Joint Custody Teen Auto Insurance: What You Need To Know

If you're a divorced parent, it's important to ensure your teen driver has the proper car insurance coverage on your or your ex-spouse's policy. The custodial parent must inform their insurance company when their teen starts the licensing process. If the teen regularly splits time between divorced parents, insurance providers recommend that the custodial parent add the teen driver to their policy. In some cases, insurance companies say it is whichever parent has custody of the teen when the child attends school. If the same company insures both parents, the teen would be covered by both parents' policies. The average cost of liability car insurance for teen drivers is $184 per month.

The impact of joint custody on insurance requirements

When it comes to auto insurance for a joint-custody teen, the requirements and recommendations can vary depending on several factors, including the living situation, custody arrangement, and state laws. Here's an overview of the impact of joint custody on insurance requirements:

Custody Arrangements and Insurance Providers

The insurance requirements for a joint-custody teen can depend on the specific custody arrangement. If the teen spends equal time with both parents, both parents will likely need to add the teen to their respective car insurance policies. This is because the teen is considered a resident of both households and regularly uses a car at each residence. However, it's important to check with the insurance providers of both parents, as their guidelines may vary. Some insurance companies may only require the teen to be listed on one parent's policy, especially if the parents share the same insurance company.

Impact on Insurance Rates

Adding a teen driver to an insurance policy can significantly increase rates, typically by 70% to 150%. Joint custody arrangements, where both parents include the teen on their policies, can help distribute this cost between the two households. However, it's worth noting that insurance rates for teens are generally higher due to their lack of driving experience and the associated risks.

Discount Opportunities

To mitigate the impact of adding a teen driver, insurance providers often offer various discounts. These can include good student discounts, safe driver discounts, low-mileage discounts, and discounts for installing a GPS tracking device in the teen's car. It's important for parents to inquire about these discounts and take advantage of the ones their teen qualifies for.

Communication and Safety

Effective communication between the parents and the insurance providers is crucial. Both parents should inform their insurance companies about the joint custody arrangement and any changes in the teen's driving status, such as obtaining a driver's license. Additionally, to ensure the teen's safety, it's recommended that both parents set clear driving rules and emphasize the importance of safe driving practices.

The cheapest insurance companies for teens

USAA

USAA offers the cheapest car insurance for teens, but only military families are eligible. USAA has lower-than-average rates and is available in all 50 states. However, coverage is not available to everyone.

Geico

If you're not eligible for USAA, Geico is the next cheapest option. Geico offers affordable rates and excellent auto insurance discounts for teens. It is the third-largest insurance provider in the country and is available in all 50 states.

State Farm

State Farm is the cheapest option for teen students. It is one of the largest insurance companies in the US, with high levels of customer satisfaction and a wide variety of discounts available. However, it has high rates for drivers with poor credit scores.

Erie Insurance

Erie Insurance is only available in 12 states, but it has the lowest average cost to add teen drivers to a parent policy. It also has reasonable rates for drivers with an accident or speeding ticket on their record and offers gap insurance and new car replacement coverage.

American Family Insurance

American Family Insurance has a low level of complaints and a robust lineup of optional coverage types suited for parents of teen drivers. However, it is only available in 19 states.

Discounts to reduce insurance costs

Insuring a teen driver can be expensive, but there are several discounts that can help reduce the costs. Here are some ways to secure discounts and lower insurance premiums:

Good Student Discounts

Full-time students who maintain good grades, usually a B average or above, can often qualify for good student discounts. Companies like Allstate and State Farm offer discounts to unmarried drivers under 25 who maintain good grades. Students who perform well academically are often considered more likely to be responsible and follow driving rules and regulations.

Driver Training Programs

Enrolling your teen in a driver training program or a safe driving course can also lead to discounts. Companies like Geico, State Farm, Allstate, and Travelers offer premium discounts upon completion of driver safety training courses. These courses teach young and inexperienced drivers the rules of the road and help reduce the risk of accidents.

Distant Student Discounts

If your teen driver attends college away from home and leaves their car behind, they may be eligible for a lower rate or a distant student discount. This discount is applicable if the child is a certain distance away from home, typically 100 miles or more.

Multi-Vehicle Family Plans

Adding your teen's vehicle to your existing insurance policy can often be cheaper than purchasing a separate policy for them. Many factors that contribute to better rates, such as being married or having a good credit score, will be applicable to your teen if they are added to your policy.

Vehicle Choice

The type of vehicle your teen drives can also impact insurance rates. Older, used vehicles with high safety ratings often get better insurance rates. These cars are cheaper to repair in case of a collision, and their safety features reduce the likelihood of accidents and serious injuries.

Telematics and GPS Programs

Installing telematics devices or GPS units in your teen's car can help monitor their driving habits and may lead to discounts. These devices track driving data such as braking, average speed, and the time of day the car is driven. Some insurance companies offer discounts for parents who use these devices to track their teen's driving behaviour.

While insuring a teen driver can be costly, taking advantage of these discounts and shopping around for the best rates can help reduce the financial burden.

The benefits of putting teens on their parents' policies

There are several benefits to putting teens on their parents' auto insurance policies. Firstly, it is often more cost-effective than purchasing a separate policy for the teen. Teens are considered high-risk drivers due to their inexperience, resulting in higher insurance rates if they buy their own policy. By adding them to their parents' policy, the overall cost can be lower.

Secondly, parents may have access to various discounts that can reduce the premium. These include good student discounts, safe driving discounts, and multi-policy or loyalty discounts. Insurance companies offer these discounts to encourage teens to maintain good grades, practice safe driving habits, and remain on their parents' policy.

Thirdly, by staying on their parents' policy, teens can build their insurance history. This can lead to discounted rates in the future when they eventually purchase their own policy. A continuous coverage history demonstrates stability and lower risk to insurance providers.

Additionally, it is generally more convenient and simpler to manage insurance matters under a single household policy. Having all family members insured under one policy streamlines the process, and parents can benefit from having an experienced insurance agent who can guide them in maintaining the best rates.

Lastly, in some states, teens are required to be listed on their parents' policy as soon as they obtain a learner's permit or driver's license. This ensures compliance with state laws and provides the necessary coverage for young drivers.

The average cost of insuring a teen driver

The cost of insuring a teen driver varies depending on factors such as age, gender, location, type of vehicle, and academic performance. Here is an overview of the average costs and factors affecting insurance rates for teen drivers:

Average Costs for Teen Driver Insurance

On average, adding a teen driver to a parent's car insurance policy can cost around $278 per month or $3,594 per year. The cost varies across different states, with the lowest average monthly cost being $126 in Hawaii and the highest being $884 in Connecticut. The average annual cost for full coverage car insurance for teens is around $3,775, or $315 per month.

Factors Affecting Insurance Rates

Age and Gender

The cost of insuring a teen driver decreases as they get older and gain more driving experience. For example, adding a 16-year-old male to a parent's policy can increase the premium by 56% compared to adding a 19-year-old female. Female teen drivers generally pay less for insurance than males due to lower crash rates.

Driving Record and Behaviour

Maintaining a clean driving record is crucial for teen drivers to avoid increased insurance rates. Insurance companies may offer discounts for safe driving practices, while traffic violations and accidents can lead to higher premiums.

Academic Performance

Many insurance companies offer good student discounts for teen drivers who maintain good grades, usually a B average or higher. This not only rewards academic achievement but also suggests responsible behaviour, which can lead to lower insurance rates.

Type of Vehicle

The type of vehicle a teen driver operates can impact insurance rates. Safe and reliable vehicles with more safety features and average horsepower tend to be cheaper to insure. High-performance cars and luxury vehicles generally have higher insurance costs.

Ways to Save on Teen Driver Insurance

There are several ways to save on the cost of insuring a teen driver:

• Add them to a parent's policy: Insuring a teen driver under a parent's existing policy is typically much cheaper than them having their own separate policy.
• Shop around and compare quotes: Different insurance companies offer varying rates, so it's worth comparing quotes from multiple providers to find the most affordable option.
• Take advantage of discounts: Various discounts are available, such as good student discounts, safe driver discounts, multi-policy discounts, and low mileage discounts.
• Choose the right vehicle: Opting for a vehicle with more safety features and average horsepower can help reduce insurance costs.
• Raise deductibles: Increasing the deductible, or the amount you pay before insurance coverage kicks in, can lower your premium. However, ensure that you can afford the deductible in case of an accident or claim.
• Encourage safe and responsible driving: Emphasising safe driving habits and avoiding distractions can help teen drivers maintain a clean driving record, which may lead to lower insurance rates over time.

In summary, insuring a teen driver can be costly, but by adding them to a parent's policy, comparing quotes, taking advantage of discounts, and choosing the right vehicle, it is possible to mitigate some of the expenses. It's important for parents and teens to work together to find ways to save on car insurance while prioritising safe driving practices.

Frequently asked questions