Auto Insurance
Adding a 16-Year-Old Driver Increases Auto Insurance Premiums by an Average of 158% Annually
While young drivers often can’t wait to get on the road, parents may not be too pleased by the costs — particularly related to their auto insurance. In fact, annual costs rise by an average of $3,252 when adding a 16-year-old driver.
We analyzed Quadrant Information Services insurance rate data for 45-year-old married male and female parents with clean records and good credit scores. Then, we looked at the cost of adding a 16-, 21- or 25-year-old to their parents' insurance. Here’s what we found.
On this page
- Key findings
- Adding a 16-year-old, 21-year-old or 25-year-old driver to auto insurance: Cost breakdown
- Adding a 16-year-old driver increases auto insurance costs by an average of 158%
- Costs still rise by an average of 105% when adding a 21-year-old driver
- Adding a 25-year-old driver is the most cost-effective
- Adding a child to your auto insurance: Top expert tips
- Methodology
Key findings
- It costs $2,731 more annually for a married couple to add a 16-year-old driver to their full-coverage auto policy than a 25-year-old driver. Adding a 16-year-old as the third driver on their policy results in an average annual auto insurance cost of $5,312. Annual car insurance premiums for married couples after adding a 21-year-old and 25-year-old to the policy average $4,212 and $2,581, respectively.
- When a married couple adds a 16-year-old to their auto insurance policy, the cost of full coverage increases by an average of 157.9%, or $3,252 a year. The average percentage change to add a 16-year-old to their parents’ policy is highest in Rhode Island (225.3% or $5,828), Wyoming (208.7% or $2,820) and Louisiana (200.5% or $4,966).
- Adding a 21-year-old to a married couple’s policy still doubles the annual cost of full coverage by an average of 104.5%, or $2,152. California has the highest average percentage increase to add a 21-year-old driver, at 191.4%, or $3,947. Meanwhile, Nevada has the fifth-highest percentage increase (140.9%) but the largest monetary increase ($4,291).
- If a married couple adds a 25-year-old to their insurance policy, the cost of full coverage jumps by an average of only 25.3% — or $521 — annually. Iowa (40.2%) and New Hampshire (40.0%) are the only states in which the cost of full coverage jumps by at least 40.0%. Again, the monetary difference is the highest in Nevada, at $1,004.
Adding a 16-year-old, 21-year-old or 25-year-old driver to auto insurance: Cost breakdown
Adding your child to your auto insurance policy can be costly, but it largely depends on the age of your new driver. While a newly licensed 16-year-old may be eager to hit the road, it may be unsurprising that adding a driver of this age is costly. In fact, an annual full-coverage auto insurance policy costs $5,312 on average for a married couple after adding a driver of this age.
Meanwhile, adding a 21-year-old or 25-year-old to a policy pushes annual costs to $4,212 and $2,581, respectively. That means it costs $2,731 more annually to add a 16-year-old driver to an auto policy than to add a 25-year-old driver.
Cost after adding young driver to parents’ insurance policy, by age
Age | Average annual insurance premiums after adding child |
|---|---|
| 16-year-old | $5,312 |
| 21-year-old | $4,212 |
| 25-year-old | $2,581 |
Source: ValuePenguin analysis of Quadrant Information Services insurance rate data. Note: Auto insurance rates are for 45-year-old married male and female parents with clean records and good credit scores.
Why are costs so much higher after adding a 16-year-old driver? According to ValuePenguin auto insurance expert Divya Sangameshwar, it boils down to risk.
"Insurance companies set rates based on the likelihood a driver will be involved in a crash resulting in a claim, and how severe that crash is likely to be," she says. "If a driver is more likely to crash or more prone to rash driving behaviors, the higher the insurer sets the premium because they face a greater risk of paying out a claim."
Teen drivers are more likely to underestimate dangerous situations or make critical errors that can lead to serious crashes. According to another ValuePenguin study on teen driver deaths, 1,400 teen drivers died in 2020.
When it comes to risks, the Centers for Disease Control and Prevention (CDC) found that 56% of teen drivers and passengers ages 16 to 19 who died in fatal car crashes in 2020 weren’t wearing seat belts. It also found that 29% of drivers ages 15 to 20 who were killed had been drinking, and 35% of male drivers and 18% of female drivers ages 15 to 20 involved in deadly wrecks were speeding. Additionally, 39% of high school drivers in 2019 admitted to texting or emailing while driving in the past 30 days.
Adding a 16-year-old driver increases auto insurance costs by an average of 158%
Breaking it down by age, adding a 16-year-old to a married couple’s auto insurance policy boosts costs from an annual average of $2,060 to $5,312. That’s an increase of $3,252 a year — or a 157.9% jump.
Where is adding a 16-year-old most costly? By percentage increase, those costs are highest in Rhode Island. Here, auto insurance costs jump 225.3% from an average of $2,587 to $8,415 — an additional $5,828 a year. It’s followed by Wyoming (208.7%) and Louisiana (200.5%).
States with biggest % increase when adding 16-year-old driver to auto insurance policy
Rank | State | Average annual cost, married couple | Average annual cost, married couple with 16-year-old | $ difference | % change |
|---|---|---|---|---|---|
| 1 | Rhode Island | $2,587 | $8,415 | $5,828 | 225.3% |
| 2 | Wyoming | $1,351 | $4,171 | $2,820 | 208.7% |
| 3 | Louisiana | $2,477 | $7,443 | $4,966 | 200.5% |
| 4 | New Jersey | $2,344 | $6,947 | $4,603 | 196.4% |
| 5 | Arizona | $2,612 | $7,649 | $5,037 | 192.8% |
Source: ValuePenguin analysis of Quadrant Information Services insurance rate data. Note: Auto insurance rates are for 45-year-old married male and female parents with clean records and good credit scores.
By cost increase, Rhode Island still ranks first. Texas jumps to second, with average annual auto insurance costs jumping $5,216 from $3,046 to $8,262. Nevada rounds out the top three, with costs increasing $5,180 from $3,045 to $8,225.
Still, Sangameshwar says parents who add a teen to their policy instead of getting a separate teen policy already save 62% on average.
"However, the cost of adding a teen driver to their policies will still raise their premiums significantly," she says. "Thankfully, there are many ways to manage these costs — starting with discounts that can lower premiums by as much as 40%. These include good grade discounts for students with a 3.0 or higher GPA, as well as discounts for teens who’ve taken a defensive driving class or had a telematics device installed to prove they’re safe drivers. Even low mileage discounts exist for teen drivers who don’t drive very often."
Full rankings
States with biggest/smallest % increase when adding 16-year-old driver to auto insurance policy
Rank | State | Average annual cost, married couple | Average annual cost, married couple with 16-year-old | $ difference | % change |
|---|---|---|---|---|---|
| 1 | Rhode Island | $2,587 | $8,415 | $5,828 | 225.3% |
| 2 | Wyoming | $1,351 | $4,171 | $2,820 | 208.7% |
| 3 | Louisiana | $2,477 | $7,443 | $4,966 | 200.5% |
| 4 | New Jersey | $2,344 | $6,947 | $4,603 | 196.4% |
| 5 | Arizona | $2,612 | $7,649 | $5,037 | 192.8% |
| 6 | New Hampshire | $1,080 | $3,145 | $2,065 | 191.2% |
| 7 | California | $2,062 | $5,975 | $3,913 | 189.8% |
| 7 | Maine | $1,058 | $3,066 | $2,008 | 189.8% |
| 9 | Kentucky | $2,693 | $7,714 | $5,021 | 186.4% |
| 10 | Utah | $2,244 | $6,301 | $4,057 | 180.8% |
| 11 | Vermont | $1,233 | $3,425 | $2,192 | 177.8% |
| 12 | Virginia | $1,700 | $4,674 | $2,974 | 174.9% |
Source: ValuePenguin analysis of Quadrant Information Services insurance rate data. Note: Auto insurance rates are for 45-year-old married male and female parents with clean records and good credit scores.
Costs still rise by an average of 105% when adding a 21-year-old driver
Adding a young driver who is 21 mitigates insurance hikes, but not by much. The annual cost of full-coverage auto insurance still more than doubles, increasing 104.5% from an average of $2,060 to $4,212 — a jump of $2,152.
Sangameshwar says parents will still see a significant cost increase because the same risk factors driving up a 16-year-old driver’s premiums are also at play for a 21-year-old driver.
"In fact, this is the age when young adults are often away at college and can legally drink alcohol, which adds another layer of risk for insurers," she says. "However, their rates are lower than a 16-year-old driver because they’ve already accrued some driving experience by this point. Parents looking for more savings can ask their 21-year-old college students to park their cars at home while they’re away at college, as that could shave a whopping 25% off their auto insurance bill with an ‘away at school’ discount."
Outside of costs, there are several pros and cons of having your college student on your auto insurance. Be sure to weigh your options carefully.
By state, those in California experience the highest average percentage increase. Adding a 21-year-old driver boosts the cost of insurance by an average of 191.4%, from $2,062 to $6,009, or $3,947. It’s followed by North Carolina (154.8%) and New Jersey (144.1%).
States with biggest % increase when adding 21-year-old driver to auto insurance policy
Rank | State | Average annual cost, married couple | Average annual cost, married couple with 21-year-old | $ difference | % change |
|---|---|---|---|---|---|
| 1 | California | $2,062 | $6,009 | $3,947 | 191.4% |
| 2 | North Carolina | $1,502 | $3,827 | $2,325 | 154.8% |
| 3 | New Jersey | $2,344 | $5,722 | $3,378 | 144.1% |
| 4 | Massachusetts | $1,753 | $4,267 | $2,514 | 143.4% |
| 5 | Nevada | $3,045 | $7,336 | $4,291 | 140.9% |
Source: ValuePenguin analysis of Quadrant Information Services insurance rate data. Note: Auto insurance rates are for 45-year-old married male and female parents with clean records and good credit scores.
By cost increase, Nevada ranks first, with auto insurance premiums jumping $4,291 from an average of $3,045 to $7,336. (Notably, Nevada has the fifth-highest percentage increase, with premiums rising by 140.9%.) California ($3,947 increase) falls to second here, while Arizona rounds out the top three with a $3,651 jump in auto insurance costs.
Full rankings
States with biggest/smallest % increase when adding 21-year-old driver to auto insurance policy
Rank | State | Average annual cost, married couple | Average annual cost, married couple with 21-year-old | $ difference | % change |
|---|---|---|---|---|---|
| 1 | California | $2,062 | $6,009 | $3,947 | 191.4% |
| 2 | North Carolina | $1,502 | $3,827 | $2,325 | 154.8% |
| 3 | New Jersey | $2,344 | $5,722 | $3,378 | 144.1% |
| 4 | Massachusetts | $1,753 | $4,267 | $2,514 | 143.4% |
| 5 | Nevada | $3,045 | $7,336 | $4,291 | 140.9% |
| 6 | Rhode Island | $2,587 | $6,210 | $3,623 | 140.0% |
| 7 | Arizona | $2,612 | $6,263 | $3,651 | 139.8% |
| 8 | Louisiana | $2,477 | $5,698 | $3,221 | 130.0% |
| 9 | Idaho | $1,429 | $3,210 | $1,781 | 124.6% |
| 10 | New Hampshire | $1,080 | $2,398 | $1,318 | 122.0% |
| 11 | Illinois | $2,177 | $4,785 | $2,608 | 119.8% |
| 12 | Texas | $3,046 | $6,660 | $3,614 | 118.6% |
Source: ValuePenguin analysis of Quadrant Information Services insurance rate data. Note: Auto insurance rates are for 45-year-old married male and female parents with clean records and good credit scores.
Adding a 25-year-old driver is the most cost-effective
Adding a 25-year-old to an insurance policy is the least pricey of our scenarios. When adding a driver of this age, the cost of full coverage rises just 25.3%, from an average of $2,060 to $2,581, or $521.
According to Sangameshwar, a large reason for this is real-world experience behind the wheel.
"A 25-year-old driver who got their driving license at 16 will have nearly 10 years of driving experience when they turn 25," she says. "However, not all 25-year-old drivers will see a huge drop in their rates. The key is demonstrating several years of safe driving. Twenty-five-year-old drivers who’ve gotten tickets or gotten into accidents will pay higher premiums because insurance companies still see them as risky. Gender, credit history and ZIP code can also affect how much a 25-year-old driver will pay for car insurance."
Only two states see the cost of full coverage jump by at least 40.0%: Iowa (40.2%), from $1,569 to $2,199, and New Hampshire (40.0%), from $1,080 to $1,512. Meanwhile, Louisiana (37.3%) ranks third.
States with biggest % increase when adding 25-year-old driver to auto insurance policy
Rank | State | Average annual cost, married couple | Average annual cost, married couple with 25-year-old | $ difference | % change |
|---|---|---|---|---|---|
| 1 | Iowa | $1,569 | $2,199 | $630 | 40.2% |
| 2 | New Hampshire | $1,080 | $1,512 | $432 | 40.0% |
| 3 | Louisiana | $2,477 | $3,402 | $925 | 37.3% |
| 4 | Arkansas | $2,154 | $2,938 | $784 | 36.4% |
| 5 | Oklahoma | $2,157 | $2,941 | $784 | 36.3% |
Source: ValuePenguin analysis of Quadrant Information Services insurance rate data. Note: Auto insurance rates are for 45-year-old married male and female parents with clean records and good credit scores.
As for the states with the highest cost jumps, Nevada again ranks first, with average insurance premiums rising $1,004 from $3,045 to $4,049. Louisiana follows, with costs rising $925 from $2,477 to $3,402. Texas ranks third, with annual auto insurance costs jumping $923 from $3,046 to $3,969.
Regardless of age, insurance costs jump the least in Hawaii
In which state is adding each driver the cheapest? Hawaii has the lowest percentage and cost increases when adding a driver. Regardless of age, adding a child to your insurance policy increases prices from $1,562 to $1,636. That’s only 4.7% (or $74) more annually. Hawaii restricts your age and credit score from impacting your auto insurance premium, which helps explain its ranking for each group.
By percentage increase, Michigan is the second-most affordable state for adding a 16-year-old (90.9%) and 21-year-old driver (65.0%) — though its high starting average of $3,456 means the auto insurance itself isn’t as affordable as it appears. Meanwhile, Alaska is the second-most affordable state for adding a 25-year-old driver (11.0%). Michigan isn’t far behind Alaska, though: It ranks third for adding a 25-year-old child to the policy, at 11.2%.
By cost increase, Vermont is the second-most affordable state after adding a 21-year-old and 25-year-old, with costs rising $1,186 and $146, respectively. (It also ranks fourth when adding a 16-year-old driver, with costs increasing by $2,192.)
Full rankings
States with biggest/smallest % increase when adding 25-year-old driver to auto insurance policy
Rank | State | Average annual cost, married couple | Average annual cost, married couple with 25-year-old | $ difference | % change |
|---|---|---|---|---|---|
| 1 | Iowa | $1,569 | $2,199 | $630 | 40.2% |
| 2 | New Hampshire | $1,080 | $1,512 | $432 | 40.0% |
| 3 | Louisiana | $2,477 | $3,402 | $925 | 37.3% |
| 4 | Arkansas | $2,154 | $2,938 | $784 | 36.4% |
| 5 | Oklahoma | $2,157 | $2,941 | $784 | 36.3% |
| 6 | California | $2,062 | $2,762 | $700 | 33.9% |
| 7 | New Jersey | $2,344 | $3,123 | $779 | 33.2% |
| 8 | Nevada | $3,045 | $4,049 | $1,004 | 33.0% |
| 9 | Wisconsin | $1,484 | $1,966 | $482 | 32.5% |
| 10 | Oregon | $2,127 | $2,809 | $682 | 32.1% |
| 10 | Tennessee | $1,743 | $2,303 | $560 | 32.1% |
| 12 | Rhode Island | $2,587 | $3,406 | $819 | 31.7% |
Source: ValuePenguin analysis of Quadrant Information Services insurance rate data. Note: Auto insurance rates are for 45-year-old married male and female parents with clean records and good credit scores.
Adding a child to your auto insurance: Top expert tips
Although you may find some freedom in your schedule when your child gets their driver’s license, those insurance hikes may mean your financial freedom has been restricted. To help mitigate these insurance increases, Sangameshwar recommends the following:
- Consider whether it's a good idea to ask your child to wait until they graduate college or even turn 25 before they get a driver’s license. "Not having a new licensed driver on your policy will help you save thousands of dollars in the short term," she says. "However, it’s important to note that insurers look at years of driving experience when setting rates, not age alone. So, a 25-year-old new driver may pay as much as or even more than a 16-year-old-driver would — and that could just delay the financial burden." Ultimately, far more factors play into this decision than cost, so you’ll want to consider what’s best for your family.
- Keep an eye on your child’s driving habits. "It’s also helpful for you to be near your children to help them navigate their early years as a driver and teach them safe driving habits young," Sangameshwar says. "Twenty-one or 25-year-olds — who may be living away from their parents — won’t benefit as much from their parents’ advice and guidance on safe driving."
- Talk to your teens about car insurance. "This includes educating teens about how much car insurance costs, what it does and doesn’t cover, what they should do if they get into an accident, how to file a claim, how to shop around for a policy and how much it’ll cost them in the future when they’re independent and living on their own," she says. "These are valuable life lessons that’ll help young drivers see the value of being safe. It’ll also help them better manage their finances in the future."
Methodology
ValuePenguin researchers gathered about 4 million insurance quotes for a 2015 Honda Civic EX driven by a married man and woman who are both 45 and have good credit scores and clean records. We then included a 16-, 21- and 25-year-old child in their insurance policy. This study shows the average annual cost of a full-coverage insurance policy across ZIP codes in 50 states and the District of Columbia.
ValuePenguin’s analysis used insurance rate data from Quadrant Information Services. These rates were publicly sourced from insurer filings and should be used for comparative purposes only, as your quotes may be different. Full-coverage policies include coverage limits above minimum requirements.
Full-coverage policy
Coverage | Limits |
|---|---|
| Bodily injury (BI) liability | $50,000 per person, $100,000 per accident |
| Property damage | $25,000 per accident |
| Uninsured or underinsured motorist BI | $50,000 per person, $100,000 per accident |
| Comprehensive and collision | $500 deductible |
| Personal injury protection | Minimum (when required by state) |