A Parent's Guide to Insurance for Teen Drivers

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How much does your insurance go up when you add a teenage driver?

Adding a teenage driver to your policy raises your rates. But you can control how much they climb. Teens are expensive, but rarely are they more expensive than when they start to drive. On average, your insurance rate will increase 130% after you add a teen to your policy, costing an extra $2,000 yearly.

There’s a reason teenagers cost more to insure. New drivers are among the most dangerous on the road and have a higher rate of accidents and file more claims compared to the average driver.

How to add a teenage driver to your policy

Fortunately, there are steps you can take to ensure your teen has sufficient coverage and you’re paying the least you have to for it.

insuring teen drivers table
Check

The best time to begin the insurance process is before your teen driver gets a learner’s permit. Find out from your insurer what the cost will be to add your teen once licensed

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Adding a teen driver to your policy will almost always be significantly cheaper than the teen having coverage through his or her own policy

Check Typically, your policy will automatically cover your teen at no cost while driving with a learner’s permit, but check with your insurance company to be certain
Check Once your teen is licensed, you need to contact your insurance company and let them know your child needs coverage, and have the teen added to your policy
Check If possible, add your teen driver as a primary driver for the cheapest car listed on your policy, which will save money
Check Compare car insurance rates from at least three companies, as the rates insurers charge for adding a teen can vary by a huge amount. That means your current insurer may not have the lowest price once your teen is on your policy
Check Be sure to ask for discounts to mitigate the cost, for example for students who earn good grades, students who live away from home, drivers who complete a defensive driving course, discounts for low-mileage and multiple cars
Check Other state-required provisions or disclosures
Check Any contingencies the deal is subject to

Decide how much coverage you need

Getting full coverage for your teen means you’d buy a policy with the following limits:

  • $100,000 in liability to pay for injuries to others; up to $300,000 per accident
  • $100,000 to pay for damage to other vehicles and property
  • Comprehensive coverage to pay for theft of the vehicle you own
  • Collision to pay for damage to the vehicle you own

While it may be tempting to remove comprehensive and collision from older vehicles to save some money, you could be shaving valuable coverage.

As always, when adding a teen driver to your policy, understand that if your child is in an accident, it’s the parents’ assets at risk in the event of a liability claim (savings, investments, certain retirement accounts, home equity, and future income are all at risk).

What’s the best car for teen drivers?

One of the most difficult aspects of adding a teen driver can be choosing the best car for your teen. You want the car to be safe, which typically means 2014 models and newer, as these come with safety features such as electronic stability control.

In terms of the cheapest models to insure, opt for economic models.

Compare rates to get the cheapest car insurance for your teen driver

To get the best rate, shop your coverage. Each insurance provider has different rates for each policy profile and adding a teen driver changes that profile. That means your existing carrier may not have the lowest price for you anymore.

When shopping for coverage, have a specific vehicle in mind, do some research, and have a year and VIN available to get the most accurate rate.

Should a teen get his own policy or go on a parent’s policy?

Putting a teen on his own policy is almost always more expensive than adding him to your existing insurance. However, sometimes families decide a separate policy is the best way to go. Here’s what to keep in mind:
 

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You're still liable for your child's accidents if under age 18

When you sign for your teen’s license, most states assign you the responsibility for your child as a driver. For example, in Kentucky, the application for drivers under age 18 must be signed by a parent or guardian who agrees he/she is jointly liable with the applicant for any damages

You'll still have to sign the policy

Depending on your state’s laws, those between ages 18 and 21, cannot sign binding contracts. That means to buy a car and an insurance policy, which is a binding contract, your teen will likely need a parent to sign with him on the paperwork

When a separate teen policy makes sense Getting your teen his own policy is typically only a good idea if he has already racked up tickets or has been in accidents and is raising the rates on your family policy. Then, it may be time to get him an older car with just liability on his own policy

How to save on teen car insurance

There's no way to avoid a rate increase once your teen hits your policy but there are ways to limit the pain.

save on teen insurance table
Good student discount

Most insurers offer a good-student discount to teens that have at least a B average. Requirements can vary so contact your insurer for details, but typically this discount is up to 20%

Defensive driving course

Teaching a teen how to deal with dangerous situations safely will hopefully result in fewer accidents and insurers will usually reward this type of training with a discount. Check with your insurer to see if they offer this discount and a listing of approved courses. The discount will vary but expect around 10%

Safety features save money Putting your teen in a car loaded with safety features will usually result in a discount, as long as it’s not a sports car. Features that may result in a discount include anti-theft devices, anti-lock breaks (ABS), adaptive cruise control, lane departure warning and collision preparation systems. Ask your insurer what safety features will garner a discount
Headed to college discount If your teen is old enough to head off to college, not taking a car with them, and will be living more than 100 miles from home, you should get a break on your auto insurance. That’s because the teen isn’t a regular driver, but still can drive it when he comes home on break. Notify your insurer when they head off to school and ask for a price adjustment.
Eventually, getting a good-driver discount A clean driving record can result in a lower rate. If your teen manages to stay ticket and accident free for three years, he or she may qualify for a good driver discount that can save up to 25%

Apps for monitoring teen drivers, the first year is the most dangerous

There’s light at the end of the tunnel, each year your teen stays accident and ticket free should result in a slightly lower rate than the year before and some insurers offer monitoring apps to help you keep tabs on your teen and lower your premium.

The first year is always the most dangerous with teen drivers and experience is better than age when it comes to accident statistics.

A great way to keep your teen safe and possibly save a bit of money is to monitor them. Several insurance companies offer monitoring devices that keep an eye on your teen’s driving behavior. This may mean sending you a notification if your teen does something he or she isn’t supposed to do, providing the teen with verbal feedback, or blocking all text and email messages.