My teen got a driver’s permit, and all I got was a $4,000 car-insurance estimate

by user


I spent an afternoon recently researching how parents can deal with the sticker shock of adding a new teen driver to their car-insurance policy, and then took a break to walk the dog. At the end of our very quiet, nearly suburban block, we encountered an unfortunate accident, wherein a young woman with a sticker on her driver’s-side door that said “New driver — please be patient” had plowed her SUV into the rear end of a parked sedan for no discernible reason. 

Nobody really needs to tell you why insurance rates for new, young drivers are so high. Sure, an actuary can explain the risk-pool mechanics and a business analyst can explain the dynamics of market pricing. But you usually don’t need to go more than 20 feet from your own house before you encounter an example of idiocy, inexperience or just sheer bad luck, which is what makes adding a teen driver to your policy such a nightmare. 

That makes the bottom line clear and unwavering on insuring a teen driver: Your costs will double, at least, says Marc Friedlander, a representative of the Insurance Information Institute, a trade group. When I priced my own insurance with my current carrier after my eldest got his driving permit, the company’s app spit back an estimate that was about triple, topping $4,000 a year. 

Where to start shopping

While Friedlander says car insurance is the easiest insurance product to comparison shop online, that’s not actually saying much. About 80% of people start online when they shop for car insurance, but not all of them complete the transaction electronically because of how complicated it becomes. 

One of the biggest obstacles is that it’s hard to get even general pricing information without handing over a lot of personal data — including your contact information, which can later be sold to marketers. You want to look for a site like, or that will provide you the information you want and won’t spam you later. To connect with local brokers, and more of an in-person experience, you can search on

While many use the teen-driver milestone as the impetus to shop around, it’s really not the best way to keep your overall car-insurance costs low. “People don’t shop as much as they should,” says Evelyn Pimplaskar, editor in chief and director of content at “You should shop as often as your policy renews.” Of the 35% of Americans who shopped around in the last year, some 92% said they saved money by switching, according to an internal ValuePenguin survey done earlier this year. 

How to customize options to save

One of the main reasons this strategy works is that auto insurance is so variable — based on your state, your age, the kind of car you drive and even where you park. If you switch up just a few options, you can likely get a better rate than you’re currently paying to an insurer that is banking on your laziness. Rates can be even more variable based on your teen and how different insurance companies treat them. Some companies are particularly friendly to new or troubled drivers, while others offer programs that base pricing on driving metrics. which could benefit your teen — or not. 

To save, you have to ask about every possible discount, and that may mean getting a friendly agent on the phone to ask about the impact of good grades, certified driver-education courses, away-at-school pricing, bundling with home insurance or other cars, loyalty programs, safe-driving records and so on. 

“My bill is 40% less for taking discounts versus the initial premium,” says Friedlander.

To soften the blow of adding a teen, Pimplaskar’s family signed up for telematics pricing, which comes with an app that tracks their driving. “We didn’t have to download it on every driver. I’m a safe driver, my husband is a different story,” she says. They also bumped up their deductible from $500 to $1,000 to lower their premiums. 

One thing you probably don’t want to do is make your child get their own policy (although it’s up to you whether you make them chip in). “Typically, if a student/teen is added to a parent’s policy they can save around $160 a month, compared with starting a new policy on their own,” says Beth Swanson, a licensed property- and casualty-insurance agent and content manager for TheZebra. 

Updating gender issues

It’s still true that male teens are charged more than female teens, and not all insurers have options for nonbinary or transgender identification, let alone pricing. 

“Some insurers ask for sex at birth, some require gender to match your driver’s license, and others let you choose the gender you identify with,” says Divya Sangameshwar, an insurance expert at “For trans and nonbinary teens, shopping around can save them more than just money.”

ValuePenguin ran the costs of a typical policy by gender, including nonbinary, for ages 16 to 18 driving a 2015 Honda Civic, and the costs for nonbinary drivers were just slightly above that of female drivers. For transgender drivers, it would come down to how the insurance carrier priced the plan.


Monthly cost – male driver

Monthly cost – female driver

Monthly cost – nonbinary driver 













“Since gender is a rating factor, this will be something to watch in the future,” says Swanson. “Gender could possibly be eliminated as a rating factor, but it’s likely that, over time, data collection will help determine whether nonbinary drivers are a higher or lower risk based on claims ratios. Then this can be evaluated accordingly when carriers are providing quotes.”

One other future outlook: Teen pricing doesn’t last long. 

“One thing I wish somebody would have told me is that there’s a light at the end of the tunnel,” says Pimplaskar. “If your child is a good driver, some insurers will start to lower the rate by 21. And by 25, if your record is clean, your rates will come down. Parents won’t be paying forever.” 

More from Beth Pinsker


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