How to Save When Adding a Teen to Your Policy

By Penny

Question: My youngest child will be getting his license soon. What can I do to help save money on car insurance?  I remember how my auto insurance premiums doubled when I added my oldest child (who now is at college and has a car and auto insurance policy of her own) and I would like to stop that from happening if possible.

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Answer: You're correct; adding a teen driver to your policy is expensive.  As you learned from your oldest child, car insurance companies find young drivers pose a lot of risk and thus charge more to insure them - sometimes resulting in your car insurance rates doubling. (See “What a teenager does to your car insurance rates.”)

There are ways to offset the higher premium that comes from adding a teen driver.  Some are discounts (see our guide to car insurance discounts); others are just common-sense guidelines to follow and may not reduce your auto insurance rates now but will help you keep reasonable rates by having a child who is a safe driver.

  • Make sure your teen takes a driver's education course.  Some auto insurance companies will offer a discount of around 5% if a new driver takes a driving training course that has both classroom and behind-the-wheel instruction.  
  • Have your child keep a driving record clear of accidents and tickets. Even if you don't receive a discount for your son taking a driver training class, the lessons he will learn should help him become a better, safer driver, which in turn should help you get more affordable rates since a clean driving record means a lot to auto insurers. (See “Keep your driving record clean - and car insurance cheap”)
  • See if your teenage student is eligible for a good student discount.  If your child gets good grades (3.0 grade point average or higher), then many car insurance providers offer a discount of 5 to 15%. (See our guide to young driver discounts.)
  • Get discounts for the car your child is driving.  Make certain your insurer is giving you discounts for all the safety features your car offers as well as any anti-theft device the car may have.  Getting the VIN etched on the windows can even give you an extra discount.  (Look at our list of best cars for teens.)
  • Monitor his driving.  By allowing a telematics device to be plugged into your vehicle and monitor the driving behavior of drivers, you may be eligible for a big discount (up to 45% -- but that much is rare). A bonus benefit is that it's been said that when drivers know they are being monitored many become better drivers, a plus for any parent of a young driver.  (See our “Guide to pay-as-you-drive insurance plans”)
  • Review your car insurance coverages.  If you have an older car, then you may want consider dropping collision and comprehensive from it to save money.  Or if you keep these coverages, you may want to see about raising your deductible amounts to reduce costs.
  • Review who needs to be listed on your policy. Since your oldest child is now away at college and has her own car insurance policy, see if you can drop her from your policy and lower your premium. However, make sure she'll still be covered as a permissive user if she comes home to visit and uses your car. (See "Kids moved out?  You might have to prove it”)

Once your son is added to your car insurance policy and you know what rates are with your current auto insurance provider, comparison shop to make sure you are getting the cheapest rates possible.  By shopping around you can save hundreds, if not thousands, each year.  (See “12 ways to double-check your savings.”)

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