Options for Adding a Teen to Your Car Insurance Policy

Many insurers only hike insurance premiums after a teen receives a driver's license. So, you should list your permit-holding teen on your policy, but in most cases you won't feel the full insurance effect of having a teen driver until a license has been granted.

Considering this, it can be smart to encourage your teen to retain the driving permit status for as long as possible; you can often renew a driving permit (or get an extension) from your DMV for little cost. However, doing so means your teen must continue to abide by the stricter driving requirements imposed on permit holders.

(And let's face it: Teens will not be too happy about holding off on upgrading to a full license―even if it does mean saving Mom and Dad some money.)

Before adding your child to your policy, see if might be cheaper to buy a separate policy. You can quickly get a ball-park estimate by obtaining quotes from providers online. This should help you determine if an individual policy could be a viable option for you.

Should you choose to opt for your own policy, see if your carrier will allow you to add your teen as an "occasional" driver. This will diminish the damage to your checkbook.

Also, ask if you can assign your teen to the least expensive car listed on your policy. Again, this can minimize your premium increase. Just be sure, though, that your teen only drives that car, and doesn't sneak out for a night in your Porsche.

Other Ways to Save Money on Teen Car Insurance

Besides investigating the options listed above, consider the following suggestions. Taking a number of these actions can reduce the expense of adding a teen driver to your policy―possibly by 50% or more.

• Have your teen drive a car model with an excellent safety record and the latest safety equipment. Bonus points if it's a little older, a four-door sedan, and not appealing to car thieves. Visit insurance company sites to see what types of cars they prefer insuring.

• See what discounts your teen may qualify for, such as discounts for being a good student, taking driver education, and being a low-mileage driver.

• See what discounts you may qualify for, such as discounts for combining coverage, being a safe driver, and taking safety education.

• Comparison shop among car insurance providers; don't simply just look towards your current provider.

• Limit the amount of driving your teen performs.

• Emphasize to your teen the consequences of risky driving behavior, both from a safety and financial standpoint. If necessary, invest in a global positioning system (GPS) device that alerts you to where, how often, and how fast your teen drives.