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Insuring Young Drivers

Helpful tips when it comes to the direct costs of insuring a teenager.


Any parent who has placed their life in the hands of their young, 16-year old’s driving ability knows that this is a truly terrifying experience. Eventually, they become responsible, experienced drivers who understand and follow the rules of the road. But for a few years, youthful operators pose the greatest risk to roadway safety. In fact, in 2016 in the USA, the fatal crash rate per mile driven for 16-19-year-olds was almost three times the rate for drivers over the age of 20. This is a scary statistic.

Another scary reality is what happens to your insurance policy when you add a youthful driver. Because Insurance companies pay for the claims caused by youthful drivers, the premium charged to insure them can be a shock to the system. Here are some helpful tips when it comes to the direct costs of insuring a teenager.

Direct Costs

Look for discounts

Most companies offer discounts for your teenagers’ participation in a driver safety school. There are also usually discounts associated with good grades. Make sure you talk to your agent about these possibilities.

Consider new software

Many insurance companies have programs that offer significant savings based on monitoring your driving. Whether it is an app on your phone or a device you install in your car, companies can track your speed, braking, driving patterns, etc. and reward you for safe driving. This is a good way to offset the premium increase associated with adding your teen driver.

Now, let’s talk about indirect costs associated with insuring a young driver, and what to do about it. I would give this advice to anyone, but considering the horrifying statistics surrounding youthful drivers, the urgency is magnified. Here are some practical steps.

Indirect Costs

Increase your limits

While this will result in a modest increase in your premiums, it could pay big dividends in the long run. If you or your teenage driver were at fault in an accident, and your limits prove to be insufficient, it would cost you much more than $10 a month in premiums. It could cost your house, your future earnings, and result in serious financial hardship. Increasing your limits is well worth the investment, especially with your youthful operator behind the wheel.

Obtain an umbrella policy

An umbrella is a fantastic way to ensure peace of mind while your son or daughter is behind the wheel. For around $250 a year, an umbrella policy would give you an extra $1,000,000 of liability protection if your auto policy proves insufficient. This is a very inexpensive way to protect your assets in the event of a large or catastrophic loss.

I will always remember being in the back seat of my family’s van as my oldest brother learned to drive. Rather than braking as he took a left turn, he accelerated, and we almost found ourselves in the neighbor’s kitchen. Nobody is immune, but young drivers pose a unique challenge to roadway safety. There is no way to eliminate all risk associated with your youthful driver. However, insurance is a very useful tool to protect your family and your assets.

Contact us if you have any questions or concerns! Read more about why auto insurance rates continue to increase.