Does Your Teenager Have to Be on Your Auto Insurance Policy?

My teenage son is about to get his first car. Should I add him to my insurance policy or get him his own?

The white-knuckles, the sweat on your upper lip, the heart palpitations, and the visions of your life flashing before your eyes. Congratulations you have a teenager and it’s time to teach them how to drive. The horror doesn’t stop, however with those first experiences in the car with them, when you notify your insurance company (and yes, you’d better notify your insurance company) that you have a teenage driver, you can expect your rates to increase between 50% to 100%. Then the real sweating begins.

Find Cheap Rates for Your Teen

Well, the fact of the matter is, that insuring a teenager isn’t cheap no matter what you do. Of course rates vary from insurer to insurer and you would do well – very well – to shop around outside your current carrier to find the best car insurance rates for insuring your teenager, but there are some things you can do to mitigate the pain of paying for that statistical probability that makes your teen such a high risk:

• Choose their car carefully: It’s more or less a given that your teenager is going to want a car that is sporty, fast, good-looking and expensive. Whether or not you can actually afford such a vehicle, know that the sportier, faster, better looking, and more expensive the car, the higher the insurance rates will be for it. An old, slow jalopy may not make your teen the talk of the town but it will likely save you thousands of dollars in car insurance in the long run, not to mention its inability achieve significant speed and greater size will reduce the likelihood of an accident or your teen being hurt in one.
• Teach your child right: A good driving record can cut insurance prices, taking a defensive driving course can do the same. If your child does well in school, presenting that information may earn you a good student discount.
• Consider a separate policy: No, your student does not have to be on your auto insurance policy that you have had for years with the same carrier and nurtured a good relationship with. It may, in fact, be cheaper to find them an insurance policy somewhere else, or maybe your insurance company will give you a multi-policy discount if you get your teen driver their own policy with them. Bear in mind, though, that an insurance policy is a legal contract – something that most states prohibit teenagers from entering into alone, so you will have to be the one to secure the separate policy, maintain it, and be responsible for the payments, whether you work out with your teen to actually pay it or not.
• Don’t report it: If your teen backs into your fence while getting out of the driveway… if they have a minor fender-bender and no one is hurt and the damage is not significant to the other car…if they fall asleep behind the wheel and scrape some paint off the side of the vehicle…your insurance company does not need to know these things. Filing a claim for payment will cause your rates to increase (significantly) and will not be worth any payment that they make on your behalf. You are required by law to report significant accidents, however and those that result in injury.