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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Insurance Q&A: “Is insurance needed for a permit?”

Not if you can convince the person who you’re 15-year-old just injured (and whose car he/she just totaled) to pay for their own medical expenses and to repair their own car!

In short, yes, you need insurance for a driving permit.

Put another way, would you expect your insurer to pay for damages caused by your “permitted” driver? Of course you would.

In turn, insurance companies expect to collect the appropriate amount of insurance premium to cover the associated risk they accept by agreeing to pay for the damages in question.

“But My Teen Doesn’t Ever Drive My Car”

Wouldn’t the world be a wonderful place if teenagers always played by the rules? Turns out fourteen and fifteen-year-olds sometimes make bad decisions and drive without a permit…or even without their parent’s permission– and cause accidents! I know…gasp.

Insurers demand that anyone in the household above the age of 15 (in some cases 14) be accounted for…permit or not, and listed on the car insurance policy for just this reason.

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I’m Serious. My Teen Doesn’t Drive Our Car

Great. Insurance companies have a solution for this. They simply require that the potential driver be listed on the policy, and then excluded from coverage. Problem solved. Your money is now where your mouth is.

With your teen excluded from your auto insurance policy, your insurer can sleep comfortable on Friday and Saturday nights knowing they do not have to pay out insurance claims or defend you in court against any bodily injury or property damage that results from your teen’s negligence while operating the vehicle (they never drive).

Oh yeah, they also won’t have to pay for the dent in the bumper resulting from their teen pushing the car out of the garage in neutral and running into the mailbox…

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

Now That We’ve Got Your Attention Again

You need, and should want to have your teen covered by your auto insurance policy. And yes it will be expensive.

[Why is car insurance so high for teenagers?]

So be sure to take the time to get insurance quotes online and/or contact a local independent insurance agent to shop your premium with several different insurance companies.

Doing so can limit the hit to your checkbook.

Not shopping when adding a teen driver to a policy is about as smart as believing your teen will listen to everything you tell them.

Read more: Can I get insurance with a permit?