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: Sep 28, 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 any teenage driver who has yet to get their license and still has a driving permit. For that to happen, your insurance company needs to know that they exist.

Put another way, would you expect your insurer to pay for damages caused by your ‘permitted’ driver? Of course you would. You want to make sure that your family is kept safe, financially and otherwise.

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.

What happens if my teen doesn’t 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! Shocking, isn’t it?

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. It saves a lot of time and money for an insurance company to be aware of every possible person who could be driving your insured vehicle, whether or not they have a license.

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What do I do if I want to add a teenage driver to my policy?

That’s the best part – insurance companies have options 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. If you truly believe that your teen isn’t driving your car, consider this added peace of mind.

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 that they totally never drive.

As an added bonus, your insurance provider also won’t have to pay for the dent in the bumper that was resulting damage from a teen pushing the car they never drive out of the garage in neutral and running into the mailbox…

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

They’re not even a licensed driver, do they really need to be added to my policy?

Any auto insurance company is going to want to know about any potential drivers with learner permits.  You need, and should want to have your teen covered by your auto insurance policy. Yes it will be expensive, but it’s also going to be worth it. This is an exciting time for your teen – teaching them to practice safe driving habits starts with getting them covered by your insurance. If they’re to grow up into a safe, experienced driver, include them in the process! Show them how important it is to have coverage, and what it means to have driving privileges. Maybe then you won’t wake up to find your car missing from your garage at five in the morning.

[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 that an auto policy can make to your checkbook. Affordable car insurance might seem like it takes a lot of work, and it does. But in order to keep your family safe, you’ll want your insurance carrier to know you have a teen who maybe, just maybe, drives your car sometimes.

You may even find that there’s a company out there that offers some form of family policy. That could potentially save you money too. Not shopping around when adding a teen driver to a policy is about as smart as believing your teen isn’t sneaking out of the house in your vehicle.

Read more: Can I get insurance with a permit?