Skip to content

Car Insurance for Teenagers in US

July 20, 2013

Cost of car insurance for teenagers in US

Car insurance for teenagers is expensive. It costs almost twice to five times as much to insure a teenage driver than the national average. This is because teen drivers are considered ‘high risk’.

In the US, the average rate of car insurance for teenagers was $2,741 in the year 2010. The average rate of car insurance for teenagers depend on several factors, with varying levels of importance placed on each factor by the insurance provider.

Must car insurance be obtained?

Yes, it is compulsory to obtain car insurance for a teenager from the time the teen starts using a family car or a car especially bought for the teen, whether or not the teen is still a learner or has already gotten his license.

Car insurance options in US

Liability coverage

Liability coverage or third party insurance coverage is required by a teen driver in most countries, including for every state in the US and Australia and in the UK. Usually, a teen driver must expressly be added to the insurance policy if relying on a car used within the household.

Other options

It is preferable for a teen driver to be covered under a comprehensive car insurance for teenagers. This is because many teen drivers are involved in accidents (sometimes very serious accidents) due to their inexperience. A comprehensive coverage is therefore desirable and usually represents a more cost effective approach than merely insuring for third party liability.

For the US, various other car insurance options are available:

  • collision
  • comprehensive
  • medical/personal injury
  • uninsured/underinsured motorist
  • loan/lease payoff
  • towing and labor.

Collision insurance

Collision insurance covers the cost of repair to the teen driver’s car in a collision. Liability only coverage will apply only to the cost of damage to any vehicles or persons apart from the teen driver’s car. Collision insurance coverage is highly recommended for teen drivers.

Comprehensive insurance

Comprehensive insurance coverage covers all damage to the car due to any cause, including damage from weather, theft or animal collision. Comprehensive insurance is desirable if you can afford the insurance premium.

Medical/personal injury insurance

Insurance covering the cost of treatment for personal injuries of the teen driver and his or her passengers. Recommended for those with health plans that are inadequate or those that do not have any health plan.

Uninsured or underinsured motorist insurance

Insurance to cover damage caused by underinsured or uninsured motorists.

Loan or lease payoff insurance

Also known as gap insurance, loan or lease payoff insurance is intended for those who are paying off a loan on the car involved in the accident. This insurance covers the cost of the outstanding loan amount on the car due to the creditor.

Towing and labor insurance

Also known as roadside assistance coverage. Covers vehicle breakdowns related to mechanical failures, flat tires and gas outages.