Teenagers and cars are a potent mixture that can have unfortunate results. As of 2013, car wrecks are the primary cause of death among teenagers in America. The AAA estimates the cost of accidents associated with teen drivers at more than $34 billion per year. All drivers have to be insured, but you don't necessarily have to add your teenager to your policy. He can be insured under a separate policy.
Each state dictates how much car insurance you have to carry. Most of the time liability insurance follows the car, so it covers anyone listed on your policy and any occasionally drivers you allow. Insurance companies usually don't consider members of your household, like your son, to be occasional drivers. If you want him covered when he's got your keys, you'll need to add him to your policy or get him one of his own.
You probably don't need to worry about adding your son to your policy while he is learning to drive. Most insurance companies automatically cover teen drivers who have a learner's permit, since they can only drive with a licensed adult in the front seat. Not every insurance policy is the same, so just how a permit affects your teen and your policy are questions you might pose to your insurance agent.
Parents' Policy vs. Teen's Policy
There's no federal law that dictates how adults must treat teens on auto policies. That means each state and company can make its own rules, and you'll have to do the numbers to see which choice works for you. You can add him to your car insurance, but get ready for some sticker shock. According to MSN Money, this usually leads to an average rate increase of 156 percent. You can avoid that if your son gets his own policy, but the premiums on his will probably exceed the bump in yours.
Some states allow teen drivers to have their own car insurance policies. Others consider them contracts, and teens can't legally enter those. Most don't allow minors to title a car in their own names either. In any case, you'll have to help your son get car insurance or put him on your policy. It's going to cost a lot, but some insurance companies offer nice discounts for teens who take driver training and keep their grades up. A little comparison shopping might turn up some better rates too.
- Rocky Mountain Insurance Information Association: Teens Shopping for Auto Insurance
- Centers for Disease Control: Teen Drivers: Fact Sheet
- Insure.com: When To Add Your Teen To Your Car Insurance Policy
- Esurance: Teen Driver Insurance Basics
- MSN Money: A Teen Driver On Your Insurance?
- Kiplinger: 8 Ways to Cut Insurance Costs for Teen Drivers
- Allstate: Is My Car Insured if a Friend or Family Member (Not on my Policy) is Driving?
Mike Parker is a full-time writer, publisher and independent businessman. His background includes a career as an investments broker with such NYSE member firms as Edward Jones & Company, AG Edwards & Sons and Dean Witter. He helped launch DiscoverCard as one of the company's first merchant sales reps.