Adding a Teenager to Your Car Insurance: What It Costs and How to Bring It Down
It's the biggest rate jump most families ever see. But there are five or six things that take money off it, and most people only know about one of them.
Jon Parrack
Every August the driver's ed classes wrap up, the intermediate licenses show up in the mail, and the calls start. It's the same question every time, usually asked a little nervously: "How bad is it going to be?"
It's a big jump. There's no way around that part. But it's manageable, and most of the families I work with end up paying quite a bit less than the number they were braced for.
Why It Costs So Much
Sixteen-year-olds crash at about three times the rate per mile of drivers over 20. That's the Insurance Institute for Highway Safety's number. The company has never met your kid. It's pricing every sixteen-year-old in the state at once, and as a group they wreck a lot of cars.
In dollars, adding a newly licensed teen to a family policy usually adds somewhere between $1,500 and $3,000 a year. It depends on the company, the cars, and the kid. Boys generally cost more than girls. If somebody quotes you a number way under that, check whether they listed the teen on the policy at all.
When You Need to Tell Us
- When they get the learner's permit. In West Virginia that's the Level 1 permit at 15. In Ohio it's the temporary permit at 15 and a half. Most companies will cover a permit driver on the parents' policy at no charge, but they want to know about it. Call me the week the permit comes in.
- When they get licensed. Level 2 in West Virginia, probationary in Ohio. Once they're driving by themselves they have to be on the policy. Leaving a licensed driver in your household off the policy is the quickest way I know to turn a fender bender into a fight over coverage. It's also one of the more common reasons a company will non-renew you.
What Brings It Down
- Good student discount. Usually a B average or a 3.0. Worth 10% to 25% on the teen's share of the premium. Bring me the report card. This is the biggest one.
- Which car the teen is rated on. The company rates each driver on the car they're most likely to be driving. A 16-year-old on the ten-year-old Camry costs a lot less than a 16-year-old on the new pickup. Be straight with me about who drives what, because it'll come up if there's a claim.
- Dropping collision on the old car. If the Camry is worth $4,000, paying $600 a year to insure its value may not make sense. We can do the math together.
- Driver training. Some companies give a credit for a certified course beyond the school's driver's ed. Worth asking.
- The phone app programs. The ones that track braking and phone use. Discounts run 10% to 30% for good habits. For a brand new driver, it's not a bad thing for them to know somebody's watching.
- Later on, college. If they go to school 100 or more miles away and leave the car at home, there's a discount for that. We'll talk about it when the time comes.
What Not to Do
- Don't leave them off the policy. I see this every year and it never goes well.
- Don't put a car in the teen's name on a separate policy to "keep it separate." That almost always costs more than adding them to yours, and it can leave gaps.
- Don't buy the two-door sports car. That's the one I can't fix with a discount.
Got a new driver in the house? Call the Point Pleasant office before the first solo trip. Some of the companies we write with are a lot friendlier to teenagers than others, and I'd like to run it across all of them.
This is general information, not specific advice for your situation. Every policy is different.
