Paying the Price

Can I drive? These three little words take on a whole new meaning when you’re the parent of a teen.

When anyone gets behind the wheel of a car risks are involved. You might be a great driver, but you can’t control what’s happening around you. Those risks only increase when we talk about teen drivers. According to the Insurance Institute for Highway Safety (IIHS), with each mile, teen drivers are three-times more likely to crash than someone 20 years and older.

As a dad these statistics are frightening. As someone with more than 20 years in the insurance industry, these statistics make insuring teens one of the most costly challenges for both parents and insurance carriers.

Insurance companies look at a number of things when calculating insurance rates, including age. In 2013, car crashes remained the leading cause of death for 13 to 19 year olds in the U.S. That kind of information is hard for carriers to ignore as they consider the risk involved with insuring young drivers.

We often hear from parents unsure how best to handle protecting their teens. Whether you’re a parent who currently has a young driver or one who might in a few years – it’s good to know what to expect when your teen is ready to hit the road.

Teen Drivers: Common Questions

Q. If my teen has a permit, do I need to notify my insurance company?

A. It’s a good idea to contact your agent once your teen gets his or her permit, but it will not change your auto policy. Teen drivers with learner’s permits are still covered under the parent. That changes once your teen gets his or her driver’s license.

Q. Would it be cheaper to have my licensed teen get his or her own insurance policy?

A. In order to get a separate policy, your teen must be the registered owner of the vehicle they’re driving. Some states do not allow anyone under 18 years of age to be registered owners of a vehicle. If your teen gets their license at 16, they may not be eligible for their own auto insurance policy until they turn 18 and are the registered owner of a car. Be sure to research your own state’s requirements and speak to your insurance agent if this is something you would like to pursue.

Q. My son has his license, but we don’t let him drive due to grades. So we don’t have to add him to our policy, right?

A. Wrong! Even if you have placed restrictions on your son or daughter’s ability to drive, once they get their license they need to be listed as a driver on your current policy.

Insurance carriers are working to find ways to reduce the cost of adding young drivers to parent’s policies, including offering good student discounts. By tying scholastic achievement with the opportunity to be licensed, many carriers have found these discounts helpful for parents from a pricing standpoint.

Yes, your car insurance rates will go up, in some cases by a lot once you have a licensed teen driver. Working with an independent agent who has access to multiple carriers can help you find the best protection option without breaking the bank.

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