Teen Driver Auto Insurance Rates

Adding a Teen Driver? Prepare for Car Insurance Sticker Shock

My husband, Earl, and I are entrepreneurs who work from home and have one vehicle, a 2012 BMW 750i. We had a 2020 Ford Explorer SUV that we primarily used for business, but we sold it earlier this year and have actually been doing fine as a one-car family.

Last month, however, our 16-year-old daughter, Alexis, got her driver’s license. 

Yay for Alexis … Boo for our wallets! 


Our annual car insurance premium for the past year was $1,863. But once we called to notify our insurance company about Alexis’s license, we were immediately told by our insurer, that the next renewal premium will be $4,722 – a 153% increase! 

We’d always heard that teen drivers cause car insurance costs to surge dramatically, but this was a doozy – right amid a time of raging inflation and higher prices for everything else too.

As you can imagine, Earl and I immediately started trying to find price breaks. We asked Travelers about EVERY discount known to man to try to reduce our costs. In the end, here’s what we were quoted: 

  • Good student discount – $274 off

  • Driver training discount – $195 off

  • Online autopay discount – $190 off

  • Pay in full discount – $424 off

Altogether, we squeezed $1,083 in “savings” out of our insurance company. But our new bill will still be $3,639, which is DOUBLE our previous premiums. 

The Travelers rep (who was very nice and professional) did tell us that once Alexis goes to college, we could get another $277 discount if two conditions were met: 

  1. She attended a college or university at least 100 miles from our house; and

  2. She did NOT have a car on campus!

NOTE: We’re already getting a multi-policy discount because we’ve bundled our home insurance and car insurance with Travelers. And overall, I have to say that we’ve had an excellent experience with this company.

Just sharing this information so that those of you with teenagers or younger kids will be prepared when the time comes for them to get their driver’s permits or licenses, and they become teen drivers.

Once they do become a licensed driver, you’re obligated to notify your insurer. Otherwise, if anything happens while your child is driving, your insurance company can — and likely will – reject your claim. 

One other thing: if your child is listed as the “primary” driver on any vehicle, that will typically increase your car insurance rates too. 

So, make sure they’re NOT the primary on a car – unless of course, you actually buy them a vehicle. In that case, it’s kind of hard to claim with a straight face that they aren’t the main driver. 

Next step for us: comparison shopping using an insurance broker to see if we can get meaningfully better rates, or if we’ll be sticking with our current car insurance company.

Wish us luck before our annual car insurance renewal, which takes place in less than 30 days! 


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