Auto Insurance For Teens: Getting Covered Under 18

Auto insurance for under 18s can be a complex and costly endeavour, with rates varying significantly depending on location, gender, and whether the minor is on their parents' policy or their own. In most states, a 17-year-old can get their own insurance policy if a guardian or parent co-signs, or if they are an emancipated minor. However, they can expect to pay a lot more for coverage than if they were on a parent's policy. Adding a teen driver to a parent's policy can increase the premium by an average of $3,726 annually. For 18-year-olds, the average cost of full coverage car insurance is $485 per month, with the cheapest companies being State Farm, Erie, and Farm Bureau.

Getting auto insurance as an emancipated minor

If you are an emancipated minor, you can get auto insurance before you turn 18. An emancipated minor is a young person who is legally free from the control of their parents or guardians and can prove financial independence. There are various ways to become an emancipated minor, including:

• Getting a court order from a judge (which doesn't require parental consent)
• Getting married (which usually requires parental consent)
• Enlisting in the military (which usually requires parental consent)

To prove your emancipated status, you will need to present a court order, marriage certificate, or military enlistment paperwork.

Buying Auto Insurance as an Emancipated Minor

As an emancipated minor, you are allowed to purchase and register a vehicle and buy an auto insurance policy in your name. However, the process for doing so varies depending on the specific laws of your state. It is recommended that you contact your state's Department of Motor Vehicles (DMV) and insurance regulator to understand the requirements and procedures in your state.

The Cost of Auto Insurance for Emancipated Minors

It is important to note that auto insurance for minors, including emancipated minors, tends to be more expensive than if they were on their parent's or guardian's policy. The average annual rate for a 17-year-old with their own policy is around $5,524 for full coverage. The cost may vary depending on factors such as gender, location, and driving record.

Staying on a parent's policy

Staying on a parents' policy is a great way for under-18s to save money on auto insurance. Here are some key things to know about staying on a parents' policy:

No Age Limit

Technically, there is no age limit for staying on your parents' car insurance policy. As long as you live in the same house, you can remain on their insurance plan. This is also true if you're away at college but still live at home during breaks. However, once you move out, you will likely need to get your own insurance policy.

Financial Benefits

It is much cheaper for teens to stay on their parents' insurance policy than to purchase their own. The average insurance cost for teen drivers is $691 per month, while the average for American drivers is $84 per month. By staying on your parents' policy and paying them the difference, you can save a significant amount of money.

Building Insurance History

Staying on your parents' policy can also help you build insurance history. If you maintain continuous coverage with the same insurer, you may be eligible for discounted rates later on.

Student Discounts

If you're a full-time student with good grades, you may be eligible for a good student discount, which can help lower your parents' insurance premiums.

When to Get Your Own Policy

While staying on your parents' policy can save you money, there are some situations in which you should consider getting your own policy. These include when you become financially independent, move out of your parents' home, own your own vehicle, or get married. Additionally, if you have a poor driving record, it may be best to get your own policy to avoid increasing your parents' rates.

Other Considerations

When deciding whether to stay on your parents' policy or get your own insurance, it's important to consider their driving record. If your parents have a history of tickets and accidents, it may actually be more expensive for you to stay on their policy. In this case, it might be worth shopping around for your own insurance.

In summary, staying on your parents' insurance policy can offer significant financial benefits to under-18s, but it's important to weigh the pros and cons and make a decision that works best for your specific situation.

Discounts for good grades

Maintaining good grades can help you save on car insurance. Many car insurance companies offer good student discounts, which can reduce your total insurance costs by 10 to 25%. To qualify for a good student discount, you generally need to be a full-time student enrolled in high school, college, or homeschooling, and maintain a "B" average or a 3.0 GPA. Some companies may also offer the discount to those in the top 20% of their class or those who score in the top 20% on standardized tests like the ACT, SAT, or PSAT.

The good student discount is typically available to students with their own policy or those listed as additional drivers on their parents' policy. However, eligibility and the amount of the discount may vary between providers and locations. For example, State Farm offers a good student discount of up to 25%, while GEICO caps theirs at 15%. Therefore, it is essential to research and compare quotes from different insurance companies to maximize your savings.

In addition to the good student discount, there are other ways for students to save on car insurance. Many insurers offer discounts for safe driving courses, especially for teens and young adults. Students in college who live away from home and do not have regular access to a vehicle may also be eligible for a distant student discount, as their risk of an accident is likely much lower.

By combining good student discounts with other available discounts and staying on their parents' policy, students can significantly reduce their car insurance costs.

Discounts for safe driving

Safe driving discounts are a great way to save money on auto insurance for under 18s. Here are some ways to achieve this:

Safe Driving Discounts

Safe driving discounts are a great way to save money on auto insurance, especially for young drivers. Many insurance companies offer discounts for safe driving, which can be a great way to reduce premiums. These discounts are typically based on a driver's record, with some companies offering lower rates for those with no at-fault accidents, no major comprehensive claims, and no points on their driver's license from moving violations. Some companies, like Progressive, offer a specific safe driver discount program, while others may have more general safe driving discounts.

Good Student Discounts

In addition to safe driving discounts, many insurance companies offer good student discounts for full-time students who maintain good grades. For example, Allstate offers a good student discount for unmarried drivers under 25 years old with at least a B- average. State Farm also offers savings of up to 25% for students with good grades up to the age of 25 or their last year of school. These discounts can help offset the typically high cost of insuring teen drivers.

Telematics Programs

Telematics programs, such as Progressive's Snapshot program, monitor teen driving habits and can provide discounts for safer driving. These programs typically involve installing a small device in the car or using a smartphone app to track driving data such as braking, speed, and the time of day the car is driven. While these programs can provide discounts, it's important to note that rates could also increase if the company detects poor driving habits.

Defensive Driving Courses

Another way to save on auto insurance for teens is to enroll them in a defensive driving course. These courses teach safe driving techniques and can result in significant discounts on car insurance. For example, GEICO offers a discount of up to 10% for eligible drivers who complete an approved defensive driving course. State laws and requirements may vary, so it's important to check with your insurance provider to see what specific discounts and requirements apply to you.

Distant Student Discounts

If your teen driver attends college away from home and leaves their car behind, they may be eligible for a distant student discount. This discount is typically offered when the student is a certain distance away from home, usually 100 miles or more. This discount can provide significant savings, especially when combined with other discounts such as the good student discount.

Getting a co-signer

If you are under 18 and looking to get car insurance, you will need an adult to co-sign your insurance policy. This is because minors (those under 18) are not allowed to sign a contract, and an insurance policy is a legally binding contract. A co-signer is an adult who agrees to take on the responsibility of repaying the loan if the primary borrower fails to do so.

A co-signer is generally not required to be on the auto insurance policy, but it is often recommended. The co-signer is only responsible for the loan and is not required to be on an insurance policy. However, it is a good idea to list the co-signer on the car insurance policy under certain conditions. For example, if the co-signer is also a co-owner of the vehicle, it is advisable to have them listed on the policy to ensure they have the necessary coverage in the event of an accident or damage.

Additionally, if the co-signer is a regular driver of the vehicle, they should be included in the policy to avoid liability issues. This is quite common, as it is typical for a co-signer to drive the vehicle they have co-signed for. Including the co-signer as a driver on the insurance policy may also help reduce insurance rates, especially if the primary owner is a high-risk driver.

It is important to notify your insurance company about the presence of a co-signer to ensure proper coverage and compliance with the policy terms.

Frequently asked questions