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Kailey Hagen has been writing about small businesses and finance for almost 10 years, with her work appearing on USA Today, CNN Money, Fox Business, and MSN Money. She specializes in personal and business bank accounts and software for small to medium-size businesses. She lives on what's almost a farm in northern Wisconsin with her husband and three dogs.
It's something most people don't think about until they (or their teenage child) are preparing to get behind the wheel: Can you get car insurance with a permit? And do beginner drivers actually need it? The answer to both of these questions is yes, but different drivers might take different paths to get the coverage they need. Here's what drivers should know about getting auto insurance with a learner's permit.
Yes, drivers with a learner's permit can get car insurance, just like any driver with a regular driver's license. But they don't necessarily need to purchase their own policy, and doing so is often very expensive.
There aren't any rules about the types of insurance drivers with learner's permits can add. They can purchase the liability coverage required by state law. This pays for hospital bills and property damage if the policyholder causes an accident. Permit drivers can also add collision and comprehensive coverage for their own vehicle. Collision coverage pays to repair the policyholder's vehicle following a single-car accident or an at-fault accident. Comprehensive coverage pays for damages to the vehicle due to bad weather, animal-vehicle collisions, theft, and vandalism.
Depending on which insurer they choose, they may also have access to a number of optional protections, like gap coverage or pet injury coverage.
Nearly all states require their drivers to have at least some liability car insurance, and this applies to drivers with permits as well. It's generally best to purchase more than just the state minimum insurance when possible. Minimum coverage often isn't enough to pay for all the damages in a severe accident. Once the insurer has paid up to the policy limit, it's off the hook, leaving the policyholder to pay for any remaining damages on their own.
Permit drivers typically need to purchase their own car insurance in the following situations:
In these instances, parents or guardians can't add their permit driver to their policy. This leaves purchasing a separate insurance policy as the only option, and it's often the more expensive choice.
Permit drivers may not need to purchase their own auto insurance if a parent or guardian can add them to their existing policy. Though adding a teen driver to an insurance policy always raises rates significantly, this is usually the smarter way to go.
The permit driver can take advantage of any car insurance discounts the adults on the policy have earned to reduce their rates. For example, if the insurer gives the parent a multi-policy discount that reduces their premium a little, this could help the others on the policy score lower rates as well.
Getting car insurance with a learner's permit is the same as purchasing a policy with a valid driver's license. First, the permit driver needs to shop around and compare rates to see which company offers the best deal.
Most companies will enable drivers to get quotes and even purchase the policy online. However, if the driver is a minor, they may have to contact an insurance agent for assistance.
Once they're happy with the policy, the driver pays the first month's premium (or six months if they're paying in full) and the policy remains in effect as long as the driver keeps making the payments.
Those looking to add a permit driver to their existing insurance policy can do so by contacting their insurance agent. This can often be done the same day, and it must be done before the permit driver can safely get behind the wheel.
The policyholder will need to know some basic information about the permit driver, including:
Insuring a new driver can be tough on policyholders' wallets because they're more likely to get in accidents. Insurance companies recognize this, so they charge new drivers higher rates to account for these risks.
It's not realistic to expect to get a permit driver's rates down to those of a seasoned, accident-free adult driver's, but it is possible to reduce costs somewhat by taking the following steps:
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Drivers can purchase a vehicle with just a permit, but they won't be able to register the vehicle on their own. They must either wait until they've gotten their driver's license or have a licensed driver's name on the registration paperwork alongside their own.
All insurance companies weigh risk differently, which is why they give each driver a different rate. But generally speaking, permit drivers pay a lot more for car insurance. Their lack of experience makes them more likely to get into accidents, and insurers charge them more to account for this increased risk.
There aren't any restrictions as to what types of car insurance drivers can get with a learner's permit. Liability coverage is required by state law and many lenders require collision and comprehensive coverage if the driver has a lease or loan on the vehicle. Beyond that, options depend on the insurer the driver is working with. But increasing coverage also increases cost.
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