Should You Add Your Teen Driver to Your Car Insurance?

Should You Add Your Teen Driver to Your Car Insurance? Here’s Why You Should Consider It

If you have a teen, chances are they are eager to get behind the wheel.

In addition to mentally preparing, you will need to financially prepare. This includes determining how much it will cost to add your child to your car insurance policy.

Adding a teen driver to your car insurance policy, whether it's your first or third, can be costly. Teen drivers have the highest insurance rates of any group, but there are ways to save.

How Much Does it Cost to Insure a Teen Driver?

When a driver shops for car insurance, specific factors such as driving record, marital status, and credit history typically play a large role in determining how much those rates will be. However, because a teen driver is unlikely to have much experience in any of these areas, you must consider other factors.

According to the Insurance Information Institute, the type of car you drive and how frequently you use it can have a significant impact on your car insurance rates. Expect to pay much more for car insurance if your teen drives a newer car than if he or she drives a cheaper, used model.

Do I Have to Add My Teen Driver to My Car Insurance?

No. You are not required to include your child on your car insurance policy. However, it will be less expensive than getting the child their own policy. “Adding a teen driver to your car insurance is not required, but it is more cost-effective,” says Melanie Musson, a car insurance expert for CarInsuranceComparison.com.

“From the moment a student driver gets behind the wheel, parents should know whether the child is covered under their plan or if they need to be added,” Musson says. “If a child causes an accident, the parent's insurance company will be liable for any damages.”

When adding a teen driver to your car insurance policy, make sure you know who owns the vehicle. Keep in mind that if your teen owns a car, they will be unable to be listed on your policy and will need to obtain their own.

However, if a teen is covered by a parent's policy, they can keep it as long as they live in the household and drive one of the family cars.

As with any driver, it is always best to carry the bare minimum of insurance required by the state. Driving without insurance is against the law and can result in serious legal and financial consequences.

Insure Under Your Policy

Adding your teen to your insurance policy may make financial sense. “If you compare the premium increase that adding a teen driver would cause to a parent's policy with the cost of an independent policy for that same teen driver, you'd see that it's cheaper to get on the parent's policy,” Musson says.

According to Carinsurance.com, adding a 16-year-old female driver to a parent's full coverage policy costs $1,593 per year. It costs approximately $651 per year to add minimum coverage for the same teen.

The cost of adding a male is slightly higher. The average bill for adding a 16-year-old male to a parent's full coverage policy is $1,934 per year, with an additional $769 for minimum coverage.

Teen male drivers are 129 percent more expensive than female teen drivers, who are 107 percent more expensive. Even so, adding a teen to a parent's policy is significantly less expensive than getting the teen their own policy.

Teen Getting Their Own Policy

A 16-year-old driver can expect to pay $6,930 on average for full coverage car insurance.

The average annual rates for 16-year-olds, 17-year-olds, and 18-year-olds with their own policy are shown below.

Non-owner Car Insurance 

Non-owner car insurance protects drivers who do not own a car but rely on rental cars, ridesharing, and borrowed vehicles to get around. While non-owner insurance may be appealing for your teen, parents should be aware that insurance companies will not write a policy for drivers who have access to the family car.

Discounts For Teen Drivers

There are ways to reduce the costs of auto insurance for teens. “While we've always known that good grades can lead to scholarships and other educational opportunities, having a 3.0 GPA can also lead to good student discounts,” says Lauren Fix, an automotive expert for Car Coach Reports, a news site for the automotive industry.

Although it varies depending on the insurance company, good students can save up to 25% on their car insurance rates.

Attending a safe driving course is another often-overlooked way for everyone, not just teen drivers, to save money on car insurance. Defensive driving classes are available at local driving schools, or drivers can contact the National Safety Council or AAA to find schools in their state.

Again, insurance company rates vary, but expect to save 10-15% on your teen's car insurance if they take one of these approved courses.