Your 16th birthday is a big milestone. There’s your driver’s license, your newfound freedom, and open roads.
Next, most households have to pay insurance premiums.
“It’s very tiring,” said S. Bowers, an Illinois-based project manager who recently purchased auto insurance for his 17-year-old son. “I got several quotes, mostly online, and many were much higher than I expected. I think it took me about a month to figure out what was the best course of action.”
Insuring a teen driver can add hundreds or even thousands of dollars to your annual auto insurance costs, depending on where you live and the structure of your insurance, according to a new Bankrate analysis.
The average cost of a full-coverage policy for a 16-year-old on their parent’s policy was $5,740 a year in November 2025, an increase of nearly $700 from the same period in 2023, according to Bankrate data. To put these high costs into perspective, we found that new teenage drivers pay, on average, at least $450 more per year in insurance premiums than drivers with past speeding tickets, accidents, or DUI convictions.
Experts say insurance companies charge the highest car insurance premiums to parents of teen drivers, largely because they are less experienced on the road and more likely to be involved in an accident. But that’s not the end.
There may be another, less obvious reason why insurance companies are increasing car insurance premiums even more for many families. Experts say it’s becoming increasingly common for insurance companies to calculate premiums in a way that disadvantages new drivers, especially teenagers.
“Some insurance companies explicitly assign the most expensive drivers (often teenagers) to the most expensive vehicles unless instructed otherwise,” said Loretta Waters, vice president of the Insurance Information Institute (Triple I), a nonprofit educational insurance organization. Price and safety ratings greatly influence a teen’s insurance premiums, so when given a choice, families typically assign their teens the cheapest and safest car to insure, according to Waters.
But insurance companies are increasingly grading teens on the car that potentially pays the most premiums, rather than the car they drive most often.
Insurance companies justify this as a way to better reflect actual claims patterns, since teens are covered on all vehicles listed on their policies. At the same time, it can be frustrating for parents because even if family rules and driving restrictions (such as who drives which car) are taken seriously in the household, they are less likely to be reflected in the price.
This change makes it more important than ever for families to ask and talk to their insurance companies about how their teen drivers are being rated and which vehicles are driving up their premiums.
Currently, it costs more than $5,700 a year to insure a new teenage driver.
Auto insurance prices have been rising in recent years, according to Bankrate’s ongoing analysis of insurance rates. When a family adds a teen driver to their insurance, the costs go up even more, and teen drivers can quickly become one of the biggest car insurance premium increases.
There are several reasons why costs have risen, but experts say the biggest factor is inflation.
Insurance experts say car repairs and replacements are becoming more expensive, dangerous driving is getting worse and medical costs associated with accidents continue to rise. These costs add up for insurance companies and ultimately translate into higher premiums for consumers.
According to insurance data from Bankrate, the average interest rate on full-coverage auto insurance for a married couple is $2,515. Our data shows that when a couple adds a 16-year-old child to their policy, their premiums jump by an average of $3,225 per year, more than doubling the cost.
And those premiums are only going to go up. If there’s a silver lining, it’s that the cost of insuring teen drivers doesn’t outpace premium increases for other types of drivers. Over the past three years, insurance premiums for teen drivers have increased by nearly $700. This equates to approximately 14% without adjusting for inflation. This is roughly in line with the nominal pace of average car insurance premiums overall and average car insurance premiums for married couples, which increased by 16% and 15%, respectively, between 2023 and 2025.
Why is car insurance so expensive for teen drivers?
As a parent, you may be wondering why it’s so expensive to insure your teen driver. After all, you spent hours in the passenger seat while they practiced. They use turn signals, know when to give way, and can probably recite the rules of the road better than you at this point.
None of this is for nothing, but insurance experts say that knowing how to drive and having the experience to deal with unpredictable situations on the road are not the same. Experience builds judgment, impulse control, and an understanding of cause and effect, but that only comes from years of real-world driving, not just practice driving. This lack of experience creates uncertainty, and in insurance, uncertainty leads to increased risk.
“Simply put, when you add teenagers to your insurance policy, you’re not just adding a new driver, you’re adding one of the highest-risk types of drivers,” Holman said. According to Triple-I data, drivers ages 16 to 19 drive the lowest average annual miles of any age group, yet are involved in nearly three times as many fatal car crashes per mile as adult drivers.
It costs more to insure a new teenage driver than a dangerous driver who has committed a violation.
A trucking company’s ability to quantify and assess risk is also the reason why experienced drivers who cause violations or accidents on the road have lower insurance premiums than teenage drivers.
Teenage drivers are essentially a blank slate when it comes to insurance. With no driving history to assess, insurers are forced to rely on systemic risk, the patterns observed in millions of young drivers collectively.
“For teenagers, the risk is future and systemic, rather than behavioral, and data consistently shows that the first few years behind the wheel are the most dangerous,” Hallman said.
Adult drivers, on the other hand, are evaluated partly on the basis of behavioral risk. Their past driving record provides specific information to insurance companies about how they are likely to behave behind the wheel, even after dangerous driving behavior. Car insurance premiums are more personalized based on your actual history.
Because insurance companies have little individualized data on teen drivers, parents’ premiums tend to skyrocket. An analysis by Bankrate found that new teenage drivers pay an average of at least $450 more per year in insurance premiums than drivers with a history of speeding, accidents, or DUI convictions. For a 16-year-old on their parent’s insurance, the difference in average premiums compared to a speeding or at-fault driver is much larger – more than $1,800 per year.
*Full coverage insurance rates are as of November 2025.
What families can and can’t do to lower insurance premiums for teen drivers
Parents may not realize that there are some aspects of auto insurance pricing that are out of their control. One of these could be the way insurance companies allocate risk to insurance contracts. Some insurance companies have adopted a driver-vehicle assignment model. This means that each driver is rated primarily based on the car they drive most often.
While it’s important for parents to be honest with insurance companies about what car their teen drives and how often they use it, families can potentially save money by choosing an older, more reliable car, one that doesn’t require full coverage, rather than giving their child a newer or more expensive car.
Other airlines have taken a more household-based evaluation approach and are less focused on who drives which cars each day. In a household-based model, insurers assume that any driver may be behind the wheel of any vehicle. When it comes to pricing, that often means evaluating insurance as if the most dangerous drivers, such as newly licensed teens, were driving the most expensive cars. Even if your teen rarely drives the car, that assumption alone could send their insurance premiums skyrocketing.
This is one area where asking questions can help significantly and potentially save you money. Parents can check with their insurance company to find out if drivers are assigned to specific vehicles or if insurance is assessed at the household level. Understanding which rating models airlines use can explain why certain cars are more expensive to insure.
More ways to save money on your teen’s car insurance
Even if a teen driver is careful and does everything right, their insurance premiums are likely to be higher until they turn 25, at which point trucking companies in most states no longer consider them a young driver.
Besides shopping around and comparing quotes, there are steps you and your teen driver can take to offset some of the increase. One option is to delay getting a driver’s license until your child is a little older, but that conversation isn’t always easy. According to Bank Rate data, couples with 18-year-old drivers pay an average of $4,941 a year for car insurance. That could be a savings of $799 per year compared to a 16-year-old driver on his parents’ insurance.
Other options include maintaining a 3.0 GPA to qualify for a generous student discount or taking additional driver training courses, which some insurance companies reward with teen safety discounts.
Also keep in mind that the car you choose for your teen can be important, both in terms of risk and coverage selection. Luxury cars, especially those with powerful engines or expensive technology, tend to cost more to insure than mid-range cars.
Choosing a car was part of the conversation Bowers and Freddie Jr. had before getting the car.
“Ideally, Freddie would have wanted a Challenger Scat Pack, but that just wasn’t practical. He just wanted something he could drive himself, he didn’t want a small car. He’s 6 feet tall, so we were like, ‘Hey, why don’t we put him in a small car?'” In the end, they bought a 2014 Nissan Pathfinder from his grandmother, who was already planning on getting rid of the car.
One thing to keep in mind is that there are some changes that are out of your control. Once the insurance company realizes that your child has a license, they will be forced to have car insurance whether or not you allow them to drive. Typically, the only way to remove a teen driver is to show the carrier proof that the driver is listed on another policy or have the license returned to the state.
“I don’t have any other children, so I wasn’t prepared for how high the estimate would be,” Bowers said. “In my head I was thinking, ‘Oh, it won’t be that bad,’ but now I have to pay $150 for each (insurance). It’s all up to me.”