What to Expect When You Add a Teen Driver to Your Insurance
As a parent, you eventually will come face-to-face with that scary and exhilarating time when your teenager starts driving. Your child also will need auto insurance in crossing this milestone.
In Washington state, teenage drivers must by law obtain liability coverage after they get a license and start driving without adult supervision. It is possible for your teenager to get his or her own insurance, but premiums for teen drivers are exceptionally high. It is usually more affordable to add a child to your existing policy because insuring multiple cars under one policy typically qualifies you to receive a discount.
Adding a teen driver or any other family member to your coverage has consequences, however. Your premium will go up by as much as 50% to 80%. Some surveys suggest your premium can more than double when adding a teenager.
Teen drivers as a class are charged much higher rates than their parents and grandparents because they are statistically more likely to get into an accident. Teen drivers have crash rates that are four times higher per mile driven than 20-year-old drivers, the Insurance Institute for Highway Safety reports. Teens also are more likely to speed, to drive recklessly and to cause serious accidents because of their road inexperience, according to the Centers for Disease Control and Prevention.
Don’t Skimp on Liability
Insurance companies charge varying rates for adding teens, so ensure that you speak with your agent about how to score the best rate. In Washington state, all drivers must carry a minimum level of liability insurance. Liability covers damage to the victim’s vehicle or medical expenses should you — or anyone else on your policy — be at fault for the accident.
Many drivers are tempted to buy only the minimum liability required by law. When adding a teen, your first reaction may be to take the cheapest policy available. Don’t forget, however, that you are adding a risky driver — one who is statistically more likely to cause a serious accident — to your policy.
Under a worst-case scenario, you would be held legally liable for an accident that your teenager causes. In auto accidents that cause deaths, permanent disabilities or lengthy hospital stays, your liability could run into the hundreds of thousands of dollars. In Washington, the required minimum liability coverage would only cover a fraction of the damages. If sued by the victims, you could potentially lose your life savings and assets.
So, when you add a teenager to your policy, it makes sense to increase your liability limits. You also might consider adding an umbrella policy that can provide $1 million or more in extra liability coverage for accidents that occur on the road or at home.
You should spend some time thinking about what car your child should drive. AAA recommends starting teens out in a mid-sized sedan. These models tend to be easier to drive and safer than compacts, sports cars, SUVs and trucks.
If your teen is driving a newer model, you’ll need extra coverage that will cover repairs or the car’s replacement costs. Unlike liability insurance, comprehensive and collision insurance is not required by law — although auto lenders usually require these coverages if they hold a lien on the vehicle.
If your teen’s car has lots of mileage on it and isn’t worth that much, you won’t necessarily need to carry collision or comprehensive insurance. Dropping this coverage will save hundreds of dollars annually on the premium. Many parents prefer to start off their children in a safe, reliable older vehicle than buying a new car that requires full coverage.
Your teen may qualify for a safe driving discount. Many insurers, for example, now offer usage-based insurance discounts for drivers, including teens, if they are willing to participate in a monitoring program.
In the past, insurers would send a device in the mail that would plug into the car to track usage and habits. If your child performs well, they can qualify for a discount on average of around 10% to 15%. The savings vary. Generally, the less you drive and the better your habits, the greater the discount.
Many insurance companies now use wireless apps that provide regular updates on the driver’s performance. This tool is especially handy for parents who want to monitor how their kids are doing on the road.
Teens also can sometimes get an insurance discount for maintaining a “B” average at school or completing a defensive driving course. It is a good idea to regularly check in with your insurance agent to see what discounts are available.
As for adding adult members of your family to your policy, many of the same rules apply. Older drivers are less risky drivers than teens, and so your premium won’t tend to rise as much when you add mom and dad to your coverage. All bets are off, however, if your elderly parent has a spotty driving record. Just as with your teen, if you add a parent to your policy, you are betting that they won’t have an accident that exposes you to liability.
– Written by Victor Whitman, last updated in November 2022.
–Top image by Kali9/Getty Images