Insuring Teen Drivers: Divorced Parents' Guide

Insuring a teenage driver is already expensive, but it can get even more complicated when the parents are divorced. In this situation, it's essential to ensure the teen driver has proper insurance coverage to avoid financial disaster. The parent with primary custody should insure the child on their policy, but the non-custodial parent should also inform their insurer about the teen driver. If the teen has their own car, it's usually cheaper to include them on their parents' insurance policies.

Custodial parent's insurance policy

If divorced parents share joint custody of their teenage driver, the rules for insurance are a little different. In this case, insurance companies recommend that the teen driver be added to both parents' policies. This is because the teen will be driving vehicles owned by both parents and it is essential that they are properly insured.

If the teenager lives with one parent and only visits the other occasionally, insurance providers recommend that the custodial parent adds the teen driver to their policy. The parent with primary custody should insure the child on their policy, even if the other parent offers to pay for the insurance. The non-custodial parent should ask their insurer if the teen must be added to their car insurance policy.

It is important to note that the cost of insuring a teenager is high, at an average of $197 per month for liability coverage and $374 per month for full coverage. Parents can cut these costs by looking for discounts that their teen qualifies for and encouraging them to practice safe driving habits. Enrolling your child in a defensive driver course can also help reduce insurance rates.

Regardless of the insurance situation, it is important for divorced parents to have consistent rules for their teen driver. This includes setting boundaries and expectations around safe driving habits, such as no cell phone use or texting while driving, limiting the number of passengers, and setting boundaries on where the child can take the car.

Non-custodial parent's insurance policy

If you are a non-custodial parent, the first step is to check with your insurance provider to see if your teen needs to be added to your car insurance policy. If your teen only visits occasionally and does not have a driver's license, you may not need to add them to your policy. However, if they do have a license, you should inform your insurer and ask if your teen should be added as an occasional driver.

If your teen has their own car, it is generally recommended that the parent who purchased the car for the teen's use should carry the insurance on that vehicle. This is because, in most states, car insurance is not included in child support orders, which typically cover basic living expenses. However, you should still check with your insurer to see if your teen should be listed as a potential driver on the non-custodial parent's policy.

If you share joint custody, your teen will likely need to be added to each parent's car insurance policy, especially if they will be driving vehicles registered to both parents. This is because, in the event of an accident, you want to ensure your teen has proper insurance coverage. It is also worth noting that adding a teen driver to your policy can be costly, but it is still generally cheaper than the teen having their own separate policy.

To save on insurance costs, you can look for discounts that your teen may qualify for, such as enrolling them in a defensive driver course. You can also encourage them to practice safe driving habits, which can help reduce insurance rates.

Teen driver safety

Motor vehicle crashes are the leading cause of death for 15- to 18-year-olds in the United States, and 2,514 people were killed in crashes involving a teen driver in 2022. Therefore, it is important to have conversations with your teens about safe driving early and often, before they reach driving age. It is also important to have conversations with the parents of your teen's peers or friends and compare notes.

As a parent, you are the number one influence on your teen driver’s safety. Self-reported surveys show that teens whose parents impose driving restrictions and set good examples typically engage in less risky driving and are involved in fewer crashes. It is important to discuss the rules of the road, such as the illegality of drinking before the age of 21, and that driving drunk or high is unacceptable at any age. In 2022, 22% of teen drivers involved in fatal crashes had been drinking. It is also important to emphasise that driving is the first and only task when behind the wheel. This means no phones or texting while driving, and not doing anything else—like eating, drinking, or fixing hair and makeup—when you should be fully focused on driving. About 10% of all teen drivers involved in fatal crashes in recent years were distracted at the time of the crash. Speeding is also a critical safety issue for teen drivers. In 2022, it was a factor in 30% of the passenger vehicle teen drivers (15-18 years old) involved in fatal crashes.

It is also important to discuss the financial aspects of driving with your teen. Insuring a teenager is expensive; it costs an average of $197 per month for liability coverage and $374 per month for full coverage. You can cut costs and get cheap car insurance by looking for discounts that your teen qualifies for and encouraging them to practice safe driving habits. Enrolling your child in a defensive driver course, like the teenSMART program, can help reduce your car insurance rates.

If you are divorced, it is important to involve both parents' insurance companies so the teen has proper car insurance coverage in case they drive the vehicles they can access in both households. Generally, the parent with primary custody should insure the child on their policy. However, if the same company insures both parents, the teen driver would be covered by both parents' policies, regardless of whether the teen driver is listed as a driver on either policy.

Discounts and courses

When it comes to insuring a teenage driver, the costs can be high. Teenagers are typically charged higher rates than older drivers due to their lack of experience and the increased risk they pose to insurers. However, there are ways to reduce these costs through discounts and courses.

Discounts

Many insurance companies offer discounts for young drivers who are full-time students and can maintain good grades. To be eligible for this discount, students must keep their GPA at a B average or above, or rank in the upper 20% of their class. This not only lowers insurance premiums but also encourages students to maintain or improve their academic performance.

Another way to reduce costs is to bundle multiple insurance policies, such as home and auto insurance, under the same provider. This unlocks multi-policy discounts and can lead to significant savings.

Courses

Enrolling your teenager in a defensive driving course can also help to reduce insurance rates. These courses improve driving skills and showcase a commitment to safe driving. They also help to build a solid driving record with no traffic violations or accidents, which is another factor that insurance companies consider when determining premiums.

Advanced driver training courses are also available and are different from the pre-licensing course required to get a driver's license. These courses teach defensive driving techniques, traffic laws, drug and alcohol awareness, and how to drive in adverse weather conditions. They can lead to significant savings on insurance premiums, with some companies offering discounts of up to 10%.

Other Options

Usage-based insurance is a newer concept that allows insurance companies to monitor driving behaviour and adjust premiums accordingly. By installing telematics devices or smartphone apps, teenage drivers can showcase their responsible driving habits and potentially lower their insurance rates.

If your teenager is attending college or vocational school, they may also qualify for an "away at school" discount if they meet certain criteria, such as age and distance from home.

It is important to note that insurance policies can vary, so it is recommended to read through the policy language and contact your insurer for specific details.

Joint custody

If divorced parents share joint custody of their teenage driver, both parents typically add their child to their car insurance policies, especially if the teenager uses a car at both residences. This is known as a 50-50 custody car insurance plan.

The high cost of insuring a teenager makes 50-50 car insurance policies appealing for parents who share custody. Teenage drivers have some of the most expensive auto insurance rates among motorists. The average cost of liability car insurance for teens is $197 per month, and full coverage is $374 per month.

If the same company insures both parents, the teenager would be covered by both parents' policies, regardless of whether the teen driver is listed as a driver. This is because some insurance policies define an "insured" individual as a person related to the policyholder by blood or marriage who is a household resident.

However, insurance companies may have different guidelines, so it is important to ask the insurance carriers about their specific guidelines. For example, some insurance companies say that the parent who has custody of the teen driver when they attend school should be the one to insure them.

To save money, parents can look for discounts that their teen qualifies for and encourage them to practice safe driving habits. For example, enrolling a teenager in a defensive driver course can help reduce insurance rates.

Frequently asked questions