Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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The lowdown...

  • When a teenager lives in your home, they need to be listed as a household resident on your auto insurance policy
  • Most carriers will ask applicants and policyholders to disclose all residents, licensed or not if they are 14 or older
  • If your 16-year-old does not have a license, they will not be a listed driver or rated driver on the policy
  • When a youthful operator has solely a permit, they won’t be rated on the policy or affect the premiums
  • Your licensed 16-year-old does need to be an occasional operator on the policy when they are in your home

Raising a teenager isn’t easy for most parents. It’s your job as a parent to raise your child to be self-sufficient and responsible but it’s also your job to keep your impulsive teenager safe.

One of the challenges you’ll face, as you have to do tough decision making, is whether or not you should give your child more freedom by allowing him or her to start the licensing process. The freedom can be terrifying for parents.

Getting a license as a teen isn’t as easy as filling out an application and getting a parent’s signature.

Teens must prove that they have learned the driving laws and that they have the practical skill needed to safely drive in public areas. To provide this proof, they have to complete a graduated licensing program.

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Always Disclose Residents Who Live in Your Home


You have to abide by the terms of your auto insurance contract. One of the terms that are not as obvious as others are that you must disclose the names and ages of all of the residents in your home.

This disclosure includes unlicensed residents and also residents who have access to your car. As long as the person is 14 or older, they need to be disclosed.

If your teenager is not yet disclosed on your policy, you’ll need to update your policy as soon as they have their permit.

You can either call your company’s toll-free number or visit your agent’s office. You might be surprised when the representative asks for nothing more than your teen’s name and their birthday to list them.

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Will your 16-year-old affect your rates if they have a permit?

A permit isn’t quite a license. It grants a teen the permission to drive, but they must be under the supervision of other approved licensed drivers at all times.

Since it’s a restricted permit to drive, the insurer won’t raise your rates to cover your teen. It’s not as risky for insurers to cover teens who have their permits because they are always under adult supervision. If there is a charge, it will only be a small fee.

What happens after your teen is licensed?


Once your teen takes the state exam and passes the behind-the-wheel test they will be on a mission to take their first drive alone. Before you allow that, be sure you’ve updated your existing insurance.

It’s best to make the change as soon as you leave the DMV office.

To update your auto insurance, you’ll have to endorse your insurance policy by adding a new driver.

To add any licensed driver to your plan as someone who is covered to drive the vehicles on the policy, you’ll need to provide the following information:

  • Driver’s name
  • Date of birth
  • Driver’s license and state of issuance
  • Date the teen was first licensed

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List Your Teen as an Occasional Driver When Possible

There are two different types of driver classifications.

  1. Primary driver
  2. Occasional driver

The only time that someone could be an occasional driver is when there are more cars than drivers in the home. When a teen is an occasional driver, they don’t have as much of an effect on your vehicle’s rates.

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How much will a 16-year-old affect your rates?


There will be a staggering increase in your auto insurance rates when you add a teen to your policy. How much a teen will affect your premiums all depends upon the state you live in and what types of vehicles you own.

On average, a 16-year-old male will raise your rates an average of 92 percent.

Female drivers will lead to an average increase of 67 percent. If you also add an additional vehicle, the increase will be even higher.

How can you reduce premiums to cover a teen driver?

You don’t have to pay for a substantial increase in your rates if you take advantage of favorable ratings and other discounts. There are ways that you can reduce how likely it is for your teen to have an accident.

Here are some ways that you could reduce your increase:

  • Buy a safe vehicle that your teen will be rated on
  • Remove full coverage on the vehicle that your teen is rated on
  • Raise your deductibles on vehicles if you must keep full coverage
  • Restrict your teen’s mileage so that you can get a low-mileage discount
  • Require your teen to complete driver’s training for added discounts
  • Take advantage of Good Student discounts when your teen qualifies
  • Install an alarm in the vehicle that your teen will be driving
  • Buy another line of insurance through the insurer for a multi-line discount

What happens if you don’t add your teen?


It’s extremely risky to procrastinate when you’re adding a teen to your policy. Since teens have accidents at a higher rate than any other drivers in any other age group, it’s possible that your daughter or son could have an accident.

If they do and it’s discovered that you didn’t list them to your insurance, the company does have the rate to deny any first-party claims that you make for damage or medical expenses.

If you’ve contacted your insurer to add your teen and you’re not happy with the quoted increase, you should start shopping around for coverage elsewhere.

One way to do a thorough price comparison is to use our online quoting tool. Enter your information and your teen’s information into the fields and then you’ll be able to get several instant quotes to make your final decision.