The Ultimate Car Insurance Guide For Teens
So, your teen is about to become a licensed driver and naturally, you’ve got a few questions and concerns. But fear not, Life360 is riding shotgun with you as you navigate this major family milestone.
Questions Parents Should Ask About Teen Car Insurance
This is the start of an ongoing convo about teen drivers, safe driving, and car insurance for families. To kick things off, we’ve rounded up great tips and resources for teens and parents, and we’ll address common questions like:
- Do you have to add your teen to your car insurance policy? And if so, when? Once they have their learner’s permit or only after they get their license?
- How will adding them to your policy affect your rates, and what discounts can save you the most now that your policy is changing?
- But, wait: should you even add them to your policy? Or is it better to ask them to get their own policy? You’ve heard that it’s cheaper to simply add them, but is that always true?
- How do you keep your teen safe — not only from their own driving inexperience, but also from the challenges of different driving conditions?
Do You Have to Add Your Teen to Your Car Insurance Policy?
The laws of each state on this issue vary. Generally, though, when your teen only has a learner’s permit, your insurer won’t add your teen to your policy, and your insurance rate won’t change.
Remember, too, that car insurance generally follows the car and not the driver or policy-holder. Thus, your car remains covered when your teen drives it with their learner’s permit.
Your teenager is now licensed. (Congrats! Breathe!) Should you add them to your policy, or ask them to get their own insurance?
While you likely won’t face any car insurance changes when your teen obtains their learner’s permit, once they have their license, you have a car insurance decision to make.
If your teen doesn’t have a car and plans to continue to borrow a car that is covered on your policy, then you should call your insurer, and they will likely require you to add your teen to the policy.
Heads up: If you don’t inform your insurer of the newly licensed driver in your household, your insurer may view this omission as fraud that nullifies your coverage.
If your teen has their own car, then you have to decide whether to add that car to your policy (along with notifying the insurer that your teen will be the primary driver of the car) or to have your teenager purchase their own car insurance policy.
Car Insurance Policies for Teens
Some families choose to have their teen secure their own car insurance policy to teach them responsibility. But you could also teach your teen about the expenses of owning a car by adding them to your policy and having them pay the difference between your old and new insurance rates.
On average, adding a teenager to your policy will result in a 130% rate increase, which on average would translate into a $4,000 price hike.
In comparison, if a teen gets their own policy, that may cost as much as $6,000 to $10,000 per year.
Adding a Male Teen Driver to Your Insurance Policy
Bear in mind as well that adding a male teen driver will result in a greater rate increase than a female teen because male drivers are a higher risk to the insurer. Teen males tend to drive more recklessly than female teens. In fact, CDC data from 2018 revealed that the motor vehicle death rate for male drivers who are 16–19 was almost two times higher than the death rate for female drivers of the same age.
Another factor to consider is that if you add your teen driver to your policy and he or she gets into an accident, your rate could increase substantially.
How to Minimize the Cost of Adding a Teen Driver to Your Policy
Regardless of whether you add your teen to your policy or your teenager gets their own policy, there are several factors within your control or your teen’s control that can minimize the cost of car insurance:
1. Buy a Used or Inexpensive Car for Your Teen
Newer, more expensive cars cost more to insure (no matter who’s behind the wheel) because they’re worth more. Thus, if your son or daughter drives a used, inexpensive car, it will cost less to insure it under either a new or existing policy.
In addition, cars with anti-theft features, safety features, and high safety ratings tend to be less expensive to insure.
2. Drive a Used or Inexpensive Car Yourself
If you drive an expensive car, adding your teenager to your policy may be more expensive than having your teen obtain their own policy for a safe, inexpensive car. That’s because when you add a teenager to a policy that covers, say a Mercedes SUV, the insurer is covering your teen for driving that car.
3. Improve Your Teen’s Grades
Many insurers offer discounts for students who meet a certain threshold GPA (often, 3.0 or above) or who are attending college. Proof of these circumstances is usually required by the insurer.
4. Have Multiple Cars on Your Policy
Some insurers offer a multi-car discount. That said, this discount may not be enough if one of the cars is a luxury car. If that’s the case, having a separate policy for your teenager might cost less.
5. How Safe Your Teen Drives
Many insurers offer a discount for the mere act of signing up for an app that will monitor covered members’ driving. How safely your teenager and other covered members drive will then determine whether you receive further savings.
These apps typically monitor driving speed, quick acceleration, distracted driving, hard braking, and fast cornering.
6. How Much Your Teen Drives
Some insurers offer a pay-by-mile policy or a discount for a low total annual mileage.
7. How Many Factors Are on Your Side
Car insurance discounts can typically be combined. So, if your teen has good grades, a safe car with anti-theft measures, drives safely and infrequently, and his or her car is part of your multi-car policy, you may be eligible for multiple discounts.
However, most insurers cap the total percentage discount, so unfortunately, there is no combination of factors that will get your insurance down to zero.
How to Find a Cheap Teen Car Insurance Policy
We’d love to tell you that there’s a one-size-fits-all insurer that’s a perfect fit for all families. But as the saying goes, When it comes to insurance, you have to shop around.
Once you identify a couple offers, you should contact each insurer to verify that you’re getting all available discounts because not all discounts are automatic.
You might also be able to combine home and auto insurance to obtain additional savings.
Keep Your Teen Driver Safe with Life360
Your teen is licensed, insured, and ready for the freedom of the road.
Meanwhile, you’re ready to lose sleep at night, wondering whether they’ll be responsible, where they’ll go, and which of your teen’s friends might convince them to do donuts in an empty parking lot.
To put your mind at ease, you can use Life360’s Driving Safety features to monitor your own and your teen’s driving behaviors. See a detailed view of each family member’s driving habits with info like top speed, phone usage, hard braking, and more.
In addition, Life360’s free Crash Detection service can protect your teen on the road by automatically detecting collisions the moment they happen and notifying family members and emergency contacts. With 24/7 Emergency Dispatch available in Life360 Gold and Platinum, we’ll send an ambulance to the vehicle’s location if we don’t get a response or help is needed — whether your teen is the driver or passenger.
You can also have your teen sign a driving contract, with your teen agreeing to safe driving habits and practices in exchange for you allowing them to drive (or helping with expenses).
The CDC provides a great model agreement you can download and adapt as necessary.
With both the Life360 app and an executed driving agreement, your son or daughter will begin developing good habits that will serve them throughout their driving lives.
Another fun idea is to start a Perfect Drives challenge with your teen. For every week or month that your teen drives with no events detected by the Life360 app, you can reward them with a small gift card or money for gas.