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If you have a learner's permit, you'll need car insurance — but not necessarily your own. Drivers who are learning the rules of the road can join their parents' policy. But drivers who can't or don't want to join their parents' policy still have options.
Every insurance company has different rules about when learners must be added to a policy, and many offer discounts to offset the high costs of insuring drivers with learner's permits.
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How do insurers handle car insurance for learner's permit drivers?
Even with fewer driving privileges, learner's permit drivers must be insured. They're just as vulnerable to accidents and need the financial security insurance provides.
In most cases, learner's permit drivers are teens living with their parents. These young drivers are generally covered by their parents' policy when they receive their learner's permit and don't need to buy their own policy.
However, insurers take different approaches to young permit drivers. Policyholders may have to list every member of a household who has reached driving age on the policy. With other insurers, you won't need to do this until your young driver has a license.
For example, if a young driver in your household has a learner’s permit, Geico requires you to list the driver on your policy. As long as the young driver only has a permit, your policy premium will not increase. Once the young driver obtains a license, Geico will factor them into your policy rate.
Reach out to your insurer and see how they handle car insurance for permit drivers. Don't skip this step. If you don't properly list drivers as your insurer requires, then you may have to pay out of pocket for damage after a car accident.
The good news? Insurance companies usually don't increase rates until after a student driver receives their license. At that point, rates tend to significantly increase. But there are still ways to get cheap car insurance for teens.
Teen driver insurance costs
Out of every age group, teens are the most at risk for car accidents. That's especially true from ages 16 to 19, according to the Centers for Disease Control and Prevention.
Because teen drivers pose such a high risk, adding them to an insurance policy increases rates significantly. The cost of adding a 16-year-old driver to a six-month family policy can range from $1,293 to $4,831.
However, those rates may vary significantly based on the age and gender of the teen driver being added to the policy. Young male drivers are more likely to engage in risky behaviors and are more likely to be killed while driving than young women. This means a family's policy rates will likely increase more when adding a male teen driver than when adding a female teen driver.
Car insurance discounts for teen drivers
Many insurers offer discounts to help families manage the high costs of insuring their teen driver. Ask your insurer if these discounts are available to you:
- Good grades: Have a high school or college GPA of 3.0 or higher? Insurers are often willing to reward you for your academic achievement.
- Tracking devices: By using a telematics device to share your data with your insurance company, you can prove you're a safe driver worthy of a lower rate.
Driving classes: Your insurer may discount your premium if you take a driver's education course — but it depends on state law.
- Living away from home: If you attend boarding school or college more than 100 miles away from your family's home and don't use the car for a significant chunk of the year, you may be able to get a reduced rate.
- Paying up front: While most policyholders choose to divide their insurance into monthly payments, paying for an entire plan up front can reduce costs.
In addition to asking for discounts, families can also adopt other money-saving strategies. For instance, driving an inexpensive car can keep premium costs down because it costs less to repair or replace a cheaper car.
Parents and teens should also shop around for the right car insurance. While it's tempting for parents to default to their own insurer when adding their teen child to a policy, other companies may offer better rates and help families save. See this milestone as a chance to re-evaluate your options and choose the one that best suits your family's needs.
Can you get car insurance with a permit?
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Adding permit drivers to a family policy might be the most common way for learners to get insurance, but it's not the only approach. You can buy a car insurance policy just with a learner's permit. Once you have that insurance policy in place, you can also purchase and register a car in most states — even if you are only 16 years old.
While this approach gives 16-year-olds a good deal of independence, that independence comes at a cost. A new driver at this age pays an average of $5,944 for a six-month plan if they purchase their own insurance. By contrast, a new driver added to their parents' policy may pay as little as $1,293 — a $4,651 difference.
The single best thing you can do to lower your expenses as a young driver is to stay on your parents' insurance policy.
On parents' insurance policy
Total cost for six-month policy
However, not all learner drivers live with their parents. Many people learn how to drive much later in life and can't be added to a parent’s policy.
You still have options if you're in this situation. Permit drivers who live with a spouse or significant other can sometimes be covered under their plan. Be aware that married couples may receive better deals than unmarried couples, and unmarried couples may see their rates go up when a permit driver is added to the policy. Reach out to your insurance company and see which options are available to you and your partner.
If you are a permit driver who lives alone, you may find it difficult to find an insurer that will cover you until you get a license. Many national insurers do not offer insurance to first-time learner's permit drivers. Instead, contact smaller local insurance providers and explain your situation. You will likely pay more, but the situation is not without precedent.
For new drivers, getting a permit is an exciting time. Obtaining auto insurance coverage is a crucial first step to new levels of responsibility and freedom.