Everything You Need to Know About Car Insurance for Teens

Everything You Need to Know About Car Insurance for Teens

October 17, 2018

Having a child reach driving age is a significant milestone for everyone involved. Your teen is growing up and taking on all kinds of new independence, and you’re dealing with all of the stress that comes with watching that happen. As a result, you might be wondering what your options are when it comes to car insurance for teens.

Because they’re new to the rules and routines of the highway, teenage drivers are categorized as one of the highest risks on the road, and auto insurance companies charge appropriately to compensate. You can always expect to see your car insurance costs jump when you add someone to your policy, but be prepared for a particularly steep spike if that someone is in high school and still needs to be reminded to use their blinker.

In many ways, it’s a necessary evil and not one that you’re going to be able to avoid: kids are expensive, and they don’t stay kids forever. If you know what you’re doing, however, there are plenty of tricks to minimizing cost while ensuring that your growing family behind the wheel stays well protected.

Should my teenage children have their own car insurance policies, or should I add them to mine?

We’ll get this simple question out of the way first because it’s going to be pretty cut and dry for most families. Unless your child started a well-paying job early or you’re willing to dish out some serious cash on their behalf, it’s going to be far cheaper just to add them to your existing policy than get them their own. On average, you’re going to save a good $3,000 or more by sharing car insurance; even in Hawaii, the state with the smallest difference between individual and joint policies, a teenager is going to shave off a good $1,000 per year from their costs. When you’ve got college, apartments, and first-time cars looming just over the horizon, too, every little bit that you both can save is important, and this is a big way to keep the bills minimal.

How do I add my teenager to my auto insurance policy?

Assuming you’ll be taking that route and adding your child to your car insurance, here are some steps that you’ll want to take before they start revving the engine:

Add your teen to your car insurance policy at the right time.

The “when” of including a teen to your policy can vary from company to company: some will require they’re added once they have their learner’s permit, and others will have you wait until they get their license. It’s important to check before your kid starts driving, since they may not be covered if they get in an accident before they’re officially attached to your account. Some auto insurance companies have a drop-down provision that limits, or entirely excludes coverage for those not officially on the books, so be vigilant!

Choose appropriate coverage for your teenager.

With teens, you want to go big on your amounts. High liability limits are a good idea as a roundabout means of protecting yourself financially: Due to teenagers’ classification as high-risk drivers, an injured party would come after your assets, not theirs, should they cause an accident. It’s a pricey thing to do, but if you also raise your deductibles (the amount you have to pay yourself before the company will pay out), your premium (the amount you pay for the policy itself) will go down, balancing out your total costs.

Look for discounts on car insurance for your teenage children.

Plenty of deals exist to help you lower your payments, but you have to be proactive and seek them out. Ask your auto insurance agent to review discounts for you and your teenager to find out what you can qualify for, as they aren’t typically added automatically to your rate. Remember to take the initiative before your next payment rolls around!

Discounts on car insurance for teens are available and might help you save a substantial amount of money.

  • You may save up to 10% if your teenager takes an approved driver training course.
  • Discounts could be between 10% and 25% if your teen earns good grades, such as maintaining a GPA of 3.0 or higher, making the dean’s list and/or honor roll, and scoring highly on standardized tests.
  • You could net another 10% or so if your teenager attends school at least 100 miles away, and they don’t have their own car. Plus the policy still covers them when they’re at home during breaks.

Also, don’t forget how discounts from your own driving can help your overall bill. Your record may determine whether you get some kind of loyalty or bundling deal, so be sure to routinely check with your agent for your own umbrella benefits, too.

Pick the Right Car for Your Teen Driver.

Finally, you want to plan how your car insurance ties your child to an existing or new vehicle for the best financial outcome. If they’ll be driving a car that you already own, add them to the oldest, least expensive vehicle to minimize the added cost. If they’re getting a new one, go for a pre-owned, older model, and/or look for one that has a high safety rating and useful features like stability control. Generally, a bigger, slower car is going to be the best option and get the lowest quotes.

Auto Insurance for Teens is a Necessary Expense

Putting a fledgling teenager on your car insurance policy is going to be costly, no matter how you look at it, but it’s a stepping stone that every family has to face sooner or later. And as with most aspects of parenting, there’s only so much you can control: teach them what’s important, give them advice when they need it, set up a safety net just in case, then let them out in the world to do the best they can. With some smart planning and due diligence, you’ll be able to keep a firm hand on that safety net and still afford those weekly Thursday pizza nights with the kids.

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