Adding a Teenager to Your Policy
If there's one thing that parents universally dread, it's adding a teen driver to their car insurance policy. It is necessary, of course, as all drivers must be insured by law (except in the state of New Hampshire).
While your insurance rates will go up no matter what, there are things that you can do to soften the blow. Read on to learn more about adding teenage drivers to an auto insurance policy.
Why is it Expensive to Insure Teen Drivers?
The price of car insurance is all about the risk that the insurance company assumes by providing coverage. The less experienced the driver, the likelier they are to be involved in an auto accident.
You only need to consider a few statistics to understand why teens are considered the riskiest group of drivers to insure:
- In 2013, the AAA Foundation for Traffic Safety reported that approximately 3,000 people were killed in crashes involving teen drivers; another 400,000 were injured.
- According to the Centers for Disease Control and Prevention, teens have a higher chance of being involved in an accident during their first year of driving.
- Approximately 33 percent of teens aged 13 to 19 who died in 2010 were killed in car accidents, according to DoSomething.org (a youth advocate organization).
When Are You Required to Insure a Teen Driver?
In most cases, you only need to officially insure a teen driver once they get their driver's license. Most insurance companies automatically cover teen drivers who have learner's permits on their parents' policies. However, contact your insurance company to confirm.
How to Get Car Insurance for a Teen
Getting car insurance for a teen driver is straightforward. Simply call your insurance company and go from there. Be sure to ask about all available discounts, and have your teen's driver's license information ready to go. If you will be adding a car at the same time, have the information for that vehicle handy, too.
Adding a teenager to your car insurance will have is a big impact on your policy. Now is a good time to do a little shopping to make sure you get the best policy available to you.
How Much Will Your Insurance Go Up?
It is almost always cheaper to add a teen to your own policy as opposed to buying them their own. However, if you insure a luxury vehicle, or if your teen is itching to be financially independent, they might be better off with their own policy.
In general, adding a teen to your policy will make your rate increase by 100% to 200%. Adding a male teen driver can increase it by as much as 227%.
Saving on Auto Insurance for a Teen Driver
No matter what, you're going to pay more for insurance with a teen driver on your policy. However, there are plenty of ways to reduce the overall cost. The following discounts and policy tweaks can help save you money.
Good Student Discount
Most insurance companies will give you a nice discount if your teen driver maintains a grade point average of 3.0 or higher. According to Consumer Reports, this can save you an average of 12%, or around $263 per year.
Sticking with the same insurance company for multiple types of insurance can save you quite a bit. If you don't already have homeowner's insurance, life insurance and other coverage from the same company, consider doing so before your teen needs to be insured.
Safe Car Discount
This isn't an official discount, but the type of car that you insure drastically impacts the price that you will pay. In general, cars with higher safety ratings are cheaper to insure. They are also safer for your teen, so it's a win-win situation.
Student Away Discount
If your teenager goes away to college and doesn't bring the car with them, you may be eligible for a "student away" discount. Most companies require the student to be attending a school that is at least 100 miles away from home. You can expect to save anywhere from 5 to 10 percent with this type of discount.
Defensive Driving Discount
It may be worth it to enroll your teen in extra defensive driving classes if it means getting a good discount. Many insurance companies will knock anywhere from 10% to 15% off the price of coverage when you show that your teen has completed a state-approved defensive driving course.
Another way to reduce your overall auto insurance rate while insuring a teen driver is by raising your deductible. However, only do so if you can legitimately afford to cover the new, higher deductible in the event of a claim.
Remember, teen drivers are overwhelmingly more likely to be involved in crashes, so there is a good chance that you will end up having to cough up your deductible at some point. Also, make sure that the reduced rate is worth it.
Some insurance companies will give you a low-mileage discount if you agree to allow them to track your driving habits with a telematics device. If your teen doesn't drive much, this option could save you up to 45% on auto insurance.
The Bottom Line on Insuring Teen Drivers
There are upsides and downsides when your teen starts driving. On the plus side, you don't have to play chauffeur nearly as often. On the downside, you are understandably nervous about having a teen on the road and more expensive car insurance.
Still, it's important to remember that this is only temporary. Before you know it, your teen will be an adult, and they will be responsible for paying for their own coverage. Until then, put the above tips to work to save as much as possible on insuring your teen driver.