What you need to know about putting a teen driver on your car insurance
Wondering whether to add your teen to your car insurance policy? Let this guide help you decide. (iStock)
When your teenager gets their driver’s license, you may be wondering how to go about insuring them on the road. Ultimately, you’ll have to decide between adding them to your car insurance or purchasing a separate policy for them.
Because car insurance for teen drivers can be costly, most parents opt to add them to their own policies, which has some advantages and disadvantages.
If you’re on the fence about adding your teen to your policy, read on for a few pointers.
Is adding my teenage driver to my car insurance a good idea?
Adding your teen to your existing car insurance policy is usually the best call, but it comes with both pros and cons.
Pros
Here’s how adding your child to your policy could save you money:
- Multi-policy savings: Many car insurance companies offer discounts when you insure multiple drivers and vehicles, so you could save by adding your teen to your policy rather than buying a separate one.
- Student discounts: Your insurer may also offer discounts based on your teen’s grades and driving habits. You could also get a student discount when they're away at college.
- Policy management: By adding your teen to your policy, you’ll be able to manage your coverage and theirs all in one place.
Cons
The only real downside to putting your teen on your policy is that it increases the cost of coverage in one of the two ways below:
- Age-based rates: Because teens are statistically more likely to get in an accident that results in a claim, their rates are higher than adults.
- Vehicle cost: Adding your teenager to your policy is almost always cheaper, but that may not be the case if you drive a luxury car and your teen drives a less valuable one.
Want to know what your best option for insuring your teen is? Explore pricing and find the right auto insurance plan that fits your needs on Credible.
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How much does car insurance go up when you add a teenager?
According to a recent study from Coverage, adding a 16-year-old to your policy can lead to an approximately 130% increase in premiums, even if you don’t add another vehicle to the policy.
In most states, the additional cost is worth it, coming out cheaper than purchasing a separate policy. However, buying an individual policy for your teen could be comparable if you live in a state with exceptionally low insurance premiums.
If you're wondering how much you could save, head over to Credible who has partners to give you a free car insurance quote. It only takes two minutes.
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Does my teen need to be insured right away?
Depending on what state you live in, your teen may need to be insured when they get their permit or driver’s license. In most cases, your teen is covered by your policy if they're behind the wheel with a licensed adult in your vehicle.
While car insurance may not be required for your teen to drive with a permit, it's essential to insure them when they get their license.
Talk to your agent or a representative of your car insurance company to double-check the requirements in your state.
As you consider the cost of adding your teen to your policy, compare auto insurance companies and shop their plans via Credible.
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How long can my teen stay on my car insurance policy?
As long as your child has the same address as you, they can stay on your car insurance policy indefinitely. This is true whether they own their own vehicle or drive one of yours.
However, it may be a good idea for them to get their own policy when they reach adulthood and are responsible for their finances.
Bottom line
If your teen has a driver’s license, they need to be insured ASAP. In most cases, adding your child to your own policy is the most affordable option, regardless of how it increases premiums.
Between the discounts you could earn by combining coverage and the convenience of managing the policies, you could benefit by adding them to your plan.
As always, the best way to snag the lowest car insurance rates is to compare them for yourself. Comparing multiple insurance quotes can potentially save you hundreds of dollars per year. And it’s so easy to get a free quote in minutes through Credible’s partners.
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