A 16th birthday is a major milestone. There’s the driver’s license, the newfound freedom, the open road.
Then, for most families, comes the insurance bill.
“It was exhausting,” said S. Bowers, an Ilinois-based project manager mom who recently shopped for car insurance for her 17-year-old son. “I got several quotes, mostly online and a lot of them were much higher than I expected. I would say it took about a good month to figure out what the best course of action was.”
Adding a teen driver to a policy can increase your annual car insurance costs by hundreds, sometimes thousands, of dollars, depending on where you live and how your policy is structured, according to a new Bankrate analysis.
The average rate for full coverage insurance for a 16-year-old on their parents’ policy is $5,740 a year as of November 2025, a nearly $700 increase since the same time in 2023, Bankrate’s data shows. To put those higher costs in perspective, we found that new teen drivers cost at least $450 more per year to insure, on average, than drivers with past speeding tickets, accidents or DUI convictions.
Experts say insurers charge parents’ of teen drivers some of the highest auto insurance rates primarily because they have less experience on the road and are more likely to get involved in crashes. But that’s not the end of it.
There may be another, less obvious reason why insurers are pushing car insurance premiums even higher for many families. Experts say it’s becoming increasingly common for insurers to calculate premiums in a way that especially disadvantages new teen drivers.
“Some insurers explicitly assign the most expensive driver [often the teen] to the costliest vehicle unless directed otherwise,” said Loretta Worters, vice president at the Insurance Information Institute (III), a non-profit educational insurance organization. When given the choice, families typically assign teens to the least expensive, safest car on the policy because price and safety ratings significantly affect teen premiums, according to Worters.
But insurers are increasingly rating teens on the vehicle that carries the highest potential cost of claims, not necessarily the one they drive the most often.
Insurers justify this as a way to better reflect actual claim patterns, since teens will be insured for all listed vehicles on the policy. At the same time, it can feel frustrating for parents, because it reduces how much household rules or driving restrictions — like who is supposed to drive which car — factor into the rate, even when those rules are taken seriously at home.
That shift makes it more important than ever for families to ask questions and talk with their insurer about how their teen driver is being rated and which vehicle is driving up the cost on their policy.
It now costs over $5,700 a year to insure a new teen driver
Auto insurance prices have been rising for years, according to Bankrate’s ongoing analysis of insurance rates. Costs jump even higher when families add teen drivers to their policies, with teens quickly triggering some of the largest auto insurance premium increases.
Auto insurance rates have been growing for several reasons, with inflation as the main driver.
Cars are more expensive to repair and replace, dangerous driving has worsened and medical costs tied to accidents continue to climb, according to insurance experts. Those costs add up for insurers and ultimately show up as higher premiums for consumers.
The average going rate for full coverage car insurance for a married couple is $2,515, according to Bankrate’s insurance data. Once that married couple adds a 16-year-old to their policy, their rate jumps by $3,225 per year on average, more than doubling their costs, our data shows.
And those premium costs are only rising. The silver lining, if there is one, is that the cost of insuring a teen driver isn’t outpacing cost increases for other types of drivers. Over the past three years, teen driver insurance rates rose nearly $700, or roughly 14% when not adjusted for inflation. That tracks closely with the nominal pace of overall average auto premiums and average auto premiums for married couples, which increased 16% and 15% between 2023 and 2025, respectively.
Why is teen driver auto insurance so much more expensive?
As a parent, you may be scratching your head, wondering why it’s so expensive to insure your teen driver. After all, you’ve spent hours in the passenger seat while they practice. They use their turn signal, they know when to yield and can probably recite the rules of the road better than you can at this point.
While none of that is wasted, insurance experts say knowing how to drive isn’t the same as having the experience to handle unpredictable situations on the road. Experience builds judgment, impulse control and an understanding of cause and effect that only comes from years of real-world driving, not just practice runs. That lack of experience creates uncertainty, and in insurance, uncertainty translates to higher risk.
“In simple terms: Adding a teen to your policy doesn’t just add another driver, it adds the riskiest kind of driver,” Holeman said. Drivers between ages 16 and 19 average the lowest annual mileage of all age groups, but they are involved in fatal car crashes nearly three times as often as adult drivers, on a per-mile basis, according to III data.
Teen drivers are more likely to be involved in serious crashes even when they’re trying to do everything right. Insurance reflects the cost of those crashes, not the teen’s intentions.— Scott Holeman, director at the Insurance Information Institute
It costs more to insure new teen drivers than risky drivers with violations
A carrier’s ability to quantify and evaluate risk is also why more experienced drivers with moving violations or accidents can still cost less to insure than teens.
Teen drivers are essentially a blank slate when it comes to insurance. With no driving history to evaluate, insurers have to rely on systemic risk, patterns they observe across millions of young drivers as a group.
“With teens, the risk is prospective and systemic rather than behavioral, and the data consistently show that the first years behind the wheel are the most dangerous,” Holeman said.
On the other hand, adult drivers are rated, in part, on behavioral risk. Their past driving record gives insurers concrete information about how they’re likely to behave behind the wheel, even after high-risk driving activity. Car insurance rates are more individualized when based on actual history.
Because insurers have little individualized data on teen drivers, premiums tend to jump sharply. Bankrate’s analysis found that new teen drivers cost at least $450 more per year, on average, than drivers with prior speeding tickets, accidents or DUI convictions. For a 16-year-old on a parent’s policy, the average premium difference compared with a driver who has a speeding ticket or at-fault accident is significantly higher, exceeding $1,800 per year.
*Rates for full coverage insurance as of November 2025
Because adding a teen driver can increase a family’s premium by roughly 50% to 100% or more, many families are comparing quotes from multiple carriers and adjusting liability limits or deductibles to manage costs.— Loretta Worters, vice president at the Insurance Information Institute
What families can — and can’t — do to lower teen driver insurance costs
Parents may not realize that there are some parts of car insurance pricing they simply can’t control, and one of them can be how a carrier assigns risk on a policy. Some insurance companies use a driver-vehicle assignment model, which means each driver is rated primarily on the car they drive the most often.
While it’s important for parents to be honest with their insurer about which vehicle their teen drives and how often they use it, families may be able to save money by choosing an older, reliable vehicle for their child — one that doesn’t require full coverage — rather than giving them a new or high-value car.
Other carriers take a more household-based rating approach, where they don’t focus as much on who drives which car day-to-day. Under a household-based model, insurers assume any driver could be behind the wheel of any vehicle. For pricing, that often means rating the policy as if the riskiest driver, such as your newly licensed teen, is driving the most expensive car. That assumption alone can cause premiums to jump, even if your teen rarely drives that particular car.
This is one area where asking questions can significantly help and potentially save you money. Parents can check with their insurer to see whether drivers are assigned to specific vehicles or if their policy is rated at the household level. Understanding which rating model your carrier uses can explain why certain cars are driving higher costs on your policy.
Additional ways to save money on your teen’s car insurance
Even if your teen driver is cautious and doing everything right, they are likely to have higher insurance rates until age 25, when carriers in most states no longer consider them youthful operators.
Other than shopping around and comparing quotes, there are steps you and your teen driver can take to help offset some of the increase. One option is delaying a driver’s license until your child is a little older, though that conversation isn’t always an easy one. Bankrate data shows that a married couple with an 18 year-old driver pay an average of $4,941 per year for auto insurance — a potential annual savings of $799 when compared to a 16-year-old driver on their parents’ policy.
Other options teens may be more open to include maintaining a 3.0 GPA to qualify for a good student discount or taking an additional driver training course, which some insurers reward with teen safety discounts.
Teen driver discounts are not one-size-fits all. Availability varies widely by state and insurance company. A quick call to your insurance agent could uncover savings tied to grades, training or carrier-specific safe-driving programs.
Also, keep in mind that the car you choose for your teen can matter, both in terms of risk and coverage selection. Luxury vehicles, especially those with powerful engines or expensive technology, tend to carry higher insurance costs than mid-range vehicles.
Vehicle selection was part of the conversation Bowers and Freddie Jr. had before getting his car.
“Ideally, Freddie wanted a Challenger Scat Pack” Bowers said, “but that wasn’t realistic. He just wanted something that he could drive, and he did not want a small car. He’s 6 ft — so he’s like, ‘Please don’t put me in a little bitty car.’” In the end, they purchased a 2014 Nissan Pathfinder from his grandmother, who had already planned to give up her car.
One thing to keep in mind is that there are some changes you can’t control. Once your insurance company is aware that your child is licensed, they will be forced onto your auto policy, whether you allow them to drive or not. Typically, the only way to remove a teen driver is to show your carrier proof that they are listed on a different policy or have them surrender their license back to the state.
“I don’t have other children, so I wasn’t prepared for how high the quotes would be,” Bowers said. “I had it in my head, ‘Oh, it’s not gonna be that bad,’ and then I have to pay $150 for one [policy]. It’s all [the costs] on me.”
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