wise to include them. For example, if your teenager will drive the family’s 2018 SUV or you bought them a decent used car worth $10,000, you should probably carry collision and comp on that vehicle. This ensures that if the teen crashes or the car is vandalized, the repair or replacement cost is covered (minus your deductible). On the other hand, as mentioned above, if the car is very old or low-value, you might skip these coverages to save money, accepting that you’ll pay for any repairs yourself.
Also consider Uninsured/Underinsured Motorist (UM/UIM) coverage, which is often included or required in states like Illinois. This protects your teen if they are hit by a driver who has no insurance or not enough insurance. Young drivers are statistically more likely to be involved in accidents in general – including being the victim of someone else’s mistake – so UM/UIM coverage is important for their protection.
Finally, also think about some add-ons, like Medical Payments (MedPay) coverage. This one can help with medical bills for your teen or their passengers if they’re hurt, regardless of fault. Also, Roadside Assistance might be useful for a new driver who might run into a dead battery or flat tire. And if the car is newer, Collision Deductible Waiver or Accident Forgiveness (if offered) might provide some relief for that inevitable first fender-bender.
Get an Affordable Rate for Your 16-Year-Old Driver
Insuring your 16-year-old may feel daunting due to the costs, but with the right approach you can keep premiums manageable while maintaining good coverage. Remember to capitalize on all available discounts (good student, driver training, etc.) and make smart choices about vehicles and coverage levels. Also, don’t hesitate to shop around because rates for teen drivers can vary wildly between insurance companies, so comparing quotes can uncover big savings.
At Insure on the Spot, we specialize in helping Chicago-area families find affordable car insurance for drivers of all ages, including new teen drivers. We can guide you through the process of adding your 16-year-old to your policy, advise you on coverage options, and ensure you’re getting every discount you qualify for. Our goal is to help you protect your young driver without breaking the bank.
Need a personalized quote or more tips for insuring a teen driver? Our agents are ready to assist. Call us today at 773-202-5060 or visit our website to get a fast, free quote for your 16-year-old driver. With a bit of planning and the right coverage, you can hit the road with confidence knowing your teen is properly insured at a price your family can afford.
Frequently Asked Questions
Q: What’s the cheapest way to insure a 16-year-old?
A: The cheapest way to insure a 16-year-old is usually to add them to an existing auto insurance policy (such as a parent’s policy) rather than getting a separate policy. Adding a teen to a family plan takes advantage of the multi-car discounts and the parent’s driving record, making it far more affordable. By contrast, a standalone policy for a 16-year-old will be extremely expensive due to their high-risk status.
Q: Can I add a teen driver to my current car insurance policy?
A: Yes, in fact you should add your teen driver to your current policy as soon as they get their license. Nearly all insurers allow and encourage this. Simply contact your insurance company and provide your 16-year-old’s information to list them as a driver on the policy. Adding a teen will raise your premium, but it’s usually required once they are licensed (and it keeps them legally insured). This approach is also more cost-effective than the teen having an independent policy. By adding them, your teen will be covered to drive any of the vehicles on your policy, and you’ll only have to manage one combined policy for the household.
Q: How much does car insurance cost for a first-time driver?
A: Insurance for a first-time 16-year-old driver is quite high. If added to a parent’s policy, you can expect the overall premium to roughly double in many cases. For example, a policy that cost $2,500 per year could jump to $5,000+ with a teen added. On average, parents see about a 130% increase in their annual rate when a 16-year-old is included. If a teen gets a policy on their own, the cost is even higher – often in the range of $6,000 to $9,000 per year for full coverage, depending on the state and insurer. Keep in mind these are general estimates. Actual rates vary based on factors like your location, the vehicle, the coverages you choose, and your family’s driving record. It’s wise to compare quotes from multiple insurers to find the best price for a new driver. With discounts and safe driving, you can work on bringing that cost down over time, but the first year with a 16-year-old driver will likely be the most expensive.