Car Insurance for Teens in New Jersey - Plymouth Rock

Are you the parent of a new driver? You knew this day would come, but it’s hard to believe that your child is either driving or will soon be ready to drive your car! It can be as nerve-wracking for you as a parent as it is exciting for your child. The thought of your child behind the wheel can be stressful enough, and now you’re faced with the presumptive challenge of navigating insurance coverage and absorbing the cost of adding your child to your policy. Car insurance for teens shouldn’t be complicated, but you probably have a lot of questions related to the process of adding them to your insurance policy and when it’s best to do so. Yes, having a new driver behind the wheel can be stressful, however, adding them to your insurance policy doesn’t have to be. Here are some key things you will need to know before they grab the keys to your car to go out for a spin on the road. 

When Should I Add My Teen to My Insurance Policy?

This question is less about timing and more about the nature of your policy coverage and how it pertains to your new driver. Obviously, you will want to have them protected when he or she is out on the road. If they are driving for the first time in New Jersey, they will need to complete the Graduated Driver License (GDL) program. Once they have passed a vision test at your local motor vehicle agency and has obtained his or her learner’s permit, you should notify your insurance carrier to let them know you have a teen driver who will be operating your vehicle under the adult supervision of yourself or a certified driving instructor. It’s possible that your insurance carrier may thank you for the call and simply make a note in their system, or, depending on the carrier, your child may be added as a driver on your existing policy that day. Because carriers manage risk differently, it’s always best to check in.

The impact of My Teenager having a Learner’s Permit vs a Full License?

Generally speaking, most insurance companies will make a distinction between a learner’s permit and a full driver’s license and will not require you to officially add your child as a driver on your policy until he or she acquire their license. However, whether they have a learner’s permit, or a full driver’s license, it’s a best practice to contact your insurance carrier to inform them of your new teen driver. Contrary to what most people believe, your car insurance follows your car – not the driver. This means that in the state of New Jersey, comprehensive and collision coverage will protect your car regardless of who’s behind the wheel. The real issue with allowing someone (such as your teen) to borrow your car is the liability risk. Even if your teen doesn’t have a full driver’s license, he or she should still be listed as a driver on your policy.

Does My Teen Need to Be on My Insurance Policy While Receiving Lessons from A Driving School?

Technically, the answer to this question depends on the vehicle being used during the lessons. In most cases, insurance policies will contain a provision known as an “omnibus clause,” which extends insurance protection for any driver provided he or she (your child in this case) has the consent of the owner to operate the vehicle. If they are enrolled in a driving school, there would most likely be an auto policy and registration in the name of the legal entity providing the instruction services. The omnibus clause provision would extend coverage to your child as a “permitted” driver during on-the-road instruction. However, if your teen is driving your car you will want to have them included as a driver on your policy.

Despite this clause found in many insurance policies, it’s best to communicate with your insurance carrier to inform them of your new driver in order to avoid potential coverage gaps. There may be times when you’re with your teen on the road in your vehicle logging time toward earning the opportunity to obtain a full license. Either way, you’ll want to make a very important call to your insurance carrier to have your policy updated with the name of your child listed as a driver even if they haven’t obtained their full driver’s license.

What Is the Cost of Adding My Teen Driver to My Car Insurance Policy?

While the rate increase to add a young driver on your insurance policy has decreased in recent years, you still need to be prepared for a bump in what you’re currently paying for car insurance. The New York Times recently published the results of a study showing the average annual premium increase for adding a teen driver to your auto policy is 79%, which equates to an average of $671 more per year. The rise in the price you pay for coverage is directly related to the increased risk of having your child on your policy. According to the Insurance Institute for Highway Safety, the rate at which young drivers have auto accidents is three times those of drivers who are 20 years of age or older per mile driven.

The National Highway Traffic Safety Administration recently reported that 73% of all teen deaths in the United States were the direct result of a motor vehicle accident. Of course, there are multiple factors that will determine your rate such as where you live, your child’s age, gender and the type of vehicle they will be driving. It’s probably not a popular idea for your teenager, but having your child wait to drive even one year could potentially save you 20% of annual premium. Other ways to reduce premium for them may include earning a discount for completing a defensive driving course and a good grades discount. Your insurance carrier will generally view these things favorably seeing that your child is showing maturity and responsibility.

Final Thoughts on Car Insurance for Teens

Turning seventeen and driving is an exciting time in the life of a teenager, however operating a vehicle in the state of New Jersey is both a huge responsibility and a privilege. The importance of clear communication about your new driver with your insurance carrier cannot be overstated. Yes, your insurance rate will most likely rise in accordance with the increased risk of a new driver; however, the safety of your child is the most important consideration. Having your insurance carrier list your teen as a driver on your policy will protect your child and solidify your relationship with your carrier as a responsible adult. If you have additional questions about car insurance for young drivers, a Plymouth Rock representative would be happy to assist you.

Call 855-993-4470, get your free quote online, or find an agent to learn about car insurance for teens NJ. If you need additional information it can be found on our Contact Us page.