What To Know When Your Kids Start Driving

By Ashley Lucas (Director of Education)

It is an exciting milestone when kids start driving, but it also comes with important considerations for insurance. Here are some key points to keep in mind when your kids start driving:

1. Adding a Young Driver

Permitted Drivers: Depending on the carrier, adding a “permitted” driver may be necessary. There is no additional cost for adding a permitted driver to a policy. In most states, the driver’s permit number is the same as their driver’s license number.

Licensed Drivers: Once licensed, the young driver’s driving status should be updated to a “rated” driver.

Increased Premium: Young drivers can significantly increase insurance premiums due to inexperience and higher risk profile. Young drivers will often see higher premiums when seeking their own policy due to lack of credit (a significant rating factor) and loss of discounts (multi-policy, homeowners credit, multi-vehicle discount).

Increased Risk: Teen drivers are statistically more likely to be involved in accidents. Higher liability limits can provide better financial protection in case of serious accidents.

Negative impact: Not adding a teen driver may result in a carrier denying a claim, increasing the premium, or even canceling the policy.

2. Choosing the Right Vehicle

When insuring young drivers, premiums can be significantly higher due to their limited driving experience and increased risk of accidents. Below are factors and vehicle types that generally have the least impact on insurance premiums for young drivers:

Safety Features: Vehicles equipped with advanced safety features such as anti-lock brakes, airbags, electronic stability control, and advanced driver-assistance systems (ADAS) can lead to lower insurance premiums.

Vehicle Type: The type of vehicle can significantly impact insurance costs. Generally, sedans and family cars are cheaper to insure than sports or luxury vehicles. Examples include the Honda Civic, Toyota Corolla, and Ford Focus.

Older Models: While not too old to lack modern safety features, slightly older models can be cheaper to insure because they have a lower market value.

Low Theft Rates: Cars less likely to be stolen can also be cheaper to insure. Models that are most frequently stolen could be restricted from any coverage.

Economy Cars: Smaller economy cars that are inexpensive to repair and maintain can also help keep insurance costs down. Examples include the Hyundai Elantra, Mazda3, and Subaru Impreza.

Safety Features: If the vehicle that the young driver will be using is equipped with modern safety features such as anti-lock brakes, airbags, and electronic stability control, it may qualify for additional discounts.

3. Looking for Discounts

Adding a young driver to an auto insurance policy can be expensive, but there are several discounts that parents can take advantage of to help reduce the cost:

Good Student Discount: Many carriers offer discounts for students with a B average or higher. This discount recognizes that responsible students are often responsible drivers. Carriers will require proof of good grades by requesting a report card or transcript of the previous full semester. The age limit for a good grades discount is typically 21.

Driver Training Discount: Completing a recognized driver education course can also be a discount.

Safe Driver Programs: Some carriers offer Telematics programs that monitor driving habits and reward safe driving with lower premiums. Some carriers will increase premiums with poor driving. Your agent can provide more information regarding your carrier’s program.

Away-at-School Discount: If the young driver attends school more than 100 miles away from home and does not have regular access to the family car, they may qualify for a discount.

Multi-Car Discount: Most carriers offer a multi-car discount for policies with more than one vehicle.

Companion Discount: Combining auto insurance with other types, like homeowners or renters insurance, will often earn a companion discount if written with the same carrier.

4. Educating Your Teen

Safe Driving Practices: Emphasize the importance of safe driving habits, such as obeying speed limits, avoiding distractions, and not driving under the influence.

Understanding Insurance: Ensure your teen understands how insurance works and the consequences of accidents or traffic violations on insurance premiums.

5. Reviewing and Updating Your Policy

Annual Review: Regularly review your policy to ensure it meets your needs and to check for any new discounts or coverage options.

Life Changes: Update your policy to reflect any changes, such as your teen getting their own car or moving away for college.

Remembering these key points and staying informed about insurance options and potential discounts will help you make the best decisions when adding a young driver to your policy. By educating your teen about safe driving practices and periodically reviewing and updating your policy, you can ensure that your family is well-prepared for this significant milestone. Additionally, choosing the right vehicle with safety features and considering higher liability limits will provide better financial protection. Keep these tips in mind to help navigate the process of insuring a young driver in a responsible and cost-efficient manner.