Insurance

Insurance head to head: Teen versus teen

Who will pay more for auto insurance?

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If you’ve followed along on our Insurance Head to Head series in the past (see some of our previous entries), you know that we like to compare two made-up people to see who would pay less for car insurance.

How do we know who would pay less? We use data we’ve compiled from thousands of insurance applicants to estimate how different rating factors affect the amount a person might be quoted. 

Today we’re comparing two people that are part of a group that has some of the highest insurance rates in the country (to the tune of an average rate of $4,796 a year!)  That’s right, they’re teenagers. Because teenagers are new to driving, insurance carriers charge significantly more to insure them. It makes sense; after all, they don’t have much driving experience or history to demonstrate they know what they’re doing.

However, not all teens are created equal, so let’s compare our contestants and see who will get a better (or at least, less worse) rate.

Meet the contestants

Madison

Madison lives in Hawaii and just turned 16. She loves surfing, hiking and building up a following on her YouTube channel where she makes K-Pop themed baked goods. However, what she’s most excited about is getting her drivers license, especially since, thanks to her mom, she’s now the proud owner of a 2017 Dodge Caravan. So far, in the 3 months she’s been driving, she’s already had one speeding ticket because she didn’t see that school zone sign. 

Ryan

Ryan just turned 19, and he calls Louisiana home. He works as a shift manager (after a recent promotion from bag boy) at the local Piggly Wiggly. In his spare time, he enjoys driving around with his friends in his 2017 Jeep Cherokee while consuming copious amounts of french fries and Red Bull. He’s been driving since he was 16, and his only violation was running a stop sign once right after he got his license a little over three years ago. 

 

But first…a word on rating factors!

A rating factor is an individual characteristic of a customer used to price car insurance premiums. Put simply, the less risky your rating factors are, the cheaper your car insurance policy will be. Interestingly they often have nothing to do with your driving record and everything to do with who you are and where you drive. 

Now let’s see how our competitors’ rating factors compare.

Round #1: Location

In every state in the U.S., teens pay the most for car insurance. However, not all states see as big a jump based on age. Who do you think will pay more for their insurance: Madison in Hawaii or Ryan in Louisiana?

Madison wins this round! When it comes to driving as a teen, being a Hawaiian has its perks. Residents of Hawaii see the smallest change in annual premiums over their lifetime. The average 16-19 year old pays around $1,128 a year for car insurance in the Aloha State. 

The opposite is true in Louisiana. While the state has some of the most expensive car insurance in the nation, the jump for teens is enormous. The average rate for 16-19 year olds is over $10,000! And that number reduces by nearly two-thirds on a driver’s 20th birthday. (Hang in there, Ryan!)

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Round #2: Age

Although teens will pay the most for car insurance, the amount will change with every candle on the birthday cake. Independent of location, you can probably guess who will pay more between 16-year-old Madison and 19-year-old Ryan, but can you guess by how much?

Surprising no one, Ryan would pay less for car insurance. Again, we’re not taking location into account here, but just considering national averages. The average 16-year-old in the U.S. pays $6,034 for car insurance, but by 19 that number has dropped nearly in half to $3,391.

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Round #3: Ride

Both Madison and Ryan are lucky to be driving their own wheels, thanks to Madison’s generous mother and Ryan’s sweet Piggly Wiggly savings. They also both are rocking five-year-old vehicles. Which will likely cost more to insure: Madison’s Dodge or Ryan’s Jeep?

Ryan wins this round! Older vehicles are usually cheaper to insure than brand new vehicles. Comparing the average cost of insuring the make’s of different vehicles, Jeep is on the cheaper side compared to Dodge.

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Round #4: Violations

Madison and Ryan both have short driving histories by virtue of being new drivers (one of the reasons teens pay so much more for insurance). Who do you think will see a bigger increase in their car insurance from their small violations: Madison for speeding in a school zone or Ryan for running that stop sign?

Ryan wins this round! This is a bit of a trick question though. Speeding in a school zone leads to an average 20.6% increase in car insurance rates, compared to a 21.3% bump for running a stop sign. So why does Ryan win? His violation occurred more than three years ago, and in the state of Louisiana, that means it’s no longer on his driving record and will not affect his insurance rates.

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The Winner

In the real world, you can’t isolate just one rating factor as we’ve done here. Insurance companies look at each person as a whole and compile all their ratings factors together to determine the overall risk they might pose and decide how much they should pay. 

However, we do have one way to find out a winner. We ran each of our contestants through The Zebra’s easy-to-use car insurance comparison platform to find the best rates that the top insurance companies would offer to each. Drum roll please!

The winner is Madison! While Ryan won three out of four rounds with his slightly cheaper vehicle and big savings for being an elder teen, it’s just no match for the huge impact his location has on his rates. 

If you’re curious why your location has such a big impact on your rates, even if you’re a great driver like young Ryan, check out our recent Risk Pool article.

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If you’re a teen or have one on your policy, you know car insurance can be a financial strain.  Here are some ideas for saving money on teen car insurance

Want to see how you stack up against Madison and Ryan? Compare rates today to see how much you could be paying for car insurance.

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Susan MeyerSenior Editorial Manager

Susan is a licensed insurance agent and has worked as a writer and editor for over 10 years across a number of industries. She has worked at The Zebra a year. She currently specializes in producing research-focused content for The Zebra's Resource Center on topics related to auto and home insurance, personal finance and smarter living in the 21st century.

Susan's work has been cited by the Insurance Information Institute, State Farm, BuzzfeedCBS, Yahoo, Entrepreneur and Business Insider.