Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health in...

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Reviewed by Jeffrey Johnson
Insurance Lawyer

UPDATED: Jul 14, 2021

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In a nutshell...

  • Insurance rates can increase by 80 percent or more when you add a teen driver
  • You may not be legally required to add a teen with a learner’s permit to your insurance, but you should still notify the company
  • Make changes to your plan to keep rates down, including increasing your deductible

Teens are excited to start driving, and parents are usually filled with worry about this change. One thing that you may be concerned about is the potential increase in your insurance premium.

You may think that a teenager who just has a learner’s permit doesn’t count, but your insurance company may see this differently.

Make sure you’re not overpaying for auto insurance. Enter your zip code in our free comparison tool above.

Teens on a Learner’s Permit are Supervised, so Insurance is Not Necessary

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In states like California, a teenage driver will not need his own policy because he’s being supervised by a licensed adult. However, once that teenager obtains her license, you’ll need to add her to your policy.

The state is clear that the parent or guardian accepts financial responsibility for the teen driver on a permit. The vehicle owners and adult drivers are expected to be insured in accordance with minimum state requirements.

This can be costly, but you can bring the expense down by shopping around with other companies.

Other states, however, have different laws where teen drivers are concerned. Even though they are supervised by an adult, some states let the insurance company decide whether they must be notified or not.

These states include the following:

  • Illinois
  • Indiana
  • Maryland
  • New York
  • North Carolina
  • Ohio
  • Pennsylvania
  • Virginia
  • West Virginia

Insurance companies like to know when there are changes that alter risk levels. In fact, some policies specifically state that the carrier must be notified of any additional drivers or risks that may arise.

Upon reading the fine print, you may even discover that your policy will not cover you if the insurance company is unaware of any changes.

This is why it may be in your best interests to notify your company when your child starts driving. A simple phone call to your agent or company can provide you with the information you need to have.

Adding a teen to your insurance can cause a drastic spike in your premiums, but you can counteract the effect by shopping around for a different plan.

It’s also important to keep in mind that your rates probably won’t change drastically for a student driver.

In fact, many policies won’t change at all until the student driver actually takes the test and gets his or her license, and that can give you some time to shop around for better rates on full insurance coverage.

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The Average Cost of a Teen Driver

While you may be worrying about whether your child is ready to drive, another concern is the high cost of insurance for teenagers. You can expect your premium to rise by nearly 80 percent, and the bill can actually double in some states.

This shouldn’t come as a surprise considering that teenagers are the riskiest group of drivers on the roads. However, there’s more that works into the equation than just the fact that your child is between the ages of 16 and 19.

The exact amount of your increase will vary based on:

  • Exact age – A 16-year-old will have higher premiums than a 19-year-old
  • Gender – Boys see a higher increase than girls, although Hawaii, Massachusetts, Michigan, Montana, North Carolina, and Pennsylvania have banned this practice
  • Location – New Hampshire has some of the highest rates in the nation for teen drivers

Bringing the Rates Down

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You’re not completely at the mercy of the insurance industry when it comes to insuring a teen. In fact, there are several steps parents can take to bring the rates back down a little.

Before buying a car or adding anyone to the policy, keep the following in mind:

  • Drivers with their own cars will have higher rates, so consider sharing the vehicles rather than buying one just for your child
  • Go with higher deductibles to help offset increases in the premium
  • If you do buy a car, go with a mid-sized sedan rather than sports cars or SUVs
  • Ask about discounts for good grades, multiple cars, multiple policies, and completing driver’s education courses
  • Keep practicing. Even after your child has his license, get in the car with them on a regular basis to supervise their progress and catch bad habits early on
  • Encourage safe driving by being more involved with your child. Research has shown that kids whose parents take an active interest in their lives are less likely to get tickets or cause accidents.

Consequences for Failure to Report

It’s important to note that the insurance company can refuse to pay claims if they aren’t aware that a teen driver would be behind the wheel.

Even if the agency decides to cover the accident, they can still take other steps to help offset their losses, including:

  • Looking through the history and assessing the premiums that should have been paid
  • Raise premiums moving forward
  • Decline to renew the plan

Protect yourself financially by notifying the company as soon as your child earns his learner’s permit. If the rates jump up just for a learner’s permit, then shop around for a better plan.

You can also save on insurance by checking premiums with other companies before your child gets her driver’s license.

With a little searching and patience, you can find the right plan for your family. Remember that you can change the deductible and coverage levels to help bring the rates back down and make the plan more affordable.

Compare car insurance quotes today for free!