The Teen Tax: Young Drivers Add 90% More to Parents’ Car Insurance Costs | Insurify

Earning a driver's license is a milestone moment, but for young drivers or their parents, it comes with a hefty price tag.

Parents adding teen drivers to their car insurance policy pay 90% more than they would without a teen on their policy. It comes out to an extra $3,435 per year, according to Insurify data.

Still, it's less expensive than insuring a teen on their own policy, since young drivers can benefit from their parents' policy discounts and stronger credit. The average annual cost of full-coverage insurance for teen drivers on their own policy is $4,514. It costs 24% less to add a young driver to their parents' policy than to insure them on a separate policy, saving about $1,079 per year.

It all comes down to risk. Experience and incident record are among the most significant factors influencing a driver's insurance rates. Young drivers have less experience and are more likely to be involved in an accident, which could result in an expensive claim; insurers price that risk accordingly.1

Key findings

Maryland, Washington, D.C., and New York are the most expensive places for car insurance for teens, whether on their own policy or on a family policy, according to Insurify data.For teen drivers with an accident on their record, it's still cheaper to join a family policy than buy a separate one. The average teen driver would save $1,435 per year on their parents' policy.Young drivers aged 15 to 20 make up only 5.1% of licensed drivers, but in 2023, they accounted for 11% of all drivers involved in injury crashes and 9.1% of all drivers involved in fatal crashes, according to the National Highway Traffic Safety Administration (NHTSA).2Teen drivers with their own car insurance policy pay an average of $4,514 per year, nearly double the national average of $2,310 per year for full coverage.

The most expensive states for teen car insurance

The states where young drivers face the highest car insurance costs are also the states with the most expensive car insurance rates across the board, according to Insurify's auto insurance report. Since young drivers' lack of experience presents a higher road risk, states that already have higher claims risk from factors like coverage requirements, vehicle theft, and traffic accidents also have higher rates for teens.

The national average cost of car insurance is $2,310 per year, according to Insurify data. Teens joining their parents' policies pay an annual average of $3,435 for full coverage, almost 50% more than the national average rate. But, in some states, young drivers have to pay nearly double that amount for insurance protection.

1. Maryland

Average annual cost for a teen driver on their parents' policy: $6,086Average annual cost for a teen driver and two parents: $12,876Average annual cost for two parents: $6,789State average annual cost: $4,093

Maryland is the most expensive state for car insurance for teen drivers on their own and on their parents' policy, according to Insurify data. Elevated crime rates and new standard auto coverages likely contribute to those higher premiums.

In the first half of 2025, Maryland had the seventh-highest vehicle theft rate in the country, according to the National Insurance Crime Bureau (NICB).3 Maryland also saw a 9.7% increase in traffic fatalities from 2022 to 2023, while nationwide, fatalities decreased by 4.3%, according to the NHTSA. Factors like these can increase insurance costs for all drivers, including teen drivers who already see higher costs.

In July 2024, Maryland began requiring insurers to provide enhanced uninsured motorist coverage for new policies.4 While drivers can opt out, the state mandates that insurers automatically include it in new policies. Since it can increase the claims payout following an incident with an uninsured or underinsured motorist, insurers likely adjusted rates to accommodate that increased financial risk.

Teens have a higher accident risk, so new coverage limits that increase claims costs could affect teen drivers' insurance rates even more.

2. Washington, D.C.

Average annual cost for a teen driver on their parents' policy: $5,621Average annual cost for a teen driver and two parents: $11,891Average annual cost for two parents: $6,270State average annual cost: $3,780

Motor vehicle theft likely influences overall auto insurance costs in the capital, which can also elevate costs for teen drivers. Washington, D.C., had the highest vehicle theft rate in the country in the first half of 2025, more than double the No. 2 spot on the list, per the NICB.

D.C.'s expensive rates are also due to it being a largely urban area — these typically pose a higher crash risk. In 2023, the motor vehicle traffic fatality rate was around the national average, but fatalities increased by 38% from 2022 to 2023, according to the NHTSA.5 Since teen drivers already have an elevated crash risk, the higher accident rates in D.C. aggravate that risk.

D.C. auto insurers also didn't make a profit that year, according to the National Association of Insurance Commissioners (NAIC).6 Factors that lead to insurer losses can cause insurance rates to spike over time, as companies increase premiums to cover those losses.

3. New York

Average annual cost for a teen driver on their parents' policy: $5,538Average annual cost for a teen driver and two parents: $11,715Average annual cost for two parents: $6,177State average annual cost: $3,724

New York is a no-fault state, which means drivers file bodily injury claims with their own insurance company, regardless of who caused an accident. This kind of system is especially vulnerable to insurance fraud, such as staged accidents and excessive medical billing, which can increase insurance premiums for all drivers.7

Since teen drivers are more likely to be involved in vehicle crashes than older drivers and would be filing a claim with their own insurer regardless of fault, they'll face higher insurance costs.

The population density and crowded streets of New York City also contribute to the state's high average premiums, since drivers there face much higher accident risk than in rural areas. The state also has a moderate traffic fatality rate in crashes involving young drivers, according to the NHTSA.

4. Delaware

Average annual cost for a teen driver on their parents' policy: $5,005Average annual cost for a teen driver and two parents: $10,589Average annual cost for two parents: $5,584State average annual cost: $3,366

Rates have climbed high enough in Delaware that state legislators are taking a closer look. In July, the General Assembly created a task force to reform auto insurance, curb costs, and standardize the cost of medical care after accidents, according to Delaware Public Media.8

Right now, Delaware doesn't cap the amount of compensation that crash victims can sue for in civil lawsuits, like personal injury cases, according to the Center for Justice and Democracy at New York Law School.9

Delaware has an above-average traffic fatality rate, according to the NHTSA. Litigation costs related to serious accidents can raise claims costs for insurers, which trickle down to policyholders' pockets. Teen drivers' higher risk of being involved in traffic crashes could mean insurers face expensive payouts for injury claims, which can push premiums up.

5. Rhode Island

Average annual cost for a teen driver on their parents' policy: $4,953Average annual cost for a teen driver and two parents: $10,579Average annual cost for two parents: $5,525State average annual cost: $3,331

Rhode Island saw a 37% increase in traffic fatalities from 2022 to 2023, according to the NHTSA. Like New York, Rhode Island has a moderate traffic fatality rate in crashes involving young drivers, according to the NHTSA.

The state also has the highest car accident repair costs, at $1,987 per person, according to a Dolman Law Group study.10 In Hawaii, it's just $410 per person. Higher accident severity, coupled with expensive repair costs, can significantly increase insurer claims costs, leading to higher premiums for policyholders across the small, coastal state.

Since teen drivers have a higher likelihood of being involved in an accident, the costs of expensive vehicle repairs can increase insurer claims payouts.

State legislators are also considering several bills that some members of the insurance industry are concerned will lead to even higher premiums.

How much it costs to insure a teen driver on their own policy

It's more expensive to insure a teen driver on their own policy versus on a policy with their parents. Daniel Lucas, senior carrier partnerships manager at Insurify, said that's likely due to a handful of reasons.

"If a young driver is on their parents' plan, they are likely benefiting from multi-vehicle discounts, homeowner discounts, and not being the primary driver of a vehicle," he said. "Parents also likely have stronger credit and, hopefully, years without any incidents or violations."

Teen drivers save about 24% if they buy insurance on their parents' policy versus a separate one. The average annual car insurance premium for teen drivers on their parents' policy is $3,435, a whole $1,079 less per year than the $4,514 it costs to buy coverage through their own policy.

"If a teen driver is on their own policy, they are the primary driver, meaning insurers consider them the only driver and thus driving more frequently," Lucas said. "It's also likely they won't qualify for the same discounts. I guess there could be a teen that is married, owns a home, and has great credit … but statistically not that many."

Here's how full-coverage car insurance costs vary by state for teens on their own policy versus on their parents' policy.

How dangerous driving affects teen car insurance rates

Driving record and experience are often the most significant individual factors affecting car insurance rates. Since young drivers have less experience and an unproven record, insurers consider them higher-risk drivers. Traffic safety data backs that up.

"Besides the obvious, that more experience usually equals a more skilled driver, insurance companies spend millions analyzing data points that are indicators of risk, good or bad," Lucas said. "They have the data to prove beyond a doubt that those with a poor driving record are more likely to continue having a poor record in the future, or that an inexperienced teen driver has a statistically higher chance of being involved in a collision."

Young drivers have much higher rates of involvement in traffic crashes. Drivers ages 15 to 20 make up 5.1% of licensed drivers, but in 2023, they accounted for 11% of drivers involved in injury crashes, 10.6% of drivers involved in single-vehicle crashes, and 8.3% of drivers involved in multi-vehicle crashes, according to the NHTSA.

Though these drivers are underage, alcohol is also a factor. In 2023, 30% of young drivers killed in accidents had a blood alcohol content (BAC) of 0.01% or higher, and 26% had a BAC of 0.08% or higher.

Gender factors into risk with young drivers, too. The 2023 fatal crash rate for young men was almost three times the rate for young women. That shows up in insurance rates: Male teen drivers pay about 3.5% more for car insurance than female teen drivers, according to Insurify data.

Teen drivers already pay higher rates because they have little experience and represent a higher claims risk. The average annual car insurance premium for teen drivers is nearly double the national average, according to Insurify data.

If young drivers add an incident to their record, insurance costs spike even higher. For teens on their own policy, a speeding ticket adds 20% more, increasing to an annual average of $5,412.

An at-fault accident adds 33% more, jumping to an average of $6,004 per year. Young drivers with an accident on their record can still save by joining their parents' policy, paying $4,569 per year on average and saving around $1,435.

Here's how full-coverage car insurance costs vary by state for teens with an incident on their record on their own policy versus on their parents' policy.

Tips: How to save money on teen car insurance

Teen drivers' lack of experience means they'll pay more for car insurance, but they still have many strategies for limiting those costs.

Young drivers can take responsibility for lowering their rates by attending a driver training program and maintaining a high GPA, since many insurers offer good student discounts. Parents can save on their policy by taking advantage of bundling discounts and homeowner discounts and by maintaining a strong credit history.

Carefully reviewing coverage can also help families with a teen driver save money. Shopping around and comparing rates, adjusting deductibles, and dropping coverage when appropriate can lower insurance premiums. Listing teen drivers on older, less valuable vehicles that are cheaper to repair can also reduce rates by lowering potential claims costs.

Safety, more than anything, is the name of the game. Limiting vehicle use and starting slow with teens can help ensure they become cautious drivers. Every state has adopted graduated licensing laws that help ease teens into driving, allowing them time to develop safe driving habits.11

Methodology

Insurify's data scientists examined more than 97 million rates in its proprietary database, quoted via integrations with partnering insurance companies. Driver applications originate from all 50 states and Washington, D.C., and include information on the exact coverage specifications of each driver's quoted policies. Insurify excluded Alaska data due to lower quoting volume.

The premiums for young drivers in this report reflect the average cost of full-coverage car insurance for drivers between the ages of 16 and 19 with clean driving records and average or better credit, unless otherwise noted. The premiums for parents in this report reflect the average insurance cost for drivers ages 40–60 who are married, have clean driving records, and have average or better credit.

Premiums correspond to full-coverage policies with bodily injury limits between state-minimum requirements and $50,000 per person, $100,000 per accident; property damage coverage between $10,000 and $50,000; and comprehensive and collision coverage with deductibles of $1,000.