When children reach the driving age, parents must brace themselves because teenagers face increased risks on the roads. Even if you teach your kids to be responsible drivers, you can’t control how they think and act once they’re behind the wheel. That’s one reason why car insurers tend to charge a premium when protecting young motorists.
The prices are typically high, but children need auto insurance if they have a license but no car. Even if your child just turned 16 and rarely borrows your vehicle, they must be added to your existing car insurance policy.
Our team has ranked the best car insurance providers to show which options could lead to financial savings. Read on to learn which companies can offer considerable savings to those who are ready to add teen drivers to their auto insurance policies.
What Auto Insurance Do Teenagers Need With a License But No Car?
Licensed teenagers should be placed on their parents’ coverage plan as added insured drivers. Once your teen moves beyond their learner’s permit, you’ll find that adding them to your own insurance policy is both cheaper and more practical than buying separate coverage.
When putting children on your auto insurance policy, be clear about who owns the car. If the vehicle is registered under your child’s name, you cannot add them to your existing car policy. They’ll need their own insurance coverage, though this is difficult for those under 18 years old.
Keep in mind that teens can only be added to their parents’ policy if they live in the same home and drive family members’ cars. Kids who move away for college may still be eligible under their parents’ policy, but teens who’ve moved away for good probably can’t do so.
How Much Coverage Do Teen Drivers Need?
It’s legally required for every driver to at least carry state minimum liability coverage. These coverage requirements depend largely on your state’s department of motor vehicles (DMV).
In all states other than New Hampshire and Virginia, every driver must have bodily injury and property damage liability insurance. Your policy only covers damages and medical expenses of other drivers unless you add different types of coverage, such as medical payments coverage.
It’s often smart for motorists to add collision coverage and comprehensive coverage to their policies. Neither one is required under state insurance laws, but they’ll protect your own vehicle after car crashes and instances of theft, vandalism or environmental damages.
How Can Teenagers Get Auto Insurance Policies?
If your child has a driver’s license but no car, they’ll still need to be added to your auto insurance plan. This is the simplest and most cost-effective way to comply with state laws and protect against financial setbacks caused by your teen after a car accident.
It’s critical that you add your teen if they’re a licensed driver, even if they won’t be a vehicle’s primary driver. Policyholders who don’t add their children to their car insurance plan but let them drive could face denied claims from their auto insurers.
Cost of Adding Teens to Your Car Insurance Policy
Your car insurance premium could increase sharply if you add your teenage driver to your policy. Putting 16-year-old drivers on your auto policy will likely add thousands of dollars annually, with even cheap car insurance carriers rarely charging less than $1,200.
Male teens are generally more expensive to insure than females because of their greater potential for reckless driving, getting speeding tickets and not using seat belts.
Benefits of Adding Your Children to Your Car Insurance
Although adding teens to your car insurance means higher premiums overall, you’ll receive the following benefits:
- Lower cost than with separate policies: Teenagers will almost always find it more expensive to pay for a separate car insurance policy. If your children still live with you and drive a car registered under your name, it’s better to add them to your plan.
- Qualify for new discounts: When adding children to your policy, you may find good student discounts, distant student discounts and ways to save money through teen driving programs.
- Simple policy management: It is simpler to manage your insurance policy and overall finances when everyone in the household has their driver’s license numbers listed under a single policy.
- Ease of getting coverage: It’s difficult for young drivers to qualify for excellent coverage plans. Rolling them into your own auto insurance policy ensures that they’ll be protected while on the road.
Since your children need auto insurance if they have a license but no car, it’s a smart move to place them on your own coverage. There are ways to get around doing so, but that’s rarely the right decision to make.
How Can Children Get Their Own Car Insurance Coverage?
Teens can only get their own insurance once they’re 18, so an adult needs to sign the policy for those under that age. If a child wants to finance their own car, a parent must co-sign the loan.
Car insurance costs for giving teenagers a separate car insurance policy are much higher than for adding them to your existing coverage. We’d recommend thinking twice before having your child get their own policy, especially if they have a license but no car.
Why Is Car Insurance Expensive for Teen Drivers?
Even children who need auto insurance because they have a license but no car will likely pay steep rates for coverage. That’s because new drivers have a couple factors going against them:
- No previous driving record: Those with previous road experience have a driving history that reveals their long-term safety behind the wheel. Those who just got their first driver’s licenses don’t have a driving record to back them up.
- Limited credit history: Many teenagers don’t have a credit score yet, and that’s a factor that plays a significant role in the calculation of auto insurance rates.
- Risky behaviors on the road: Studies reveal that young drivers are more likely to get caught for speeding, not wearing seat belts and driving under the influence.
- Inexperience behind the wheel: Teen drivers get into more accidents than nearly any other age group, and much of this may be caused by relative inexperience. Young motorists are still learning how to drive, so they’re more vulnerable to making mistakes.
Car insurance rates may go down somewhat if you increase the deductible on your coverage plan. This means you’ll end up paying more out of pocket after an accident you cause, though.
Our Recommendations for Auto Insurance
Our recommendations for auto insurance coverage are GEICO, State Farm and Progressive. Each of these providers is known for offering quality car insurance, even for young and inexperienced drivers. It’s smart to get multiple auto insurance quotes from these and other options to make sure you find the best possible coverage.
GEICO: Best Overall
GEICO has over 80 years of experience in providing quality insurance to customers, and it’s known to give most customers exceptional rates. The company has an A++ financial strength rating from AM Best and is known for its coverages that can suit the needs of most drivers.
State Farm: Best Student Discounts
Few car insurers come with the impressive reach of State Farm, which has insurance agents in communities all across the U.S. The provider also has a superb number of savings for those in school, from its safe driver discount to its Steer ClearⓇ program.
Progressive: Best for High-Risk Drivers
Progressive’s reasonable rates for high-risk drivers make it one of the industry’s leading insurers. The company is often willing to protect motorists such as teens who may face issues getting coverage from more risk-averse providers. Read more about this choice in our complete Progressive insurance review.
Frequently Asked Questions (FAQs)
Do teens need car insurance?
Teens need car insurance as long as they have a valid driver’s license and will at least be an occasional driver. Having auto insurance is necessary under the law and can protect teens from the financial setbacks caused by accidents.
What are the benefits of adding teens to your car insurance?
The most popular way of getting your teens insured is to add them to your existing insurance policy. Doing so will raise your personal insurance premium, but it’s far more cost-effective than purchasing a separate auto insurance policy for them.
Are teens considered high-risk drivers?
Yes, teens are considered high-risk drivers. Studies show that teenagers are more likely to drive without wearing a seat belt, to receive DUI violations and to drive above the speed limit.
Do you need insurance with a learner’s permit?
Yes, everyone who gets behind the wheel must be covered by car insurance. However, those with a learner’s permit will likely be covered by their parents’ policy. It’s absolutely essential that you add this young driver to your policy before taking them out on the road.
Methodology
The Detroit Bureau collects data from every major car insurance provider to formulate rankings of the best insurers. Our in-depth rating system takes into account market share, coverage, auto insurance rate estimates generated by Quadrant Information Services, customer satisfaction and ratings from industry experts. Each insurer is given a weighted score in four categories, as well as an overall score out of 10.0.
We recommend auto insurance companies based on these rankings, but we also encourage you to perform your own research and compare quotes to find the best coverage.
