Sooner or later, your teen will want to learn to drive, and your apprehension is understandable. Your child will be put at risk each time he or she takes control of a car. And not only will you see your car take off, but you will see your insurance premiums take off too. Adding a teenage driver to your policy will increase your premiums by at least 50% for a female and 100% for a male, irrespective of your good driving record.
Those higher premiums will likely remain until your child reaches age 25, regardless of who is paying. But you’re generally better off keeping your teen on your policy, rather than getting them an individual policy. In any case, insurance companies require a person to be age 18 or older before they can obtain individual insurance, so adding your child to your own policy is usually the only way to insure a teen driver when they first start driving.
Still, you should only allow your teen to drive if you think that he or she is responsible enough to do so, and not simply because a minimum legal age to drive has been reached. If your teen has proved to be irresponsible in other areas of daily life, then he or she will be irresponsible behind the wheel of a car. And given what a car can do, especially at speed, that is a recipe for regret.
Car insurance is very expensive for teen drivers due to their high accident rates. According to data collated and published by the CDC:
Teenage drivers, particularly teenage males, are more likely to:
When it’s time for your teen to learn to drive, be sure to notify your insurance company and discuss your options. Do not let your teen drive until you are confident you have sufficient coverage in place. Below are some items to consider:
If possible, list your teen as an "occasional use driver" and you may save up to 30%. Insurance companies have varying eligibility requirements for this discount. Typically, it means the occasional driver cannot use the car more than 25% of the total time it is driven. You will probably also need to ensure you have fewer vehicles than licensed drivers on your policy to qualify.
If your child is away at college, you may be eligible for a significant resident or distant student discount if the school is more than 100 miles from your home and he or she won’t normally be driving while away. Before you select this discount, ensure that the policy will still cover your child if they happen to borrow a friend’s car while at college. You don’t want a gap in coverage.
If you have multiple cars, there are a number of things to consider, including which car or cars you permit your teen to drive. Insuring your teen to drive a brand new luxury vehicle is likely to cost much more than a beat-up, 10 year old car due to the difference in potential repair costs. If permitted by your insurance company, you can save money by restricting your teen to the vehicle that costs the least to insure. You will need to balance this with other safety concerns. For example, some parents prefer their teen to drive a newer vehicle with better safety features (air bags, ABS brakes, etc.) and a better crash-test rating. However, some insurance companies won’t give you the option, and will assign your teen automatically to the vehicle on the policy with the greatest premium cost. Talk to your insurance company to determine their methodology for multiple vehicles.
Encouraging your teenager to do well in school can have a secondary benefit—lower insurance premiums. Many insurance companies give discounts of 10% to 25% for insured students who maintain good grades. A-grade students are not necessarily safer drivers than C-grade students, however insurance companies consider good students to have a better future risk profile and want to keep them as long-term (and hopefully profitable) customers.
Consider buying umbrella insurance with increased liability coverage.
Teens should be told just how much it costs to insure them so they appreciate the importance of driving responsibly and avoiding accidents. Once they are covered, they should be given a copy of the insurance card to keep with them when they drive.
Fortunately, through driver education, better roads, increased vehicle safety and regulation, teen motor vehicle fatalities have declined significantly over the past few decades, even though the population has increased over that time. However, this should not make us complacent. Consider implementing the following rules for your teen:
Preventing your child from driving is unrealistic, and is simply delaying the inevitable in that they will most likely need to learn to drive at some point. Instead, you should continue to encourage your teen to develop safe driving habits and increased hazard awareness.