Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001 and has an undergraduate degree from Manhattan College in ...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Joel...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Jul 19, 2021

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teen driver

Insurance Q&A: “Am I required to have auto insurance on a teenager?”

The teenage years are hard enough on a parent without having to worry about things like auto insurance.

You’ve got a lot to worry about, but one of the greatest financial concerns for all parents is the idea of their teen behind the wheel of an automobile, along with the astronomical price of auto insurance.

This leaves many wondering if they are required to buy auto insurance for their teenager.

The short answer is no, it’s not explicitly required by law to pay for car insurance for your teenager.

Specifically, you are not required to pay for auto insurance for your teen to drive a vehicle if they ARE NOT actually going to drive!

So from a legal standpoint, you do not need to pay for your teenager’s car insurance.

As far as the car insurance companies concerned, you have to acknowledge the fact that your teen is “of driving age” and decide if you want to insure them or put your money where your mouth is (with regard to your teen NOT driving) and add them to your policy and exclude them from coverage.

Most insurance policies require all members of a household above the age of 15 to be listed on the auto insurance policy, leaving you with two options.

Option 1:

Exclude your teenager from your auto insurance policy. This means your teen will be listed on the policy as someone who resides in the home and will not drive the vehicle(s) covered under the policy.

But don’t take the exclusion lightly. Your insurance company will deny a claim if your excluded teen “borrows” the car and gets into an accident. You could be out a car and in court getting sued personally for the damages. Be sure to have that discussion with any excluded teen drivers.

History tells us teenagers have a habit of being rebellious and breaking our rules…including rules about not driving your car. Your best bet is to cough up the money to insure your teen.

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Option 2:

Bite the bullet and list your teen as an eligible driver of the vehicle(s) on your car insurance policy.

Expect your insurance rates to increase tremendously when insuring a teen driver.

[How much is car insurance for a 16 year old?]

…And for the car to be low on gas (or empty) the next time you get into it.

It’s never easy to watch your teen drive off in the car for the first or even hundredth time, but it may help calm your nerves knowing you’re covered if they cause an accident.

How Can I Reduce the Costs of a Teen Driver?

There are many ways to reduce your new car insurance premium once you add your teen. The trick is to take advantage of the many discounts that may be available to you.

For example, your teen may have taken a defensive driving course, or perhaps they qualify for the good student discount.

Insurers are constantly looking for reasons to lower car insurance premiums to keep you from switching insurance companies.

The key is qualifying for discounts that prove you (and your teen) have a smaller chance of getting into an accident than the next teenager.

(photo: ice.bluess)