Question of the Day: What's the average annual car insurance rates for a 16 year-old driver with their own policy?

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Sep 18, 2018
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Insurance, Question of the Day, Budgeting, Research

Answer: $6,930

Questions:

  • Why do you think that 16 year olds have such high car insurance premiums? 
  • What other factors, other than age, do you think that car insurance companies take into account when setting premiums? 
  • If you currently drive and have your own insurance or are on your parent's/guardian's policy, do you know what the cost is? 

Click here for the ready-to-go slides for this Question of the Day that you can use in your classroom.

Behind the numbers (carinsurance.com): 

Newly licensed drivers are expensive to insure. They are inexperienced, naturally, and have a high rate of accidents. Auto insurance companies view that as risky. Hence, they charge new, teen drivers much higher rates.

The average car insurance rate for a 16-year-old who has his or her own policy is as follows, per year:

  • State minimum coverage: $2,593
  • Liability limits of 50/100/50: $2,957
  • Full coverage: $6,930

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Looking for other insurance resources to share with your students? Check out the NGPF Insurance Unit page for more ideas. 

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.