Jane Dotson
Insuring a teenage driver can be a daunting task for parents and teens alike. It is important to understand the various options, discounts, and potential pitfalls of insuring a new driver. While it is almost always more cost-effective to add a teen to an existing policy, there are several factors to consider, including the type of car, safety features, and the number of vehicles and drivers in the household.
| Characteristics | Values |
|---|---|
| Cost of insuring a teen driver | Significantly higher than the average driver |
| Average annual cost of insuring a teen driver | $3,512 |
| Average annual cost of insuring a 16-year-old male | $4,861 |
| Average annual cost of insuring a 16-year-old female | $4,532 |
| Cheaper option | Adding a teen driver to an existing policy |
| Discounts | Good grades, vehicle safety, studying far away, safe-driving, etc. |
| Pros of adding a teen to an existing policy | Cheaper rates, savings, and rate benefits for longtime drivers |
| Cons of adding a teen to an existing policy | Losing the good driver discount |
| Pros of a teen having their own policy | No risk of losing the good driver discount |
| Cons of a teen having their own policy | Significantly more expensive |
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What You'll Learn
Adding a teen to your policy
Adding a teen driver to your policy will almost always be significantly cheaper than taking out a new policy for them. However, it will increase your rates. According to Experian data, adding a teenager to your car insurance policy increases your premiums by $3,512 per year, or $293 per month, on average. According to the Insurance Information Institute, teens can increase a family's auto coverage anywhere from 50% to 100%.
The best time to begin the insurance process is before your teen driver gets a learner's permit. Many companies allow a teen with a learner's permit to be listed on the policy at no charge until they become a licensed driver, but don't assume this is the case. Contact your insurance company to find out what it will cost to add a teen to your policy.
When you add a teen to your policy, you will typically need the vehicle identification number (VIN) for their car, their driver's license number, and an estimate of how many miles they will drive per year. If you are switching insurance providers, make sure your new policy is in force before cancelling your previous coverage.
To get the best deal, compare quotes from different providers, look for discounts, and consider raising your deductible. You can also drop non-essential coverage and choose the right car for your child. Sedans, minivans, and SUVs can typically have the best rates for teens.
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Discounts for good grades
Adding a teen driver to your insurance policy can be expensive, but there are ways to save money. One way to do this is to take advantage of discounts for good grades.
Many insurance companies offer discounts for students with good grades. For example, State Farm offers a Good Student Discount of up to 25% for full-time students who maintain a 3.0+ GPA, are ranked in the top 20% of their class, or are named to the Dean's List/Honor Roll. Similarly, Progressive offers a discount for good students, which can be as high as 25% and can last until the student turns 25.
To qualify for these discounts, you will typically need to provide a copy of your teen's most recent report card or other proof of their academic achievements. It's worth checking with your insurance provider to see if they offer any discounts for good students and what the specific requirements are.
In addition to good grades, some insurance companies may also offer discounts for students who are studying far away from home or who are enrolled in certain safety programs. For example, Progressive's Snapshot® program rewards good drivers and can reveal if your teen is driving distracted.
By taking advantage of these discounts, you can help offset the cost of insuring a teen driver and keep your insurance premiums lower.
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Choosing the right car
When choosing the right car for your teen driver, safety should be the number one priority. According to the United States Department of Transportation, motor vehicle crashes are the third leading cause of teenage deaths, with the fatal crash rate per mile driven for teenagers far higher than the national average.
It is important to choose a car with modern safety systems. Look for a car with standard driver and passenger airbags, as well as side and curtain airbags for added crash protection. Other safety features to consider include Electronic Stability Control, Anti-lock Braking Systems, and intelligent seat belt reminder systems. The Insurance Institute for Highway Safety (IIHS) and Consumer Reports (CR) have also put together a list of recommended vehicles for teens that offer a high level of safety. IIHS-rated vehicles have above-average reliability scores and perform well in emergency handling and brake tests.
In addition to safety, reliability and affordability are also key considerations. You want your teen to have a dependable car, but you may not want to spend a lot of money on a new vehicle, especially as newer drivers are more likely to be involved in minor accidents. An older, used car can be a more affordable option, but ensure it is not too old that it lacks basic safety features.
When choosing a car, consider the size of the vehicle. While larger vehicles like SUVs and trucks offer more metal and weight to protect occupants in accidents, they may be too large for new drivers to handle comfortably. A smaller sedan or coupe may be a better option.
Some recommended vehicles for teen drivers include the Honda Civic, Honda Accord, Honda CR-V, Honda Odyssey, BMW 3-series, Subaru Crosstrek, and Toyota Corolla. These vehicles offer a range of safety features, good handling, and fuel efficiency.
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Raising your deductible
However, raising your deductible means that you will have to pay more if you need to make a claim. For instance, if you have a $1,000 deductible, you will pay $1,000 out of pocket before your insurance company covers the remaining cost of repairs. This means that in the event of an accident, you will have to pay more out of pocket.
You can also consider raising your comprehensive or collision deductible. Comprehensive coverage protects against damage caused by events other than accidents, such as theft, vandalism, or natural disasters. Collision coverage, on the other hand, covers damage resulting from collisions with other vehicles or objects.
It is important to note that while raising your deductible can lower your premiums, you will need to be prepared to pay more in the event of a claim. This is a trade-off that you will need to consider when deciding whether or not to raise your deductible.
In addition to raising your deductible, there are other ways to save money on your teen's car insurance. You can shop around for rates, increase your liability limits, and look for discounts.
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Pros and cons of separate policies
There are several factors to consider when deciding whether to add your teen driver to your policy or get them a separate one. Here are the pros and cons of separate policies for teen drivers:
Pros of separate policies for teen drivers:
- No impact on your insurance: Adding a teen driver to your policy can increase your premiums, as teens are considered high-risk drivers by insurers due to their higher likelihood of causing accidents and filing claims. With a separate policy, any accidents or traffic violations they may have will not affect your insurance record or premiums.
- Discounts and incentives: As an individual policyholder, your teen may be eligible for discounts that they wouldn't get under your policy. These could include good student discounts, safe driving app credits, or discounts for completing driver's education courses.
- Independence and responsibility: A separate policy can foster a sense of independence and financial responsibility for your teen. They will have their own insurance record and be in charge of their insurance payments.
Cons of separate policies for teen drivers:
- Higher costs: Separate policies for teen drivers are typically much more expensive than adding them to an existing policy. This is because they do not benefit from the discounts and savings that come with being a long-time driver with good credit and a clean driving record.
- Less coverage: Separate policies may offer less comprehensive coverage than what your teen would get under your policy. This could leave them with insufficient protection in the event of an accident or claim.
- Ineligibility: Some insurance companies do not allow teenagers to have their own policies, and your teen may be automatically added to your existing policy when they turn 16.
- Liability concerns: If your teen is not adequately insured under their separate policy, you may still be held liable for any accidents or injuries they cause.
Ultimately, the decision to get a separate policy for your teen driver depends on various factors, including cost, convenience, liability, and personal preference. It is important to weigh the pros and cons carefully and choose the option that best suits your family's circumstances.
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Frequently asked questions
Teen drivers are considered high-risk drivers by insurance companies due to their likelihood of getting into accidents. According to the Insurance Institute for Highway Safety (IIHS), teens have accident rates almost four times those of older drivers.
It is almost always more expensive to get a separate insurance policy for a teen driver. It is usually cheaper to add a teen driver to an existing policy as they can benefit from the savings and rate you have earned as a longtime driver.
Here are some ways to save money when insuring a teen driver:
- Compare quotes from different insurance companies
- Raise your deductible
- Drop non-essential coverage
- Choose the right car for your teen driver
- Seek discounts, such as good student discounts
The best time to start the insurance process is before your teen driver gets a learner's permit. Many companies allow a teen with a learner's permit to be listed on the policy at no charge until they become a licensed driver.
To add your teen driver to your policy, you will typically need the vehicle identification number (VIN) for their car, their driver's license number, and an estimate of how many miles they will drive per year.
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