Car Insurance for Drivers With a Learner's Permit
Getting a learner's permit is an exciting time in a teenager's life—and often a scary one for the parents. A teen's first few times out on the road can be unpredictable.
Even though the highest risk period for an accident comes right after a teen starts driving on their own, that doesn't mean the permit period is risk-free. This means it's not only important to teach a young driver the laws of the road but also to make certain they are properly insured.
What Is a Learner's Permit?
In every U.S. state, a young driver learning to drive must first get a learner's permit in order to begin the learner stage. This is the first stage of a graduated license program, and the driver must usually hold their permit for anywhere from four to 12 months and drive a minimum number of hours under adult supervision. During this phase, the learner is limited to driving with other family members or approved adults over the age of 21.
Because this period marks the first time this person has driven family vehicles, it naturally raises questions of what these means for your insurance.
Rule No.1—Car Insurance Follows the Car
This is one of the fundamental rules of car insurance: The insurance follows the car, not the driver. If the car is insured and the driver is not excluded, the driver should be covered.
You should definitely have any cars that are driven by anyone in your household—including those with learner's permits—insured. Your permitted driver will, in many cases, be automatically covered under you supervision. However, to be certain, you can add them as an operator on the policy. This will usually not increase your rates until they have a license to drive without your supervision.
Excluded drivers are not covered on the car insurance policy. In order for a driver to be excluded the named insured, who is often the owner of the vehicle, needs to sign a form indicating and agreeing that the said driver is excluded. If the driver does drive the vehicle and is in an accident, the car insurance policy will not provide any coverage.
Specifics Vary by Insurance Carrier
Most insurance carriers want you to have the permit driver listed on the car insurance policy as a permitted driver. Often a driver with a permit will have a cheaper rate than a newly licensed driver. A permitted driver may not cost you as much as you might think.
Some insurance carriers do not even have the ability to list a permit driver as a driver. A valid driver's license may be required. The permitted driver will be automatically covered under the policy of their parent.
Save Money on Young Drivers
All young drivers cost quite a bit to insure, simply because their inexperience has been proven to lead to four times as many accidents as drivers over the age of 20. There are still some ways to save money as your young driver begins to hit the road on their own, though.
The best cost savings options are the good student discount and not letting them have their own vehicle. In this situation, most insurance carriers allow you to list a young driver as a secondary driver, which can save a lot of money.
Having your teen get their first job and pay for their share of the car insurance policy can alleviate the financial burden of adding them as an operator.
Call Your Car Insurance Agent or Carrier
Car insurance is not something about which you should guess or make assumptions. Calling your agent and being forthcoming about your situation is the best way to get the best insurance coverage available. Trying to hide young drivers or other issues that you know could negatively affect your policy premiums can cause you a lot of problems in the future.
Remember, the purpose of car insurance is to provide coverage for damages after a loss. Paying a lower rate only to wind up with zero coverage is not going to help in the long run.
National Institutes of Health. "Teen Crash Risk Highest During First Three Months After Getting Driver’s License." Accessed Sept. 21, 2020.
Insurance Institute for Highway Safety. "Graduated Licensing Laws by State." Accessed Sept. 21, 2020.
American Family Insurance. "Does Car Insurance Cover Other Drivers?" Accessed Sept. 21, 2020.
State Farm. "Car Insurance for Teens and New Drivers." Accessed Sept. 21, 2020.
Insurance Institute for Highway Safety. "Teenagers." Accessed Sept. 21, 2020.