Article by:
Stephanie Colestock
Adding a teenager to car insurance policies almost always raises premiums, and the jump can be significant. Insurers see newly licensed drivers as a much higher risk than older or experienced drivers, so you can expect your rate to show that the moment your teen is added to your policy. While you usually can't avoid the increase entirely, there are ways that you can make the rate jump smaller.
Below, explore the eight ways to keep teen driver insurance as affordable as possible, when your teen needs to be added to your policy, and what happens if they aren't.
Car insurance rates are calculated based on many things — including risk factors — and teen drivers are statistically some of the riskiest on the road. According to data from the Insurance Institute for Highway Safety (IIHS), crash rates for teen drivers are about four times higher per mile driven than those of drivers who are age 20 or older, and fatal crashes for teens happen at about three times the rate of drivers 20 and older. Much of that likely comes down to inexperience, since new drivers are still learning to judge speed, spot hazards, and handle distractions on the road.
That higher risk is undeniable and translates to a higher premium on your policy. The good news is that rates typically come down over time as your teen builds a clean driving record, though there are steps you can take now to reduce the cost.
You probably can't keep your premium from rising when adding a teenager to car insurance coverage, but you can keep the increase as small as possible by taking a few important steps. Many of these options work best when you plan ahead, so it's worth starting while your teen still has their learner's permit.
Many insurers offer discounts to full-time students who keep their grades up, often requiring a B average or better. Discounts and requirements vary by state and carrier, so be sure to ask your agent what qualifies and how often you'll need to submit report cards or transcripts.
Some insurers offer discount premiums for teens who finish an approved driver education or defensive driving course. Before your teen enrolls, check which courses your carrier accepts so it actually counts toward a lower rate.
Check out usage-based insurance programs, which track driving habits like speed and braking through an app or plug-in device. Safe driving can earn your teen a discount, and the program’s feedback can double as a coaching tool for parents.
Just be sure to ask whether your carrier's teen telematics program will raise rates if it detects risky driving. Some programs offer discounts just for participating, while others base future rates off the results (which potentially mean even higher premiums).
If you have more than one vehicle, ask your insurer how it will rate your teen. Some carriers let you assign a teen to a specific car as the primary driver, so pairing them with an older, less expensive vehicle can help lower your premium. Other carriers will rate the highest-risk driver (likely your teen) for the most expensive car in the household, since it’s assumed that they will have access to all of the vehicles on the policy.
It's worth knowing which approach your insurer uses so you can ask questions and plan accordingly. Also note that if you are allowed to assign your teen to a more economical vehicle, it’s important that it’s actually their primary vehicle. If they regularly drive a different, more expensive car on the policy and are involved in an accident, your carrier could adjust your premium or question any claim.
What your teen drives also affects your premium. Vehicles with strong safety ratings and moderate repair costs tend to be cheaper to insure, while sports cars and luxury models usually cost more. The IIHS publishes a list of recommended vehicles for teens that balances safety and price.
If your teen goes to college away from home and doesn't take a car to campus with them, many insurers will offer a discount since they'll rarely be driving your vehicles. The minimum distance varies by carrier, so ask what applies to your teen's school.
If your teen will drive an older, paid-off car, you might consider dropping collision and comprehensive on that vehicle. Just be sure that if the vehicle were to get stolen or totaled, you could afford to replace it out of pocket.
A higher deductible for your teen’s vehicle can also lower your premium, as long as you could comfortably pay it after a claim. Avoid cutting your liability limits, though, since adding an inexperienced driver makes accidents more likely and higher limits more important.
Keeping your teen on the family policy usually means they benefit from discounts you already have, such as those for loyalty, bundling home and auto together, or insuring several vehicles with the same carrier. Buying a separate policy for your teen typically removes those savings.
Discounts and requirements vary by carrier, so use this as a starting point for questions to ask your insurer or agent. Not every carrier offers every discount, and some may have names or rules that differ from what's listed here.
|
Discount |
Who it’s for |
What to ask |
|
Good student |
Full-time students with strong grades |
GPA requirements and what proof is needed |
|
Driver education |
Teens who finish an approved course |
Which courses count toward the discount |
|
Telematics |
Families willing to share driving data |
Whether rates can go up for risky driving |
|
Distant student |
Students living away from home without a car |
The minimum distance and/or time from home |
|
Multi-car and bundling |
Households with several vehicles or policies |
How adding a teen affects your existing discounts |
Start the conversation with your insurer or agent as soon as your teen gets a learner's permit. Insurers handle permit holders differently. Some automatically extend your coverage to a teen driving with a permit, while others want the teen listed on your policy right away, sometimes at little or no extra cost until they're licensed. Student driver insurance rules can also vary by state, so it's worth confirming how your carrier treats permit drivers before your teen gets behind the wheel.
Once your teen is fully licensed, they'll generally need to be added to your policy, even if they don't have their own car and only drive occasionally. Insurers tend to want every licensed driver in your household to be listed, since these drivers theoretically have access to all of your vehicles.
Insurers expect you to disclose all licensed drivers in the household, so leaving a licensed teen off your policy may create serious legal and financial problems, especially if they're ever in an accident. An unlisted teen may be considered a misrepresentation; depending on your insurer and state, that could mean denied claims, canceled coverage, or a retroactive bill for the premium you should have been paying all along.
If your teen is licensed but truly won't drive your cars, some states allow you to formally exclude them from your policy. Just keep in mind that an excluded driver typically has no coverage at all under your policy; if they drive one of your cars anyway, you could be responsible for the full cost of an accident.
In most cases, buying a separate policy for a teen driver costs more than just adding them to your policy. On their own, your teen loses access to the discounts your household already has, and they don't benefit from your driving history or loyalty with your insurer.
Of course, there can be exceptions. If your teen owns a car titled in their name, or your own premium would rise sharply because of how your insurer rates a new driver, a separate policy might be worth pricing out. An experienced agent can quote multiple options so you can compare prices before you buy, and an independent agent can check whether a different carrier treats teen drivers more favorably overall.
The cost to add a teen to your car insurance depends on your state, your teen's age, the car they'll drive, your coverage, and how your insurer rates new drivers. Discounts can also make a big difference. The best way to know your actual cost is to reach out to a local independent agent and get a quote before your teen is licensed, so you have time to compare carriers and adjust your coverage.
Rates will probably rise if your teen has a moving violation or an accident. A speeding ticket or at-fault accident by any driver on your policy can raise your household premium, usually at renewal time. Conversely, a clean record helps your teen's rate come down faster.
Rates usually fall gradually as young drivers gain experience, especially if they avoid tickets and accidents. Many drivers see big decreases through their late teens and early 20s. There's no single birthday when rates automatically drop across the board, though, so it's worth reviewing your policy each year.
On average, teen boys pay more than teen girls for auto insurance coverage, as insurers can use gender as a rating factor in many states. And the numbers don’t lie: According to IIHS, about three out of four teen crash fatalities are males.
Adding a teenager to car insurance will likely raise your premium, but the right carrier and discounts can keep the increase manageable. Find a local independent agent who can quote your teen with several different carriers and coverage options, so you know what to expect and can choose the coverage that fits your budget.
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