A complete guide to adding a teenager to your car insurance policy in 2024

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When your teenager starts driving, there’s more to consider than just their safety—you’ll also face the added cost of insuring a young driver.

Teen licensing and insurance laws have changed significantly in the past few years. So, as your child starts driving, you’ll need to consider how to add them to your car insurance policy.

A common question parents ask is whether they must add their teenager to their policy. In most cases, the answer is yes, as long as your teenager is a minor and lives in your household. In some situations, a minor may be able to get their own insurance with an adult co-signer.

Once your teen turns 18 (or reaches the age of majority in your state), they can obtain their own insurance policy without your help. However, teens who purchase their own insurance typically face very high rates due to their inexperience and higher risk of accidents.

In most cases, adding your teenager to your car insurance is the more cost-effective option. “It’s usually cheaper to add a teenager to their parent’s car insurance policy,” says Carole Walker, executive director of the Rocky Mountain Insurance Association, a nonprofit representing property and casualty insurers.

It’s important to remember that your teen must be insured once they start driving to comply with state laws.

Our advice to parents of novice drivers

There are several things you should keep in mind when insuring a teen. They include:

Make sure your teen is covered. Except in New Hampshire, everyone who drives a car must be insured. Before your teen starts driving – even before getting a driver’s license – reach out to your insurer to ensure the teen and your family are adequately covered.

Prepare for higher costs. There is no way around it: Insuring a teen will be expensive. It is important to note this reality and budget ahead of time.

Boys are often more expensive to insure than girls. Boys are statistically more likely than girls to be involved in accidents, especially serious ones. That means insuring teen boys is usually considerably more expensive than insuring girls. However, there are some states, such as California, that prohibit the use of gender in car insurance ratings.

There are ways to cut those higher costs. Most insurers offer various types of discounts to teen drivers, such as good student discounts. Find out which discounts are available and take advantage of them if your teen qualifies.

How to add a teenager to your car insurance policy

Take the following steps to add your teen driver to your policy:

1. Talk to your current insurance company about when you must add your teen, whether at the permit stage or when the license is obtained.
2. Get a quote for adding your child to your existing policy with higher liabilities – 100/300/100 is recommended. The first number represents the maximum coverage for bodily injury liability for one person injured in one accident or incident, the second number represents the maximum coverage for bodily injury liability for all persons injured in one accident and the third number is your maximum coverage for property damage liability in an accident you caused.
3. Shop for quotes from other car insurance companies to find the best rates.
4. Add your child at the appropriate time to your current policy or a new insurer with better rates. Remember to ask for discounts on both.
5. Monitor your child as a driver and insist on good driving behavior to keep your child safe and insurance rates as low as possible.
6. Shop at least once a year to ensure your rates are as low as possible by comparing quotes from the top auto insurance companies. Also, check if new discounts are available, such as if your child has raised his or her grades and would now qualify for a good student discount.

When to add a teen driver to your car insurance policy

There is no standard rule on whether you should add your teen to your policy when they get their permit or a full license. Instead, rules about adding a teen driver vary depending on state laws, as well as your insurance company’s internal guidelines.

Many car insurance companies allow parents to list a teen with a learner’s permit on the policy at no charge until the child becomes a fully licensed driver, whichever is first.

At the permit stage, the driver must have a licensed driver over the age of 21 in the passenger seat to supervise, making the teen much less of a risk.

However, not all insurance companies follow this guideline. Some companies require you to add a teen and start paying premiums for them once they receive their permit. You should contact your car insurance provider before your child gets their permit to determine when your current insurer requires you to add your teen driver.

If your child wants to wait to get a license, that will certainly save you money. However, don’t be surprised if your insurance company asks you about your teen and if they are licensed. Insurers receive reports that list residents at your address and will know you have a teenager. If your child doesn’t have a permit or license, your insurance company may still list him or her on the policy but as unlicensed and unrated. That won’t affect your premiums.

The bottom line is that in all states except New Hampshire, all drivers must have insurance coverage when they are behind the wheel. Insurance follows the car, not the driver. So, if your car is insured, the driver should be covered.

However, as noted above, the rules can be a bit different if someone regularly drives your car and has not been added to your policy.

For this reason, reach out to your insurance company to ensure everyone is covered while driving your vehicle.

What happens if I don’t add my teenager to my car insurance?

If you don’t add your teen to your car insurance policy and they’re in an accident, your car insurance company could deny coverage, stating you committed fraud, specifically material misrepresentation, by not informing it of the licensed driver.

“Deliberate concealment could impact coverage,” Walker says.

Alternatively, your insurer may cover the accident but then require you to pay all premiums that should have been paid since your child was licensed. Instead of having their premium spread out during all the months they were licensed, it will be due all at once.

How much does it cost to add a teen driver to your car insurance policy?

Adding a teen driver increases car insurance rates by 70% to 150%, according to CarInsurance.com, which, like Insure.com, is published by QuinStreet.

But insurance costs vary by state and how much an insurer weighs age and experience into its rating calculations. 

Teen drivers are inexperienced, which puts them at the top of the risk list for insurance companies. That makes car insurance for teens much pricier than other age groups.

Let’s take a look at risk. The graph below shows teenage motor vehicle crash deaths as a percent of all motor vehicle deaths in 2021 – the most recent year for which the Insurance Institute for Highway Safety has published data.

Source: Insurance Institute for Highway Safety

Here’s a look at what some leading insurance companies charge to add teen boys and girls to a parent’s policy. These are average rates for teens with clean records, ages 16 to 19 years,  driving a Honda Accord LX.

How much does your insurance go up after adding your teenager?

Parents might not incur higher insurance costs when their teen is practicing driving without a driver’s license.

“Most companies won’t charge an additional premium until the teen is a licensed driver,” Walker says.

However, once the teen is licensed, adding him or her to your car insurance policy can cause your rate to jump by 70% to 150%, as noted earlier.

While that might sound daunting, the good news is that there are several ways to lower the rate. For example, students who excel in school might qualify for a “good student” discount.

The best way to cut costs is to shop around and obtain quotes from several insurance companies before settling on a policy that provides the coverage you need at the best possible price.

So, how much does it cost to add a teenager to your car insurance policy?

Insure.com found that adding a teen driver increases car insurance rates by 70% to 150%.

Cost of car insurance premiums for teen males vs. females

Auto insurance is one industry where the term “gender equality” doesn’t apply – unless you live in one of the handful of states where there is a law against using gender as a factor in rates.

Young male drivers are at much greater risk of being involved in an accident than young female drivers. The Centers for Disease Control and Prevention, the U.S. health agency,  notes that among drivers 16-19 fatal crash rates for boys are three times as high as for females of the same age.

The good news is that teen motor vehicle deaths are on the decline for both males and females. There were more than 9,000 teen motor vehicle deaths in the 1970s. Now, there are only about 3,000 each year. 

Male teens still make up a large percentage of deaths. Here are the stats for the past five years:

Source: Insurance Institute for Highway Safety

Overall, the cost of insuring young male drivers is about 10% higher than that of young female drivers, according to Insure.com data.

Some good news for males: Their rates will decrease as they mature behind the wheel and become less aggressive. By the time males hit their 30s, their car insurance rates will be on par with female rates.

How long do you have to add a new driver to your insurance policy? 

As soon as a new driver is licensed, you should contact your insurer and add the driver to your policy.

You might have up to 60 days after your teen gets a license to inform your insurance company, but you should not wait. Being proactive and contacting your insurance is the wise move here.

In fact, Walker says you should contact your insurer as soon as the teen starts driving, even during the learner period.

Technically, most insurance companies do not require teens to be added to a policy until they have a license, Walker says. However, failing to notify the insurance company promptly is a mistake.

“It’s a risky gamble, especially with a new, inexperienced driver behind the wheel,” Walker says. “It’s better to know what your car insurance covers and when you need to add your teen to the policy before you allow them to hit the streets for the first time.”

How to save money on teen car insurance rates

Skyrocketing rates caused by adding a teenager to car insurance can be reduced a bit by getting discounts. Here are the common discounts teens or your household can receive:

Good student discount: Insurers advertise discounts of anywhere from 5% to 25% if your young driver does well in high school or college, typically defined as obtaining a GPA of 3.0 or above or ranking in the top 20% of their class.

Good-driver discount: Keeping a clean record will allow your child to eventually receive a good-driver discount, generally 10% to 25%. However, insurers may require the person to have a clean license for three to five years.

Driver training discount: Some car insurance providers offer a discount for driving training courses, usually between 5% and 15%. Other insurers do not since it’s part of the licensing process. If driver education training courses don’t get your teen driver a discount, see if defensive driving or other classes will.

Low-mileage discount: Discounts start at driving under 10,000 miles a year, but they might be even higher if you drive less than 7,000 or 5,000 miles annually.

Monitor your teen: Teens are better drivers when they know they are being watched. You can monitor your teen by signing up for a pay-as-you-drive (PAYD) telematics program, such as those offered by Allstate and Progressive.

As part of these programs, a telematics device transmits your insured driver’s behaviors, such as braking, miles driven, speed and time of day the car is in use. Insurers will give you a discount if they deem your driving behavior to be good. Discounts vary for PAYD programs and might range from 5% to 45%. 

Family plan discount: Some insurers give discounts to young drivers who obtain their own insurance plan with their parents’ insurer.

Student-away discount: If your child goes off to college more than 100 miles away from your home and does not take a car, many insurance companies will offer a discount. The discount varies greatly, from 5% to up to 35%, depending on your insurer.

Multi-vehicle discount: When adding another car to your policy, it should be eligible for a multi-vehicle discount.

Here is a sampling of teen discounts offered by car insurance companies:

Other ways to save money on your car insurance policy

Pick the right car. A sports car or other high-powered vehicle is all wrong for a novice driver, and the insurance rates back that up. A family sedan, minivan, or small SUV are typically the vehicles with the best rates for teens. An older car isn’t always the best, as safety features will give you discounts and protect your teenager better if he or she is in an accident. Compare car insurance rates for a few cars before buying a teen a car.

Share a car with your teen. Instead of adding a new car to your household for your newly licensed driver, share one that is already on the policy. If you have three drivers and two cars, see if you can make your teen a secondary driver on the vehicles. This should cost less than your teen being listed as the primary driver since secondary drivers aren’t expected to drive as much.

Assign your teen to drive the cheapest car. Some insurers automatically assign the riskiest driver to the most expensive car. If your insurance company allows you to assign drivers to cars, you can save by assigning your novice driver to the cheapest car on the policy, meaning that will be the car they drive the most. So, your child will be primarily assigned to one car and be secondary to other cars. However, your teen can still drive all household vehicles.

Delay getting your teen a license. The younger the driver, the higher the car insurance costs. If your teen starts the licensing process at 15 but waits until 17 to be licensed, you won’t have to pay insurance costs for those two years and will pay lower rates when the teen turns 17.

Drop comp and collision. With a novice driver behind the wheel, keeping high liability limits is a must since this type of coverage protects you if the teen is responsible for injury or property damage to others. But if your teen’s car isn’t worth much, consider dropping comprehensive and collision. 

Raise deductibles. If you want to keep collision and comprehensive coverage on your vehicle, then think about raising your deductible. The deductible is the amount you pay before your insurance policy kicks in to pay the remainder of your car’s repairs or total loss. Raising your collision deductible from $500 to $1,000 could save you anywhere from $50 to $200 a year, or possibly more depending on your insurance provider.

Ask about discounts. As noted above, there are many discounts that can help you save money when insuring a teen. Each insurer has its own list of discounts, so reach out to your agent or a company representative to find out which discounts are available and whether you qualify for them.

Shop around. Perhaps nothing will save you as much money as shopping around for your policy. Each insurance company has its own criteria for setting rates. By shopping around, you can find the insurance company that best matches your needs and budget. 

Can you exclude a teen driver from a parent’s policy?

Excluding a household member is allowable in some states and by some insurers. You typically pay a small fee to exclude a driver from one or more of your vehicles. In return, your car insurance company doesn’t rate that person for the car(s).

When a driver is excluded from a car, it means that there is no coverage extended to that person if they drive that car. 

You wouldn’t want to exclude your teen if they are going to drive any of the cars in your household on occasion. However, if your teen driver has already been in accidents or has multiple tickets and your insurer is ready to drop you if they remain on your policy, it may be time to exclude them from your policy.

If you would like to exclude your teen from your insurance policy, contact your insurer. You likely will have to complete and sign a driver exclusion form.  

If you prefer not to exclude your teen – or if this is not a possibility — another option is to comparison shop and see if you can find an insurance company that isn’t as strict about a teen’s driving record. Another insurer may allow them to be on your policy with more reasonable rates.

What type of insurance coverage should your teen get?

There are many types of coverage you should carry when you add a teen driver to your policy. They include:

Liability coverage. This covers damages your young driver may cause to others, both injuries and property damage. It is important to carry adequate levels of coverage. Injury claims can easily cost hundreds of thousands of dollars in medical treatments.

Comprehensive and collision coverage. These types of insurance cover damages to your vehicle.  Collision coverage reimburses you for damages to your car that result from a collision with another car or object. Comprehensive coverage covers most other types of damage that occur to your car that are not the result of a collision.

Uninsured and underinsured motorist coverage: Uninsured motorist insurance helps cover damages when you are in an accident with a driver who does not have insurance. Underinsured motorist insurance can help pay your bills when the other driver has inadequate coverage.  

Medical payments coverage and personal injury protection: These types of insurance cover you for medical care related to injuries to you, or to a passenger in your car.

Gap insurance. This type of coverage protects you when you have a loan of the car. It pays the difference between what your vehicle is currently worth and what you owe on it.

Final note: Car insurance rates will eventually go down

Car insurance is highest during the early years of being licensed. Parents need to stress how important it is to be free from accidents and violations. As teens mature and demonstrate they’re good drivers, they can obtain good driver discounts, which can significantly help auto insurance rates. Also, auto premiums for drivers normally go down slightly each year from age 16 until age 25.

At age 25, drivers are in a new category, one where crash rates and claim payouts are less, thus annual premiums are lower.

Keep in mind: Car insurance rates will eventually go down

Car insurance is highest during the early years of being licensed. Parents must stress how important it is to be free from accidents and violations. As teens mature and demonstrate they’re good drivers, they can obtain good driver discounts, which can significantly help auto insurance rates. Also, auto premiums for drivers normally go down slightly each year from age 16 until age 25.

At age 25, drivers are in a new category, one where crash rates and claim payouts are less, thus annual premiums are lower.

What our expert says

Q: When do you have to include a new driver on your insurance?

Carole WalkerExecutive director of the Rocky Mountain Insurance Information Association.

Technically, most insurance companies do not require teens to be added to a policy until they have a license. However, failing to promptly notify the insurance company can be a mistake. “It’s a risky gamble, especially with a new, inexperienced driver behind the wheel,” Walker says. “It’s better to know what your car insurance covers and when you need to add your teen to the policy before you allow them to hit the streets for the first time.”

Chris Kissell

Contributing Researcher

 

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Chris Kissell is a Denver-based writer and editor with work featured on U.S. News & World Report, MSN Money, Fox Business, Forbes, Yahoo Finance, Money Talks News and more.