I had two conversations with two different clients over the last two weeks about teen drivers and their car insurance policy. One client has a daughter that’s turning 16 so we worked through the steps of when to add her to the family’s policy. The second client has a daughter that’s turning 15 and will get her learner’s permit. In this instance, the mom wanted to know when she should add her daughter to the family’s insurance policy, as well as, whether it make a difference if her daughter takes a driver education class that’s instructor led or parent led.
These two questions come up almost every year, about this time, so it’s a great time to revisit what Texas requires and how car insurance companies answer both questions. When to add the teen to the car policy depends on the insurance company. Some want the teen driver listed on the policy when they receive their learner’s permit while other companies wait to add the driver when they obtain their driver’s license.
In the first case, listing a teen driver with a permit does not impact the car insurance premium. Listing them on the policy as a non-rated driver simply acknowledges there is another “driver” within the household. The reason teens with permits are not rated on the policy is they don’t have a driver’s license. The rate changes when the teen receives their driver’s license because they are now charging for the risk associated with the new driver on the policy.
For those clients who have policies with the second group of companies, I wait to add the teen driver to the policy when they receive their driver’s license. The reason is since these companies do not require a permitted driver be listed, it makes no sense to add the teen to the policy before they receive their driver’s license. The rate is adjusted at that time to account for the new driver and the risk they represent.
In both cases, there is no required age or timeframe when a driver must obtain their license after being awarded their permit. Teen drivers are only rated when they become licensed, not when they turn 16 or some other age. When the teen becomes licensed is up to the parent and the teen, not the insurance company.
Regarding my client’s second question, does the type of driver’s training class make a difference to her future rate? No! No insurance company I’ve worked with makes any distinction between a parent or instructor led driver’s education course, either on the rate or the discount awarded for the course completion. In both cases, the student driver is awarded a certificate when they complete the course which is worth a discount on the car insurance rate. The only question is which class option is best for the emotional and relational health of both the parent and the teen!
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