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Adding a teen driver to your insurance plan

August 18, 2015

After 16 long years, the time has finally come:  Your teenager has a driver's license—and wants to borrow your car. But before you hand over the keys, they need to be covered by car insurance.

Adding a teenager to an insurance plan can be expensive and complicated. Talk to your insurance provider for information on what is required.

As any parent of a driving teen knows, this is not easy or cheap. In fact, according to data from Insurance Quotes, adding a teenage driver to an insurance plan can raise the rates up to 70 percent, like in New Jersey. The amount a plan will go up depends on the state, but the fact remains throughout all 50 states that insuring a teenage driver is expensive.

That's not to say that it would be better if the new addition to the driving community had his or her own plan. Actually, that would end up being more expensive in most cases. According to the same data from Insurance Quotes, buying a teen their own plan would cost 11 percent more in New York than adding them to an existing plan. In most cases, the most cost-effective route for parents is to add their new driver to their existing plan. To do this, there are several things that need to be done.

Adding a teen to an insurance plan is expensive but costs go even higher with individual plans.Adding a teen driver to an insurance plan is expensive, but not as expensive as getting a teen their own insurance plan.

First, contact your insurance agent

It's uncommon that a teen with a learner's permit needs to be added to an insurance plan, but there are some plans that do require it. As soon as your teen gets his or her permit, contact your insurance agent and figure out what the rules are. At the very least, you will learn more information for when you do need to add them.

Contacting your insurance agency is a good idea if parents don't live together but have shared custody. Some insurance providers will require only one parent to add the teen to their insurance plan; others might require both. It's important to hash out these details before a teen hits the road.

Decide what car your teen will drive

In some homes, the rule is the newest driver drives the oldest car. This is likely to be the least expensive way to insure a young driver, plus damages to a beat-up car might not be as big of a deal to the owner as damages to a brand new car. However, it's also important to think about safety; newer cars are more likely to have updated safety features. Teens are more prone to accidents than experienced drivers, so it might be a good idea to give them the safest car to drive.

"Teach your teen how to drive safely in all conditions.”

Teach your teen how they can help

There are some ways the new driver can help to keep the rising costs down—at least a little bit. Some insurance companies will give discounts to good students. If your teen is getting A's and B's, tell your insurance provider. Drivers with good driving records get discounts, too; teach your teen how to drive safely in all conditions, like bad weather, heavy traffic and in the dark. Preparing them for the day when they might have to drive home alone in a thunderstorm will help them to stay calm, collected and safe.

Talk to your insurance provider about college

If your teen goes to college but doesn't take a car, you might be able to get a discount since they aren't driving the car for most of the year.

There is a lot that goes into a teenager getting their driver's license. Keeping your insurance provider informed on the changes that are happening in your household will help make everything go smoothly.