Which comes first: Auto Insurance or the Driver’s License?

My daughter will be getting her driver's license in two months. Do I need to get her auto insurance before she gets her license or afterward?

It can be confusing to many – especially the teenager out for and excited to be getting their first car, their independence from Mom and/or Dad, the status that comes with having their own set of wheels (even if it s borrowed). Since you can’t drive a car without insurance, and you can’t drive without a license, which one should come first? The answer depends (of course) on the vehicle the parents, and the teen arrangement for driving.

Sometimes it’s the License

No insurance company will issue insurance for a car without first checking a driver’s license, so the license must come first if you are looking for personal coverage. You don’t normally seek banks of 15 and 16 year olds at the DMV with their license fresh in hand, excitement on their faces at the pay phones calling their insurance companies to set up basic liability coverage before they hop on the road to drive home solo for the first time. This is because it doesn’t usually happen that the teen is going to be off and driving their own car with no assistance or support from their parents first.

Under normal circumstances it is the car – not the driver – that is insured, and since most of these young teens will have learned to drive on and taken their test in a car that belongs to their parents, the car is insured (usually at sky-high prices) for a teen driver already. If you are one of those fortunate teens who is receiving a car as a gift after you have you’re your license, insurance for that car will not be a concern until you are ready to slip behind the wheel.

Usually it’s the Insurance

Unless you find yourself in the rare position of having purchased your own vehicle or having it given to you by a generous benefactor, the car you learn to drive on will be one that your parents have had insured through their own company. Adding you – a teenager – as a driver is costly, but usually has to happen before you even begin your training behind the wheel you’re your white-knuckled parent(s) beside you.

Waiting until a teen driver has actually secured their license before getting them insured can be a costly proposition – if there is an accident with the teenager driving on their learner’s permit – even with you in the car, your insurance company may be well within their rights to refuse any sort of payment at all for repairs or liability, leaving the costs fully in your pocket.