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Car insurance for young drivers

Young drivers hit things. They are not just inexperienced, they are immature. They have no driving history, no credit report, no continuous record of coverage -- none of the reassuring factors insurers like to see as they consider how to price car insurance for new drivers.

A cheap car isn’t necessarily a solution, although it helps. Insurance companies are just as worried about the damage a teen driver can do to other people and property.

Comparing quotes is your best bet for saving money. The difference between companies is typically hundreds -- and often thousands -- of dollars. Then make the most of the available car insurance discounts for teenagers.

Here are the most common questions we see about car insurance for young drivers. If you don’t see the answer to your question here, search to see if we have already answered your car insurance question. If not, you can ask your own question.

Top Young Drivers Questions

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How much does car insurance for new drivers cost, anyway?

If you are the parent of a licensed teen, your rates are likely to go up – a lot – when you add your inexperienced driver to your car insurance policy.  Every family is different, but adding a teen male to your policy usually will at least double your rates.

There are many factors that can change the amount a young driver will pay. They include where you live, the type of car you have, the safety features of the car and how much your teen will drive.

Keep in mind two things:

  • There are no shortcuts. If your teen drives, you must add him or her to your policy or specifically exclude your new driver from your coverage.
  • The more you pay, the more likely it is that you can save money by shopping around. 
Why is car insurance for young drivers so expensive?

Teens are inexperienced behind the wheel and immature by nature. That's a bad combination.

A brand-new driver is 12 times more likely to have an accident than someone with a year of experience, says the National Institutes of Health. A 16-year-old who’s had one accident is 50 percent more likely to have another, says the National Highway Transportation Safety Administration.

That’s why most insurers have a surcharge for inexperienced drivers.

In addition, maturity levels change quickly. Teens who get their licenses at age 18 have fewer fatal accidents than those who are licensed at age 16. Many insurers no longer lump all young drivers together but instead rate age groups separately.

At what age do young drivers' rates go down?

In time, your insurer will rate you based on your own driving record rather than those for young drivers in general.

But each car insurance company makes its own decisions on when that happens. Most will not penalize a driver over the age of 25, but some carriers will lower rates for women when they turn 21 and men when they turn 24.  Study after study finds that women mature more quickly and take fewer risks.

In addition to rating drivers based on age, insurers can also levy a surcharge for inexperience, usually for those who have been licensed less than a year.

Of course, a ticket or accident changes the equation considerably -- and never in your favor.

What are the cheapest cars for young drivers?

The least expensive cars to buy aren’t always the least expensive to insure. Some cars cost more to repair after an accident, and some have a record of more injury claims than others do. And the least expensive car to insure may not be the safest. Electronic equipment such as stability control and antilock brakes can help novice drivers avoid accidents, and there can be a discount for having them.

In general, boring is good. The least horsepower and the most doors is a good guideline -- usually, the lowest premiums go to minivans and small SUVs.

If your son or daughter will be driving a family car, make sure the new driver is assigned to the vehicle that’s cheaper to insure.

Typically, cars that are cheaper to insure when they’re new are also cheaper to insure when they are used. Insure.com has a new-car comparison tool that can help you zero in on a specific model. In addition, we've looked at used cars to find 20 we think are not only safe but also are relatively cheap to buy, run and insure.

Read more: The best used cars for teens

Do I have to add my licensed teen if he doesn’t own a car?

Yes.  It doesn’t matter than he doesn’t have his own car, he has access to yours. 

If you don’t list him and he is in an accident, your policy may not cover him.  Some car insurance companies explicitly note in their policies that unless you notify them of additional drivers or risks, those individuals will not be covered.

If they do cover the accident, the insurer may require you to pay back premiums from the time the teen was licensed. 

If your teen is getting a license but isn’t going to drive your cars -- ever -- then in some states, some insurers will let you exclude the teen from your policy.  If you do exclude a teen, or anyone, from your policy, there will be no car insurance coverage extended if they are in an accident.

Read more: What is a named driver exclusion?

Do I have to tell my insurance company about my teen if he isn’t licensed?

Yes, you usually do.  Many insurance companies want you to tell them about household residents who are over a certain age (usually 15) whether that person is licensed or not. 

If your child hasn’t received a permit or license yet, the teen usually can be listed as unlicensed on your policy.  When a young driver is noted as unlicensed, he also should be unrated by the car insurance company, meaning the teen wouldn't affect your auto insurance rates.

Once your teen gets a learner’s permit, some companies allow parents to list novice drivers at no additional charge until they get their licenses or turn 18.  They allow this because state permit-holder laws require a licensed driver age 21 or older in the passenger seat, making the young driver less of a risk.

Other auto insurance providers require that teens be added when they are in the permit stage, so check with your specific car insurance company.

If your teen is licensed, you must add him or her to your policy or specifically exclude the teen if your state allows that.

Who should insure a teen if the parents are divorced?

In general, the custodial parent’s policy is primary for the newly licensed driver. However, if the child will drive when staying at the second home, both parents typically need to list the teen as a driver.

Auto insurance companies deal with this situation differently, so both parents should inform their auto insurance carriers of the situation and see if one or both parents need to list the child on their policies.

Can a teen get a car insurance policy by himself?

Yes, a teen can get a car insurance policy of his own, but it’s usually a little more complicated.

If your teen is under the age of 18, an adult (parent or guardian) signature is usually required if the teen wants to get a policy under his own name.  Insurance is a legal contract, and a parent is normally required to sign on the policy to provide authority for the teen to enter into a contract and to keep it from being voided out.

Even if parents are willing to sign on the policy with a young driver, they should keep in mind that it’s normally cheaper if the teen is added to the parent’s policy instead. 

Can young drivers be taken off the policy when they go off to college?

Most insurers say that if a child’s college is within 100 miles of your home, you’ll have to continue to keep him on your policy. The thinking is that the student can come home frequently and use your vehicle.

But you should ask. Some insurers take a different approach.

If your child is attending college across the country and didn’t take a car with him, you should be able to take the child off your policy.  If he comes home for breaks, especially for the long summer break, you need to ask if he will be covered automatically or have to be added back to the policy.  This varies by insurance provider.

What discounts are available for teen drivers?

There are a couple of sizable car insurance discounts for teenagers.

Encourage your kids to do well in school because a good student discount can help bring down your rates. Each insurer has its own guidelines, but typically the discount can be 10 percent to 15 percent.

The definition of a good student varies as well. In general, it’s a student who ranks in the upper 20 percent of his or her class, has a B average or 3.0 average, or is on the dean's list or honor roll.

You can also look into discounts for new drivers who take a safe-driver course, sometimes sponsored by the insurance company.  This may mean taking a driver’s education class or just watching a special driving DVD or reading a driver-safety book before taking a test to show mastery of safe driving traits.

In general, it costs less for parents to add teens to their insurance rather than for teens to purchase their own policies.  And if the teen has a car that you add to the policy, this should qualify you for a multi-vehicle discount. 

Lastly, there may be discounts available for devices that monitor driver behavior.

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