Teen Driver Auto Insurance
The time is finally here! After months of practicing in the parking lot, struggling with the clutch on hills and hanging on for dear life as your kiddo nervously merges into highway traffic, it’s time to hand over the keys.
We know what you’re thinking – the only thing scarier than riding shotgun with a new driver are the insurance premiums! Up until now, you’ve probably been focusing on just making sure they keep it between the lines, but the time has come to add them to your auto policy and maybe add a car for the new driver. No doubt, adding a teen driver is costly, but there are some ways to save and some potholes to avoid! The best rule of thumb, though, is that the safer and more responsible your teen drives, the less you’ll spend on insurance.
Having a teen driver hop in the driver’s seat for the first time probably sparks a lot of questions in your mind, especially about safety and cost. The more questions you have, the more difficult it may seem to let your teen driver out on the road. Well, QuoteSavant has answers.
You can also check out our Teen Driver FAQ’s section and resources like articles and training materials to help you safely get your teen driver out on the road. Learn how to get the best value for your insurance dollar, how to monitor your teen’s driving and tips for talking to them about responsible driving.
Best policy. Best Protection. That’s our goal!
Teen Driver FAQs
New drivers cost much more to insure than experienced drivers.
According to the CDC, drivers aged 16-19 are three times as likely to be involved in a fatal crash as drivers aged 20 and older.
Additionally, when credit information and driving history are not available, the insurance company can’t tell whether your teen is a responsible or high-risk driver. This often results in higher-than-expected premiums for your teen.
This varies by state and insurance company, but typically, you do not need to add your teen to your policy until they are a fully licensed operator. However, most insurance companies now require all licensed operators in the household to be listed on the auto policy with few exceptions, so once your teen is licensed, you will most likely be required to add them to your auto policy whether they are regularly driving a vehicle or not.
We have several recommendations that can be used to reduce your insurance costs when adding a new operator:
- Purchasing the right vehicle – See our questions on what type of vehicle is best below.
- Telematics – Most insurance companies provide a discount in exchange for using a driving monitoring app. These apps track driving behaviors such as aggressive driving, phone usage while driving and miles driven late at night from midnight to 4 a.m.
- Increased Collision Deductibles – Collision coverage will most likely be the most expensive coverage on your policy for your teen driver. Increasing your collision deductible to $1,000 or more, or forgoing this coverage altogether, could provide significant savings.
- Teen Driving Courses – Some companies will provide a discount if you complete additional driver training. Please work with your agent directly to verify this discount availability and eligibility.
- Good Student Discount – Most carriers provide a discount for teens that maintain a B average or better. You may be required to provide a report card as proof.
- Student Away at School Discount – Some carriers will provide a significant discount if your teen attends school more than 100 miles away and does not have regular access to the vehicle.
- Pay-in-full – Insurance companies commonly provide incentives to pay all of part of the year’s premium up front. This can provide significant savings without reducing any coverages.
There are a lot of options when it comes to selecting a vehicle for your teen driver. Here are some things to consider:
- Car Class – The class of car and power-to-weight ratio makes a difference. Most sports cars, two door coupes or heavy, high-powered trucks are going to be more expensive to insure than a four-door sedan, crossover SUV or small truck. Selecting smaller engine options with less horsepower will help keep your rates down.
- Replacement Cost – One of the main drivers of insurance costs is going to be the overall value of the vehicle. Purchasing a used vehicle with a lower overall replacement cost can make a big difference. As a general rule of thumb, the lower the price of the car, the less it will cost to insure.
- Safety Features – While it’s generally best to find an affordable vehicle, safety features such as automatic-emergency braking, blind spot warning indicators and safety sensors will help keep your teen safe as well as save you money on your insurance. Whichever vehicle you choose, we recommend that you get quotes for your insurance prior to purchasing the vehicle. This will help avoid some of the sticker shock that comes with adding a teen driver.
Due to the high frequency of fatal accidents involving young drivers, we strongly recommend that you maintain liability limits of at least 100/300 or higher. Ideally, any family with young drivers on their policy should carry liability limits of 250/500 and purchase an umbrella policy of at least $1 million. Additionally, we highly recommend adding an accident forgiveness program to your policy if you qualify. It is very likely that your teen driver will have a collision within the first two years of driving, and filing that claim can significantly increase your premiums for up to five years. We recommend choosing this option even if it costs slightly more to add.
Some less critical coverages that you could consider reducing or eliminating to save costs include:
- Collision Coverage – Consider raising your deductible to $1,000+ or removing the coverage altogether if the vehicle is paid off. This will likely be the most expensive coverage for your teen driver.
- Rental Coverage – If your teen has other means of travel while they are without a vehicle, then you might consider forgoing rental coverage.
- Towing & Roadside Assistance – Most carriers will still allow you to use their roadside assistance services even if you haven’t purchased the coverage. You would just pay out of pocket for the expense when you use it as it wouldn’t be covered by your auto policy. You can also purchase roadside assistance coverage from another party that might be cheaper overall.
There are a few things that you can do as a parent to help with the transition, but most important is to help your teen avoid costly accidents in the first place. Maintaining a clean driving record is critical to keeping your costs down. Here are some tips:
- Talk to your teen – Teens whose parents lay out clear rules for them are significantly less likely to be involved in an accident. This means setting clear expectations for how late they are allowed to be out driving, how far they’re able to drive, access to major highways, phone usage while driving and number of passengers allowed in the vehicle at one time. We recommend the CDC Teen Driving Contract template.
- Take driver training seriously – Your teen driver is at risk any time they are behind the wheel, and that shouldn’t be taken lightly. Don’t just “go through the motions” when it comes to driver training. If you feel your teen needs additional instruction, take the time to make sure that they get it. State driving exams and programs provide just the bare minimum training needed to operate a vehicle, but might be insufficient to get your teen fully prepared to drive on their own. Even after they are licensed, it is wise to pursue additional driver training through online programs or to require only adult-supervised driving for the first 90 days or until the teen demonstrates the proper behaviors behind the wheel.
- Model good driving behaviors – Teens listen better when their parents follow the same rules that they’re being given. Avoid speeding and aggressive driving, hard braking, tailgating and distracted driving.
- Monitor their driving – Enrolling in a telematics program will give you unprecedented insight into your teen’s driving habits. Make sure that you check these apps regularly for rapid acceleration, hard braking, etc.
- Avoid speeding tickets and moving violations at all costs! – Not only will you have to pay costly fines and take time out of your day to attend court hearings, but your insurance rates are also almost guaranteed to go up at renewal. If you or your teen do receive a citation, most states offer programs designed to keep these violations off your record in exchange for taking a safety course or completing a probationary period without receiving any other violations.