Can a Teen Driver Get Their Own Auto Insurance Policy? How Does Car Insurance for New Drivers Work?

For many teens, learning to drive represents an exciting rite of passage. However, for many parents, this can be one of the most frightening and stressful times of their lives. But if you think watching a child finally start getting behind the wheel is scary enough, we've got something else for you: sky-high car insurance rates.

With that said, can a teen driver get their own auto insurance policy then? How does car insurance for new drivers work?

How does car insurance work for new drivers?

According to Bankrate , the average annual cost of auto insurance for beginners, particularly teens, ranges from $2,313 to $4,837 in Illinois; and between $1,954 and $3,919 in Indiana. When the driver reaches age 25, those figures drop to $1,909 and $1,681 respectively.

If you're wondering why beginner car insurance is so expensive, especially for teen drivers, here are a few reasons:

• Lack of a driving record. Being that you have just started driving, insurance companies have no way of assessing how cautious or risky you are as a driver.
• More expensive cars . Drivers starting their driving record with a new car, or even a low-mileage used one, will be charged higher rates due to the higher cash value of their vehicle.
• The risk is higher . According to data from the Insurance Institute for Highway Safety, drivers between the ages of 16 and 19 have 26 more accidents per 1M miles driven than drivers between the ages of 20 and 24.

If your child is under the age of 18, most insurance companies will give you the option of adding them to your same car insurance policy. However, if they are over 18 it would be logical for them to get their own policy.

Can a teen driver get their own auto insurance policy?

It is possible for them to get their own auto insurance policy as long as they are over 18 years old.

However, if they are 17 or younger, they will need a parent or guardian to sign the policy for them, as the law states that minors cannot enter into legal contracts.

This shouldn't be a problem, as the title of the car is supposed to be in the name of a parent or guardian. In most states, minors are not legally allowed to purchase property such as vehicles or houses, although there are some exceptions. For example, declared emancipated minors in Illinois are allowed to enter into contracts, as well as make large purchases and sign insurance policies in their name.

So, if this doesn't apply to your child and you signed their car loan or purchased the vehicle outright with your own money, you should sign the insurance policy as well.

Of course, if your teen's car is in your name, the process of adding it to your policy is pretty simple. You should go that way.

Get car insurance for your teen

As you can see, car insurance is a necessary cost for every driver, novice or not. At Magnum Insurance we want to provide you with the best coverage for all your car needs.

Car insurance: age and experience are key in the price

A driver under 25 years of age pays 158% more for his car insurance than one of 40. As he adds years in age and in years of license, the price is reduced.

Everyone knows that young people are considered by insurance companies as risky drivers due to their accident rate. Higher premiums are applied to young people that can even triple the price of insurance than what other more “safe” profiles pay.

Insurance companies have two key factors that determine the price of car insurance: the age of the driver and the experience . Thus, as drivers add years of seniority to their driving license, the price of car insurance goes down . Those who have between 15 and 20 years of experience as drivers are the ones who pay the least for their insurance. 

At what age do you pay more for car insurance?

Drivers between the ages of 18 and 25 pay an average of 1,581 euros for their car insurance , according to the Kelisto.es website. This means that young people pay 105% more for their policies than drivers between 26 and 35 years old, who pay an average of 768 euros , and 158% more than an insured person between 36 and 50 years old, who pay an average of 612 euros for his car insurance.

Comprehensive insurance is the modality that registers the greatest inequality. A driver between 18 and 25 years old pays 182% more than one between 36 and 50 years old. The former pays an average of 3,283 euros and the latter, 1,160 euros. For its part, basic third-party insurance for a young driver costs an average of 709.74 euros, 83% more than a driver between 26 and 35 years of age, who pays an average of 386.25 euros for the same insurance, and 114% more than an insured between 36 and 50 years old (331.24 euros of average premium). 

Car insurance: tips to save 

*A very common practice to save on car insurance is to take out insurance as an occasional driver, without appearing as a policyholder, and for the policyholder to be a relative so that the insurer can assess their seniority and years of license. Although it may seem like the best option, in the long run it is worse. If from the time you get your license at the age of 18 until you turn 26 you remain as an occasional driver and not as an insurance policyholder, when you go to hire one as the owner, you will start from scratch. You will not have seniority. 

*Before hiring car insurance, compare the offers of different insurers. Don't be put off by the price alone. The cheapest is not always the best, since a small price difference may be justified if the insurance has more extensive coverage.

*It is advisable to adapt the car to the driver's profile. A novice driver will pay less for insurance if he has a car with a smaller cylinder capacity and even a second-hand one .

*A very interesting option is to opt for specific car insurance for young people such as Generali and Mapfre, which offer young people between the ages of 18 and 30 the option of contracting “pay as I drive” products.