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teen driver insurance basics

Whether you’re a parent looking to cover a teen driver or a teen driver yourself, you’ll find answers to some essential questions here.

Teen driver insurance

Adding a teen driver to your policy

Teen driver coverage options

Teen driver insurance

Why do teen drivers have, on average, higher insurance rates?

New drivers, particularly young drivers, have higher insurance rates for 2 reasons: inexperience behind the wheel and immaturity. Just like anyone attempting to master a new skill, teen drivers tend to make mistakes and take risks that more experienced drivers won't. And increased risks translate to increased insurance rates.

The numbers paint a clear picture. Though teen deaths in car crashes have dropped dramatically since 1975, the figures are still staggering: 2,823 teenagers aged 13 to 19 died in motor vehicle crashes in 2012. And despite the drop, motor vehicle accidents remain the number-one cause of death for teenagers.

Teenagers are also the most likely to be involved in accidents, with 16-year-old drivers over 2.5 times more likely to be in a crash than 20- to 24-year-olds.

Crashes per million miles driven, by driver age

And the numbers only get worse when teens drive with other teens in the car. In fact, the likelihood of teen driver death increases with each additional teenage passenger.

Danger of driving with passengers, by driver age

Source: Insurance Institute for Highway Safety

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At what age do insurance premiums tend to drop?

Most drivers' insurance rates drop at age 25, and continue to decrease until age 70. But the rate drops aren't automatic. A risky driver with tickets, claims, or crashes won't necessarily see a favorable change in insurance rates — yet another reason to stress safety to your young driver.

The good news is that Esurance offers most drivers under 25 a discount for every claim- and ticket-free term they're insured.

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What do I need to know about teen driver car insurance rates?

First, brace yourself for an increased premium. Because insurance companies have to pay more claims on incidents involving teen drivers than more experienced ones, young drivers' car insurance rates tend to be significantly higher.

There are ways to offset this. You can make sure your teen driver takes a quality driver's education course and keeps the grades up to qualify for a Good Student discount. Ask your insurance agent how the prices will differ if you add your teen to your policy or purchase a new one in your teen's name. If you're an Esurance customer, give us a call at 1-800-ESURANCE (1-800-378-7262) for expert advice — we're here to help.

Keep in mind that the type of car your teen drives affects the rate as well. Select a model with a track record of safety and reliability to ensure a reasonable rate. You can find reliable model safety information through these 4 sources:

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Adding a teen driver to your policy

Should teen drivers get their own policies or go on their parents' existing policy?

That depends on the circumstances. When researching how to insure a young driver, check with your current insurer to see how each option will affect your rates. In most cases you'll save more by adding your teen to your existing policy, especially if you're adding another car for him or her to drive (which can score you the Multi-Car discount), but you may find that a separate policy for your teen works better for your needs. Keep in mind that, if you do add your teen to your policy, his or her driving record will affect your rate.

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My teenager just got his license; do I have to add him to my policy?

Whether you add your teen to your policy or get him one of his own is up to you. Either way, your son needs insurance. Adding him to your existing policy may hike up your rates, but you may also net discounts for his good grades and for having multiple cars on a policy.

On the other hand, if you purchased an aging “beater” to help him get from A to B, a separate policy without comprehensive and collision coverage might save you some cash. Your teen can purchase a policy of his own, though this is unlikely to be a cost-effective option since he won't have many of the characteristics that garner you better rates, such as having multiple insured cars, being married, or having a low-risk job.

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When should I add my daughter to my insurance policy? The day she gets her license?

Many insurers require that all licensed drivers in your household have some form of car insurance, which means that the moment your daughter is licensed to drive, you might have to add her. On the other hand, most states don't require that a driver with a learners permit be individually covered.

Note that you don't necessarily have to add your child to your car insurance policy. Many car insurance companies will sell individual policies to young drivers. However, you may not be able to take advantage of certain discounts, such as multi-vehicle, if you select this option — and your young driver's premiums will most likely be quite high.

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Do I need to add my teenager with a learners permit to my policy?

That depends on your state's insurance requirements, but in most cases, your policy will protect your young driver until he or she is licensed.

While many states don't require insurance for a young driver with a learners permit, all states but New Hampshire mandate coverage for licensed drivers.

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Do teen drivers have to be insured on all cars in the household?

Most states don't require car-driver matching, meaning that all licensed drivers in your household will be covered to drive all cars in the household unless you explicitly exclude them. In states that do require car-driver matching, each driver in the household will be assigned as the primary driver for one car, so you can specify which, if any, car your teen will be the primary driver on. Note that this isn't the same as not insuring your teen driver on particular cars.

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Listing my child on my policy made my premium too high. Do I need to keep him listed?

One way or another, your child needs car insurance. You could buy an individual policy for your child, but it'll probably cost more than what you're paying now since he won't benefit from all your car insurance discounts. You could remove him from your policy if he's not going to drive (ever), but even if he doesn't, his own rates will be higher down the line due to the lapse in coverage.

Keep in mind too that if a situation should arise in which your child absolutely needs to drive, he'll be uninsured, which could lead to declined claims, tickets, and fines.

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When you add a teenage driver to a policy, are there specific coverages you should have on your car?

There aren't any required coverages unique to teen drivers. Teens must have their state's required coverages, which will be added automatically, and you can add any additional coverages you feel are appropriate. Towing and labor coverage, for example, may be particularly useful if your teen isn't familiar with basic car repair.

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Teen driver coverage options

Will my car insurance cover me if I'm delivering pizza in my vehicle?

That depends on your policy. Most personal car insurance policies won't cover you if you're transporting goods or people in exchange for a wage. If you plan to take a pizza delivery job, or any kind of delivery job, check with your car insurance company first. Though getting the additional coverage necessary to protect you while delivering pizzas might mean a rate increase, it'll ensure optimal protection.

If you're an Esurance policyholder, you can check your policy's declarations page online or call us at 1-800-ESURANCE (1-800-378-7262) to see if you'll be covered.

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I installed some sweet parts on my car. If they’re stolen, will they be replaced with OEM parts?

It depends on the type of part and your insurance company's policies. Many car insurance companies direct their repair shops to use original equipment manufacturer (OEM) parts if doing otherwise will jeopardize a warranty, or when the part is structural and contributes to your car's overall crashworthiness. OEM parts are those made by the manufacturer of the car and tailored specifically for it. But they may ask repair shops to use aftermarket parts (which are manufactured by third-party companies) when possible since aftermarket parts tend to be cheaper than their OEM counterparts.

Note that while all states have standards regulating aftermarket parts use, they don't all require that the repair shop inform you what they're using. If you're concerned about the types of parts used in replacement work on your car, speak with your claims rep and the repair shop to make your preferences clear.

Note too that a standard Esurance policy won't cover most parts and equipment you add. If you've modified your car's equipment with custom parts, be sure to add our customized parts and equipment coverage to ensure that those sweet parts are protected.

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Related link

Help your teen avoid distracted driving
With Esurance DriveSafe™, you can get essential information about your teen's driving so you can coach them on specific habits.

This page is intended to provide you with general information about young drivers, and to help you understand the various kinds of coverage. It does not describe or refer to any specific policy or coverage. For information about your particular coverages, we encourage you to read your policy contract and consult your insurance representative with any questions.

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