The availability of abortion provides insurance against unwanted pregnancies since abortion is the only birth control method which allows women to avoid an unwanted birth once they are pregnant. Restrictive state abortion policies, which increase the cost of obtaining an abortion, may increase women's incentive to alter their pregnancy avoidance behavior, thereby reducing the likelihood of unwanted pregnancies. This study, using state-level data for the years 1982, 1992, and 2000, examines the impact of restrictive state abortion laws on teen pregnancy rates. The empirical results indicate that the price of an abortion, Medicaid funding restrictions, and informed consent laws reduce teen, minor teen and non-minor teen pregnancy rates. The empirical results suggest that these abortion policy restrictions affect the unprotected sexual activity of teens resulting in fewer unwanted teen pregnancies.