How much does car insurance cost for a teen or learner's permit driver, and which companies offer the cheapest rates?

Teen and permit drivers must carry the same state-minimum coverage as any licensed driver, and their rates drop as they age. Adding a teen to a parent's or guardian's existing policy is usually the cheapest route because it picks up bundling and multi-car discounts. Per IIHS, teen crash rates per mile driven are nearly four times those of drivers 20 and older, which drives the higher premiums. Rate analyses identify Erie, Auto-Owners, USAA (military-affiliated only), and Geico as low-cost options for teens.

The cheapest route is adding a teen to a parents' car insurance policy, though rates increase whether the teen is listed as a driver or the teen's vehicle is added, according to the Maryland Insurance Administration. Standalone policies for a new teen driver can cost several thousand dollars a year, and some companies will not sell them to drivers under 18. Common discounts include a good student discount (3.0 GPA or B average, with transcript proof usually every six months), a defensive driver discount, and telematics programs.

There is no state-set rate; teen and permit-driver premiums vary by insurer, vehicle, and location. In most cases you add the driver to a parent's or guardian's policy, which costs less than a separate policy. Some insurers cover a permitted driver automatically until the full license, while others charge from the first day of the permit. Rates run high for teens because their crash rate per mile driven is nearly four times that of drivers 20 and older, per the Insurance Institute for Highway Safety.