For teen drivers, getting a learner’s permit is a rite of passage. With this new freedom, however, comes new financial responsibilities. Driving and owning a car will come with expenses like gas and oil changes and regular vehicle maintenance. One of the big expenses that young drivers will face is auto insurance. Whether a teen driver has a learner’s permit or a full driver’s license, any driver on the road must have auto insurance. The consequences of driving without insurance can range from fines and license suspension to jail time. While everyone on the road needs to have some coverage, new drivers with a learner’s permit usually don’t need to have their own insurance policy.
In most places, state laws mandate that all drivers maintain a minimum amount of liability coverage. This means that a minimum amount of car insurance is required even for teen drivers with a learner’s permit. Liability insurance, however, will only cover bodily injury and property damage claims by other drivers if you are at fault for an accident. Since many young drivers with a permit don’t own their own car, they may only need liability coverage at first.
So, do you need insurance with a learner’s permit? Teen drivers who are on the road for the first time are required to obey the insurance laws of their state. However, they are typically allowed to be added to their parent’s insurance policy. Let’s take a look at insurance options for teenage drivers with a learner’s permit.
Parent’s Insurance Policy
As discussed, a teenage driver can usually be added to their parent’s policy. This is the most common circumstance for young drivers with a permit or driver’s license. Insurance companies have varying rules, however, about insurance coverage for a permitted driver. Some insurance companies have provisions that cover drivers with a permit under an existing policy. In these situations, the teenage driver will typically be covered without any impact on rates or premiums. In other cases, however, insurance companies will require all drivers to be added to the policy. It will be a good idea to call the insurance company to inquire about their policies for a permitted driver.
As discussed, many insurers allow young drivers with a permit to be covered under an adult driver’s policy without a rate increase. This will usually last for a year or until the teen becomes a fully licensed driver. Once this happens, insurance rates can significantly increase for covering a teen driver. This is because teen drivers from 16 to 19 years of age are at an elevated risk for accidents and injury. Insurance providers recognize the risks of insuring young, inexperienced drivers and offer increased premiums to help mitigate some of these risks.
Parents who add teens to their policy can usually see a rate increase of $1,500 a year or more. Teens who purchase their own policy can expect a premium of $8,000 or more per year. The good news is that insurance carriers understand the financial impact of increased rates and offer discounts to help offset the costs. Teens can also qualify for good student discounts to receive rate reductions based on good academic performance. It might also be beneficial to shop around for different insurance policies and rates.
Getting a learner’s permit and jumping behind the wheel of a vehicle can be an exciting time for new drivers. Before they hop into the car, however, you’ll want to make sure that the teen is insured in the event of an accident. Most states require that all drivers have liability insurance. As a result, even drivers with a permit need to be covered by a policy.