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When teens first get their driver’s license, they’re usually excited and nervous in equal measures. Their parents have the same feelings — and trepidation about how much it will cost them to have a newly licensed driver on their insurance.
While car insurance for teens can be costly enough to make your eyes water, it’s not a step you want to skip. Learn about adding your child to your car insurance, including how to do it and how much it will cost you.
Is adding your child to your car insurance a legal obligation?
If your teen driver lives under your roof and will be driving a vehicle registered to you or someone in your household, they must have insurance, and usually adding them to your policy is the cheapest option.
Insurance providers require you to list all licensed drivers residing in your home on your auto insurance policy, so once your teen passes their test, you’ll need to add them. Driving uninsured is illegal in most states and has legal ramifications for anyone who is caught. Purchasing standalone car insurance is not an option for most teens because of the high cost, so adding them as a named driver on your policy is usually the best option.
Alternatively, you can add them as an excluded driver if you don’t plan to let them drive your vehicles. You’ll need to sign a document formally stating that they will not be driving any of your insured vehicles and make sure you stick to that agreement. If at any time you decide they will be allowed to drive one of your vehicles, you can add them as a named driver to your policy at that point.
Pros and cons of adding your child to your car insurance
When your child passes their driver’s test, you’ll have two options for insurance: Adding them to your policy and having them take out their own policy exclusive of yours. Although the former is usually the better option, adding a new driver to your insurance policy has benefits and drawbacks.
- Cheaper than standalone coverage: Adding your child to your car insurance costs less than them taking out a standalone policy. Some insurers may not even cover young drivers on their own policy, so adding them to yours may be the only choice.
- Convenience: It’s more convenient to add your child to your policy than to have them take out their own.
- Discounts: Most insurers offer multiple discounts that can help decrease the cost of insuring a teen driver. For example, your insurer might offer a discount if your student maintains a good GPA or if they complete a driver’s ed program designed for teams. Ask your insurer for information on the discounts they offer for young drivers.
- Increased rates: Adding your child to your car insurance can increase your car insurance premiums exponentially. If your teen can’t cover the costs, you will have to pay for them yourself.
- Liability: If your child causes an accident while driving, you could be held liable, and your insurance rates will likely increase.
What type of insurance coverage should your teen have?
At the very least, your teen driver should have the minimum amount of insurance coverage required by your state, ideally including the following types of coverage.
Most U.S. states require drivers to carry liability coverage. Therefore, your teen will need to have at least the minimum amount of liability coverage that’s required by law in your state. However, it’s a good idea to cover your teen above the minimum requirements if you can afford to.
Liability coverage helps pay for any damages or injuries your teen causes to a third party while behind the wheel. The minimum required liability insurance may not be enough if your teen causes an accident that results in severe damage or injury, and you’ll be on the hook for any costs over what your insurance will cover. Paying for additional liability coverage—or even getting an umbrella policy for additional liability protection—can pay off if you find yourself in this situation.
If you have a loan on your car, your lender will likely require any named drivers to have collision coverage. This type of insurance can help pay for damages to your vehicle following a collision with another car, and it applies no matter who is at fault. Without collision coverage, you would have to pay out of pocket to repair the damage to your own car.
Comprehensive insurance can cover fire, weather damage, vandalism, theft, damage caused by animals, and falling objects. Similarly to collision coverage, your lender usually requires comprehensive coverage if your car is financed. This type of coverage can help pay to repair or replace your car if it sustains damage in any incident that is not a collision.
When should I add my child to my car insurance?
You should add your child to your car insurance policy when they pass their driving test. However, it’s advised to notify your insurer when your teen gets their learner’s permit, even though they won’t need to be a named driver on your policy. This way, the insurance company will be aware that you’ll be adding your child to your insurance policy sometime soon, so you can avoid any gaps between your child passing their test and being able to drive your vehicle legally.
When should my child get their own auto insurance policy?
There’s no one answer to the question of when your child should get their own car insurance policy, and the age will differ for each family. If your child lives with you and drives your vehicle, keeping them on your policy is advisable. However, once they move out and have a car of their own, it’s likely time for them to take on the burden of car insurance. Similarly, if they get married or have children, it’s probably better for them to take out their own policy—even if they still live with you.
How to add your teenager to your auto insurance policy
If your teenager is nearing driving age, it’s a good idea to be proactive and research insurance options. Once the time comes for you to add your teen driver to your auto insurance policy, follow these steps.
Step 1: Call your insurer.
Contact your insurance company to let them know that your child is in the process of getting their license. Even if they only have a permit, notifying your insurer will help decrease the likelihood of a coverage gap between when your teen passes their driving test and when they are covered under your insurance.
Step 2: Get a quote.
Ask your insurer for a quote to see how much it will cost to add your child to your auto insurance policy. Make sure the quote is for coverage with high liability limits.
Step 3: Shop around.
Get quotes from several other insurers to compare premiums and coverage to determine which option works best for your budget and coverage requirements.
Step 4: Add your teen to your policy.
Once your child passes their driving test, immediately contact your insurer and add them to your policy. Remember to ask if you qualify for any discounts that can help reduce your insurance costs.
Step 5: Re-shop annually.
Compare rate quotes from several insurance providers each year when it’s time to renew your policy—this can help keep your costs as low as possible while maintaining adequate coverage for you and your teen. To make the process easier Marble lets you store all your insurance information, including important documents, in a digital wallet. Best of all you earn points in Marble you can redeem for gift cards.
To what extent does my auto insurance cover my child?
When your child first passes their driving test and still lives at home, adding them to your policy is usually the best option. The extent to which they are covered depends on the type and amount of coverage you have on your policy.
Once they move out, they’ll need to get their own auto insurance policy, unless they’re moving out to attend college. In this case, you can keep them on your policy but take advantage of a discounted rate while they’re at college since they won’t be driving your car.
What is the full coverage rate for teenagers?
The cost to add a teen driver to your insurance can depend on several factors, including your location, your insurer, and your teen’s age. Insurance rate data from Insure.com lists the national average cost of insurance for an adult driver as $1,447—that increases to an average of $3,775 with a teen driver added, which accounts for a national average percentage increase of 161 percent. The following table shows the average cost you can expect to pay for insurance with and without a teen driver and the average percentage increase by state.
|State||Annual Cost (Adult Driver Only)||Annual Cost (Including Teen)||Average Percentage Increase|
District of Columbia
How to get a good deal on teen car insurance
Although car insurance for teen drivers is expensive, there are several ways to lower the costs by asking about discounts. The most common discounts for young drivers can lower premium rates if the student maintains good grades or attends a driver’s education class intended for teens.
Good student discount
Many insurers offer a good student discount that lowers the premiums for young drivers who are full-time students and can maintain a good grade point average. The exact GPA they need to maintain will vary by insurer, so make sure you ask for details when adding your teen to your policy.
Driver training discount
Your insurer may offer you a discount if your teen has taken a driver training course or if they sign up for and take a defensive driver course. This continuing education can help your teen learn how to be a safe and responsible driver, which lessens the likelihood that they will cause an accident.
Your insurer may offer a discount if you sign up for its monitoring program. You’ll install a smart device that tracks your mileage and provides tips and advice on how to drive more safely. Ask your insurer whether they offer such a program, and if so what the requirements are.
Family plan discount
You may be able to get a discount if your child aged 21 or younger still lives at home and is on your insurance policy. Alternatively, if your teen wants to get their own separate policy, they may get a discount if they purchase a policy with the same provider you use.
Student away discount
Students who go to college far from home (typically 100 miles or more) can get a car insurance discount if they will not be driving while at college. This way, they can still drive your car when they are home for short visits or holidays.
Our expert recommendation
In most cases, adding your child to your car insurance is better than having them take out their own independent insurance policy. Although it’s expensive either way, adding your teen to your insurance policy is much cheaper. In addition, you can ensure that they have adequate liability coverage during their first years as a licensed driver if they are found at fault for an accident.
Frequently asked questions (FAQs)
Do you still have questions about adding your child to your car insurance? The answers to the following frequently asked questions can further your understanding of this topic so you can make the best decision for your family.
Does my child need to own a car to have insurance?
No: if your child is driving any vehicle, they must have insurance coverage. It doesn’t matter who owns the car; many new drivers will drive a parent’s vehicle when they first pass their test as they may not have the funds to purchase their own vehicle.
How can I get cheaper insurance after adding a driver?
There are several ways you can get cheaper car insurance after adding a driver, including the following:
- Ask about discounts, such as a good student discount or a defensive driver discount.
- If your driving is primarily local and under 10,000 miles per year, ask whether your insurer offers a low-mileage discount.
- Shop around to see if you can get cheaper rates for similar coverage levels through another insurance provider.
- Choose a safer car, such as a sedan, minivan, or SUV.
- Increase your collision deductible to lower your monthly premium (just remember that your out-of-pocket expenses will be higher if you make a claim on your car insurance).
What happens if I don’t add my teenager to my car insurance?
If you don’t add your teen driver to your car insurance and they are in an accident or pulled over, they can get in serious trouble. At the very least, you will have to pay out of pocket for any third-party property damage or injuries caused by an accident for which your child is found at fault.
Can you exclude the teen driver from the parents’ policy?
Yes, but only if you do not plan on letting your child drive a car. You can officially exclude them from your policy once they pass their test, but if they drive your vehicle, they will be considered uninsured.
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