Having a teen driver in the family can be stressful for a number of reasons, including the cost of adding them to your insurance policy. Teen drivers are generally more expensive to insure than adults.
According to the Insurance Institute for Highway Safety, the risk of a car crash is higher among 16- to 19-year-olds than among any other age group. Per mile driven, teen drivers in this age group are about three times more likely to be in a fatal crash than individuals 20 years or older. Because of the increased risk, the cost of your car insurance policy can skyrocket with a teenager involved.
Learn how to get a newly licensed driver insured, what factors impact insurance costs, and how to save on car insurance for teens.
- In most cases, car insurance automatically extends to young drivers. If an accident occurs, the vehicle owner's policy will cover the loss.
- The cost to add a teen to an insurance policy can be high due to their lack of driving history and experience. It also varies based on several factors.
- Adding teens to a parent's policy, sharing a car, and maintaining good grades can all help lower car insurance costs for young people.
Adding a Teen Driver to Your Policy
Car insurance varies not only by state but also by insurance carrier. Adding your teen to your policy, though, will cost more than adding an experienced adult driver.
Generally speaking, car insurance automatically extends to young drivers. If a teen driver is in a car accident, then the vehicle owner's policy will cover the loss. Some insurance carriers are stricter. They want the permitted driver to be listed on the policy in order to be protected.
To know what your insurance carrier requires, call and speak with your car insurance agent. The earlier you talk to them about the process, the better you can prepare.
Although having a teenager on an insurance policy is expensive, most states require all drivers within a household to have auto liability insurance before they can legally drive. By having auto liability insurance, everyone operating the vehicle will be protected for medical, vehicle repair, and other costs when the policyholder is at fault in an accident.
A student driver is covered by their parents or guardians' policy as a household member. Once they receive their license, though, they will generally need to be listed as an operator on the policy, depending on the state. Once licensed, you will then most likely be contacted by mail, telling you it's time to add the driver to the policy. If you ignore the notices, the insurance carrier might not renew your policy or it might require you to exclude the driver from the policy.
Some states allow you to pay a fee to drive without car insurance. In Virginia, for example, you can pay a $500 fee to register as an uninsured motorist. An uninsured motorist is fully liable if they're in an accident. This makes it an unwise choice for teen drivers, who are more likely to be in accidents than adult drivers.
How Much Does It Cost To Insure a 16-Year-Old?
There is no single rate for insuring a teenage driver. Several variables will impact the cost of insurance, including:
- Your insurance carrier
- Your state
- Whether you qualify for discounts
- The teen's age and gender
- Any history of auto accidents from learning to drive
- Vehicle type and age
- Whether or not the teen has their own vehicle
The fastest way to get the numbers you need to properly budget for a 16-year-old driver would be to call your insurance agent.
Why 16-Year-Olds Cost More
Insurance companies set the price for auto insurance using several factors, many of which are impacted simply by your teenager being a teenager. Companies consider how many years you've been on the road, your accident and violation history, and the location of where your car is generally parked. With a young person on your policy, the price often becomes much more expensive.
A driver's experience has a big impact on the cost of your policy. Driving a vehicle well takes most people years of practice. For a young driver, there is no history showing that they are a safe one. Teens are considered to have a high risk of filing a claim.
It's important to note that most insurers often ask for your gender to calculate your household rate. Research indicates that, in general, males are more likely to drive under the influence, get into car accidents and, specifically, get into serious car accidents. In 2020, the vehicle death rate for male drivers ages 16 through 19 was more than two times higher than the death rate for female drivers of the same age.
Good driver status can only be earned with time. Rates can come down incrementally over time, depending on your insurance carrier. Age 25 is when insurance rates tend to go down noticeably.
Common Driving Mistakes Teens Make
Teen drivers tend to get in more accidents because of their lack of experience. They are often prone to making certain new-driver mistakes.
- Tunnel vision: A nervous driver may focus too much on the vehicle in front of them. It's important to scan for possible dangers when driving. The ability to scan is a skill learned over time. Teens tend to have tunnel vision and stare straight ahead, missing potential dangers like pedestrians, animals, and merging cars.
- Distracted driving: Distracted driving can be as dangerous as impaired driving. Cell phones and friends can be distracting to teen drivers.
- Speeding: Statistics show that when it comes to teens in deadly car accidents, speeding is often a factor.
Reviewing these common mistakes with your teen can help them be a safer driver.
The car you choose for your teen driver also impacts your insurance rates. To keep car insurance costs affordable, select a safe, slightly older vehicle, like a four-door sedan or sports utility vehicle with multiple airbags. A brand new vehicle will cost more to insure, even if it has more safety features than a used one.
How To Save Money on Car Insurance for Teens
While car insurance for teens can be pricey, there are a few ways to save. Many insurance companies outline tips, as well as deals, that may help to lower the rate for insuring your teen driver.
Go On a Parent's Policy
Rather than getting their own policy, it's typically best for a teen to be added to a parent's policy. Parents have access to more discounts, including multi-policy and multi-car discounts.
Share a Car
Having fewer cars under one policy than drivers is a huge money saver. Many car insurance carriers will allow the teen to be added as a secondary driver. As a secondary driver, this person is considered to not have primary access to a vehicle, and this can help you pay a lower rate than the primary driver.
Get Good Grades
Insurance companies use a lot of rating factors, and statistics show that students who are responsible at school are often responsible behind the wheel. Because of that, many insurance carriers reward teenagers who are good behind the wheel with a good student discount. Discounts can be based on merit, the results of a driver's education course, or if they travel more than a certain distance to and from school. State Farm, for example, allows policyholders to save up to 25% if the teen within the household gets good grades, and the savings can last until they are 25 years old.
Frequently Asked Questions (FAQs)
Should I put my 16-year-old on my car insurance?
Car insurance follows the car, not the driver. If your teen occasionally drives your car with your permission and gets in an accident, your insurance will be the policy that pays for the damage up to your policy's limit. However, most insurance carriers have rules requiring that members of your household who regularly drive your car be included on your policy or specifically excluded.
What happens if my teen is excluded from my insurance policy?
If you exclude a driver from your insurance policy, then your insurance will not cover them if they have an accident while driving your car. This is true even if you have given them permission to drive your vehicle.
Is it better for my teen to get their own insurance?
If you don't want to add your teen driver to your policy, they can buy their own insurance. However, it will be much more expensive than adding them to your policy as an additional insured driver.