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Guide to Auto Insurance for Teenage Drivers

Published August 7, 2023
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Auto Insurance for Teenage Drivers

This article has been reviewed by licensed insurance industry expert Moshe Fishman 0m 8/7/2023.

Getting a learner’s permit and driver’s license is an incredibly exciting time for a teenager. For some it represents freedom! It’s an opportunity to visit with friends, get to school/work, or just get behind the wheel.

For adults, however, this exciting time makes them cringe. Not only do these young drivers make you worry about their driving behaviors, they notoriously want to borrow your car, stay out late, and unknowingly raise your insurance premiums. 

And when it comes to insurance, it can be incredibly expensive now that your teenager is officially a driver in your household. Yes, adding a teen to your auto insurance policy will cost you. The reason is in part due to some sobering statistics surrounding teenage drivers. 

What’s covered in this article:

  • Facts about teen driving
  • Causes of teen-involved accidents
  • How to insure your teen
  • Best time to add a teen driver to your policy
  • Recommended coverages for your teen
  • Cost of insuring your teenage driver
  • Discounts on teen car insurance
  • Save money when adding your teen to your policy
  • How do I add my teenager to my policy?
  • Should teen drivers get their own auto policy?
  • Helping your novice driver be safe on the road

Sobering facts about teen driving.

If you’ve checked with your insurance agent for the rates to insure your teenage driver, you’re probably wondering why it is so expensive. There are many reasons. These factors influence auto insurance rates, usually increasing them. From distracted driving and inexperience to teen passengers and nighttime drives, teen drivers pose a greater risk while on the road.

Statistics show these factors are major contributors to teen-involved car accidents and injuries. And the statistics involving accidents and driving-related deaths among teenagers are only getting worse. The Centers for Disease Control and Prevention’s website, for example, states that “Motor vehicle crashes are the second leading cause of death for U.S. teens.” 

Are teenage drivers really accident-prone?

Unfortunately, approximately seven deaths occur every day in the 13-19 age group due to “motor vehicle crash injuries.” Drivers in the 16-19 age group are almost three times more likely as older drivers to be killed in a crash for every driven mile. 

These statistics are sobering and account for why insuring teen drivers is costly. Among all other age groups, teens are most likely to cause auto accidents. This explains why states have placed Graduated Licensing Laws on this group of drivers to allow more time to learn the skills of driving. 

Why are teens so likely to get in auto accidents? What are the factors that contribute to the high rate of crashes?

What are the causes of teenage accidents?

The last thing you want to hear is that your teen was involved in an accident. Unfortunately, the odds of crashing their vehicle (or yours) are not in your favor. In fact, there are several reasons that can contribute to why they are more likely to find themselves in a fender bender or worse. 

If you’ve got a teenager on your auto policy, it’s key to know the dangers they face.

  • Teenage drivers are inexperienced. 

Being inexperienced on the road is the number one contributor to teen accidents and injuries according to the CDC. This is especially true within the driver’s first few months of driving. 

  • Teens are distracted drivers.

Distraction occurs when we stop focusing on our driving by taking our eyes off the road, not keeping hands on the wheel, and not thinking about the road in front of us. Things that distract teens include cell phones, other passengers, eating, and adjusting vehicle controls. 

  •  Other teenage passengers can increase your teen’s risky behaviors.

Peer pressure, good friends, and having a fun time can be a lethal combination when teenagers are driving together in the same vehicle. In fact, a study by the National Highway Traffic Safety Administration (NHTSA) shows that teenage drivers have a greater chance of engaging in “potentially risky behaviors” if there’s another teen in the car versus driving solo.

These risky behaviors can increase threefold if there are multiple passengers present as compared to driver-only driving. Unfortunately, the increased risk of fatal accidents also increases with the number of teen passengers that are riding along with the teen driver. 

  • Other reasons for teen accidents.

Other reasons for teenagers being involved in car accidents include night driving, being in a drowsy or fatigued state, engaging in reckless driving, not wearing a seat belt, and drug/alcohol abuse. Unfortunately, not only is your child at risk but this type of behavior also drives up the cost of your car insurance. 

How do I insure my teenager?

Insuring your teen can seem confusing and complex. Between states’ Graduating Licensing Laws, internal insurer guidelines, and various types of coverages, it can also be frustrating. Here’s a look at what you can do to be sure your teenage driver is covered:

  • Check with your existing insurance company to discuss the best time and recommended coverages (usually 100/300/100) for adding your teen to your policy.
  • Compare quotes from other insurance companies with the suggested coverages.
  • Learn about any available discounts that might apply to your teen and your household to reduce costs.
  • Help keep rates lower and foster safe driving behaviors by helping your teen stay focused, buckle up, and be a safe, responsible driver.

When should I get car insurance for my teen?

The time to consider covering your teenage driver will depend on your state’s laws and your insurance company’s guidelines. Some companies require that the teen be covered as soon as they get their driving permit.

As a general rule, they may be considered “permitted” drivers and be covered under their parent’s or guardian’s policy automatically. But once they become an official licensed driver (or provisional), they will need to be added to your policy. Or in some instances, get their own policy.

In the meantime, don’t be surprised if your insurance company contacts you when your child reaches the age of 16 or 17. They are aware of the persons living in your household and may list your child (without added premiums) if they don’t yet have a permit or license. 

What coverages are recommended for teen drivers?

Although there are minimum state requirements, these low coverages are not going to be adequate insurance for your young driver. Here are some recommendations:

  • Include higher amounts of liability insurance to cover damage and injuries caused by your teen driver. Medical bills and damage to property can add up quickly and reach hundreds of thousands of dollars. Should your teen cause an accident that exceeds your liability limits, you or your teen will be responsible for the rest of the unpaid bills.
  • Consider an umbrella policy of $1 million+ to increase your liability insurance once you hit your car insurance limits. 
  • Include comprehensive and collision if your teen’s car is financed as this coverage will be required. If your teen owns the vehicle outright, you can decide if you need these coverages based on the car’s worth and the ability to make claims for repairs to the vehicle or if it’s a total loss. 

What are the costs to insure my teenage driver?

There are many considerations that determine the cost of insuring your teen. Being new and inexperienced at driving is why insurance rates are highest during the first years of a licensed driver. 

Unfortunately, the cost of adding your teen can increase your own policy by over 150%. Having a male teen can increase rates by a few thousand if added to your policy and double that amount if he has his own policy. This all depends on varying factors and the state your teen resides in. 

Insurance costs also vary by the insurance company. Comparing quotes from different carriers can help ensure you get the best rate possible. With time and experience, rates will eventually go down for your safe teen driver with no tickets or accidents. 

Are there any car insurance discounts for my teen?

When getting auto insurance for your teen, be sure to find out what discounts may be available from various insurance providers. Don’t forget to ask about these discounts as insurers may not always bring them to your attention. Here is a list to make yourself familiar with these ways to save money:

Good driver discount – Having a good driving record free from tickets or accidents will help your teen work towards this type of discount. Savings are about 10 to 25% for licensed drivers with clean records ranging from 3 to 5 years.

Good student discount – If you have a good student on your hands (high school or college), you could possibly benefit from the savings of 5 to 25%. A good student generally means they’re under 25 years old, and either ranked in the top 20 % of their class or obtained a 3.0 GPA or above.

Low mileage discount - This type of discount depends on how much your child drives annually. Discounts are normally available for under 10,000 annual miles and can increase with lower driving annual miles under 5,000/7,000 miles.

Driving course discount – You may also benefit from discounts from 5 to 15% from some insurance carriers for a driver’s training course that goes beyond mandated courses that are required for licensing. Other driver education classes, like a defensive driving course, might also get you a discount.

Student away discount – College students who are enrolled in a college 100+ miles from home with no car may benefit from discounts by some insurance carriers. Such discounts can range from 5 to 30% 

Family plan discount – Young unmarried adults (under 21) living with their parents, depending on the insurance company, may also reap a discount. In addition, some insurers give discounts if they buy their own insurance from their parents’ provider.

Multi-vehicle discount – Adding another vehicle to your policy can also yield a multi-vehicle discount. In addition, check into savings that are possible by bundling together home and auto.

Other discounts – Some companies provide discounts for good driving while participating in a Pay-As-You-Drive program using a telematics device that transmits information on driver behaviors like speed, braking, etc.

What other ways can I save on my teen’s car insurance?

Delay getting driver’s license This may not be a popular choice with your child but can save a few dollars, which can add up with each year they are not yet driving. Higher insurance costs go hand-in-hand with younger drivers. 

Higher deductibles - Choose higher deductibles to help lower your premiums. However, this means more out-of-pocket when your child is involved in an accident. For example, if your deductible is $1500 and the damage caused by your teen to the neighbor’s fence is $1,000, you will be responsible for the entire amount to fix the fence. In this case, your insurer is not aware of the accident since you will not need to make a claim and your rates will not increase due to this single-car incident. 

Avoid the sports car – Choose a sedan or small SUV for your teen to get good rates. Sports cars command higher insurance rates as well as other big-engine, high-powered type vehicles as they cost more to repair.

Also, be sure your teen’s car has safety features for their protection and check if there are any applicable discounts. You can also save money if your child is assigned to the cheapest vehicle on your policy. Check with your insurer if this is possible.

Secondary driver – Share your car and make your novice driver the secondary driver on your existing policy. As a secondary driver, your teen would likely drive less, and your insurance might be cheaper. 

Dump the comp and collision – Comprehensive and collision insurance covers your teen’s car in case of an accident. If you drop this part of the policy, maybe because your child’s vehicle has low worth, you will save money. Of course, in case of an accident, you’ll be responsible for your car’s repairs or replacement.

How to add your teenage driver to your policy

If you are looking for the least expensive route to insure your newly-licensed driver, simply add them to your auto insurance policy. Your child is likely already listed on your policy so the official addition as a licensed driver will be easy. 

But don’t expect a slight increase in your premiums. Adding a new, young driver is expensive and will make a dent in your wallet. As you are considering adding your teen to your policy, the timing is also a great opportunity to check around for better rates. 

Is it better for my teenager to get their own policy?

If you’re wondering if your teenager can get their own policy, the answer is yes. But be sure to check with your insurer first as this option is more expensive than adding them to your policy. If they do decide to go out on their own, they may need a co-signer depending on your state’s regulations. 

If your teen does get their own policy, you will need to tell your insurance company to remove your teen and not cover them in your policy. This is not an automatic procedure and is called a “named exclusion.” By removing them from your policy, however, you and your teen are agreeing, along with your insurance company, that your child is no longer covered for accidents they cause. 

How can I help my teen drive more safely?

There are many things that you can do to help your child be safe behind the wheel. Start by being a good example yourself as a safe driver and always use your seatbelt. According to the CDC, it’s best to stay calm and invest some time riding along about 30-50 hours with your teen.

Be sure to practice at different times of the day and during diverse types of weather. Practice in light traffic, heavy traffic, freeways, etc. Restrict the number of friends that travel as passengers with your teen and limit nighttime driving. It’s also a good idea to discuss your rules and create a Parent-Teen Driving Agreement to set clear expectations. 

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