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The Complete Guide to Car Insurance for Teens

Is your teen ready to get behind the wheel? Get answers to all your questions with our guide to car insurance for teens.

car insurance for teens

When your teen is ready to get behind the wheel, your head starts spinning. From finding the best driver education program to setting up car insurance for teens, there are so many things you need to do to prepare. Keeping your teen safe is a priority, and making sure they have proper insurance coverage is one component that will ease your mind.

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Securing auto insurance for teens can be complicated as they are more prone to accidents. This makes them riskier on the road, increasing premiums and adding to the overall cost of driving. Luckily there are steps you can take to make the insurance process simpler and maybe even less expensive.

car insurance for teens

It’s best to consider all your options when it comes to securing car insurance for teens.

A guide to car insurance for teens

Understand state auto insurance requirements

Since there are no federal mandates that require driver to purchase car insurance for teens or other drivers, state laws will dictate the type of coverage that your teen will need. It may have been a while since you selected your own policy, so refresh your knowledge of the laws in your state. In most areas, teen drivers will need liability insurance to cover damage they cause in the form of bodily injuries or to vehicles and other property.

The best time to research auto insurance for teens is when they are ready for a learner’s permit. While teens generally are covered on your policy during this time, you should notify your insurer that you have a learning driver in the household and will soon need to set up his or her coverage.

Consider collision coverage

In the event your teen’s car needs repair or replacement after an accident, collision insurance is the type that will protect you. While it is not required, this auto insurance may be a wise investment as it covers the cost of repairs even where there is a total loss of the vehicle. Despite their best efforts, teens may have encounters with non-moving objects such as streetlights and trees.  You will be thankful for collision insurance if your teen accidentally backs into a fence or hits your garage door.

Save money on premiums by adding a teen driver to your policy

Once you have researched the type of best auto insurance for teens, you can save money by reviewing your own coverage and adding your child to that policy.

This is the least expensive way to set up car insurance since teens will pay a higher premium for their own auto insurance. In some states the difference is nominal, but in others, the difference can be staggering.

With a limited driving record, increased risk of accident, and little to no credit history, teens are at a distinct disadvantage when securing their own insurance, but this doesn’t mean they shouldn’t assume some financial responsibility. Parents who opt not to cover the cost of insurance often set up their own informal payment plan.

Assign a teen driver to a specific car

There are multiple factors that carriers use to determine the cost of insuring the individual cars on your policy. These include the age of the vehicle, safety ratings, and susceptibility to being stolen or driven dangerously. Often it is possible to save on cost by specifying the car to which a teen driver is assigned. This prevents your carrier from associating a new driver with the most expensive car on your policy.

Research discounts for teen drivers

Many carriers provide financial incentives when teens sign up for safe driver programs, many of which are available as online training. In addition to saving money on auto insurance, these programs provide parents with greater peace of mind as they reinforce driving skills and aim to prevent accidents. With fewer years of experience, teen drivers need all the reinforcement they can get when it comes to response time and attention.

Some insurers also provide discounts for good academic performance. This is yet another way to reduce costs while reinforcing positive habits.

What to do when your teen has a separate policy

A shared plan is generally the least expensive way to insure a teen driver, but in some instances, parents may not want to add a teen driver to their policy. If teens will be securing their own auto insurance, help them to research all the discounts available and provide guidance throughout the process.

Once your teen has a separate policy, you may want to consider excluding that driver from your own policy to avoid a premium increase. Under the omnibus clause, certain individuals are automatically considered insured under your policy, including members of your immediate household. If your carrier allows you to specify excluded drivers and your teen’s name is on the title of his or her own car, this will help you to save money.  Just make sure your teen doesn’t use your car since you will be personally responsible for any damages.

Getting car insurance for teens is an important step in the process of becoming a new driver. Fortunately, many of the programs that are designed to keep your teen safer on the road also reduce costs, giving you greater peace of mind in both areas.

Turn to AAA for all your teen driver insurance questions. Visit to see all the options available for your teen driver.


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