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Many parents worry about adding their teenager to their auto insurance policy. As teens approach age 16, they embark on drivers ed, getting a learner's permit, those precarious first few driving lessons and, finally, getting their driver's license. And, if they plan to drive a car regularly, they'll need insurance. Here's what to consider about adding your teenager to your insurance.
When Should You Add Your Teenager to Your Car Insurance?
There is no standard rule about adding your teenager to your auto policy. Whether you should add them as they first get their permit or when they get their license depends on numerous factors, including state laws and insurer-specific rules.
Some insurance companies might require you to add your teenager when they get their permit, while other insurers might have you wait until they have a full license. It's always a good idea to contact your insurance company or a licensed insurance specialist to ensure your child is protected.
If you are required to add your permitted driver to your policy, chances are you will not be charged until they are fully licensed.
How Much Does It Cost to Add a Teenager to Your Car Insurance Policy?
Adding a young driver to your policy can be expensive. Estimates show that depending on the insurance company, you can expect your premium to increase by 50% to 100%, according to the Insurance Information Institute. This considerable premium increase is due to the new driver's inexperience behind the wheel.
Insurance companies take into account a driver's probability of being involved in an accident (among other factors) when setting rates. Teenage drivers ages 16 and 17 are three times more likely to be involved in fatal car crashes than drivers ages 20 and above, according to the Insurance Institute of Highway Safety (IIHS). Additionally, police data suggests they are four times as likely to be involved in incidents of all severities.
What Happens if You Don't Add Your Teenager to Your Car Insurance?
If your teenager lives with you and operates your vehicle, they need to be listed on your auto policy. If they're not, there could be serious consequences.
If an uninsured teenager gets into an accident and they are not included on your policy, your insurance company could deny you coverage. Some insurance companies might agree to cover the losses caused by a teenager they were unaware of, recouping the costs in installments over time. Other insurance companies might treat the situation as an insurance fraud attempt if they suspect the teen was purposely left off of the policy.
Insuring a teenager can be costly enough on its own. If your teenage child is caught driving without proper coverage, they might end up with their license suspended or revoked. In such instances, the teenagers are deemed high-risk drivers. Being categorized as a high-risk driver could make an already high premium even higher or result in insurance companies refusing to cover them altogether.
How to Save Money on Car Insurance for a Teen
There are things you can do to bring the insurance premium down to a more bearable level.
- List them on your own policy. As a fresh driver, it would be best not to register your teenager's first vehicle in their name. If your child owns the vehicle, they will be required to get a separate policy in their own name. If you list them on your policy, they will enjoy some of the benefits you as the parent gathered over the years, resulting in a much lower premium.
- Get a good student discount. Many insurance companies offer a better price for responsible young adults. If your teenager maintains an average grade of B or higher, they might be eligible for the discount. Your insurance company might ask for a school report card to be sent over as proof.
- Get a student away discount if they don't live at home. If your child attends a boarding school or is already in college and they do not drive your vehicles often, a student away policy can offer a discount.
- Choose the right car. Driving a safe car is key to ensuring your teenager drives protected, for less. Safety features like airbags, anti-theft systems or anti-lock brake systems help your teenage driver stay safe on the road and, in turn, can lower your insurance premium.
The Bottom Line
The most convenient way to add your teenager to your policy is to contact your insurance company or agent directly. They will be able to advise on whether it's time to add them to your policy and check any applicable discounts.
Adding a new driver to your policy is a great opportunity to shop around for less expensive insurance. Some insurers are more understanding and lenient toward young drivers than others. Knowing your options is the best way of ensuring you're not missing out on savings. With Experian, you can now provide your information just once and get online quotes from over 40 insurance companies, all in one place.