Adding teen to car insurance policy doesn't have to hurt

 I recently added my teenage son to my auto insurance policy, and to my shock, instead of facing a skyrocketing premium, my payment went down about $200.

Like most parents, I was dreading the idea of insuring a 16-year-old. Auto policy payments typically increase 50 to 100 percent when you add a teenager, said Jeanne Salvatore, spokeswoman for the Insurance Information Institute, an industry group. Teenage boys generally cost more, but the gap is decreasing because accidents by teenage girls are climbing, she said.

To ward off some of the financial pain, I had a lengthy discussion last year with my insurance agent when my son took his driver’s education course before his 16th birthday. I took every suggestion the agent made but still expected a whopping increase.

It turns out I was happily wrong. While all of the strategies I took may not work for everyone, parents should ask their agent about these ideas before adding their teenager to their policy.

1. Nonprimary driver status. By having more people on the policy than cars in the garage, you can save big bucks, my agent told me. In other words, consider at least delaying for a few years your teenager having his own car. (Easier said than done. Nearly 75 percent of the teens in a State Farm insurance survey reported being the main driver of a car.)

This can save you more than money. A study by State Farm and The Children’s Hospital of Philadelphia released this month in the journal Pediatrics found that teens who reported being the main driver of a vehicle were twice as likely to be involved in a crash, compared with teens who said they shared a vehicle with other family members.

My agent assigned my teenager to our oldest car as a nonprimary driver. Some insurers automatically assign new drivers to a family’s most expensive vehicle, so be sure to tell your agent which car your teenager will be driving.

2. Drop comprehensive and collision coverage. Only liability insurance, which covers damage you do to others, is required on a vehicle in Texas. One of our cars is a 1999 van that isn’t worth comprehensive coverage (damage from things like fire, flood, hail and theft) or collision (damage to your vehicle in an accident).

Dropping that coverage means savings, but it’s only recommended on vehicles valued at around the same or less than the annual premium amount. Remember, you take on more financial risk with this strategy in the event of an accident, so make sure you have savings you can use immediately to replace a vehicle if necessary.

3. Stay on permit. Our insurer, Farmers Insurance, didn’t require my son to be on our policy until he got his full license. Because of the graduated license program in Texas, he was able to stay on his driver’s permit (which requires an adult driver in the passenger seat) until he was nearly 17. This is not true of all insurers; contact your agent when your child gets his permit.

It turns out we weren’t alone in delaying his license. Because of the graduated license requirements and higher insurance costs, less than a third of 16-year-olds had their driver’s license in 2007, compared with 43 percent in 1998, according to the Federal Highway Administration. By age 17, barely half have a license, compared with 60 percent in 1998.


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