Insuring Your Teen Driver: What You Need to Know

Every new semester or school year means another class of student drivers will be hitting the road. Adding a teen driver can push your insurance rates through the roof. But there are good reasons why you should do it anyway. Otherwise your teenager and your family could be faced with thousands, or even millions of dollars in unpaid medical expenses after an auto accident.

Teen Drivers Need Auto Insurance Too

When your teen driver takes his or her first drivers training class, it comes with added responsibility, for you and your teen. As you son or daughter learns the rules of the road, it is up to you to make sure your family is covered in case of an accident.

Driving, especially on the busy freeways and highways of Metro Detroit, takes practice. Teen drivers don't always have the experience to respond to things that come up on the road. Over 2,000 teen drivers were killed in motor vehicle accidents in 2016. Students may face crashes because of speeding, distracted driving, or the recklessness of other drivers on the road. What happens after a crash depends on whether the teen driver was insured.

Mandatory Insurance Applies to Teen Drivers

Before children start driving on their own, they are generally covered by the insurance of a relative in their home, usually their parent's policy. Teenagers are still entitled to the same coverage when riding as passengers or injured as pedestrians or cyclists. But when he or she gets behind the wheel, your teenager is held to the same standard as every other driver on the road. That means student drivers need insurance. 

Michigan law requires every person who owns a vehicle that is operated on the roads to carry no-fault auto insurance. That includes a teen driver. When teenagers get a car for their 16th birthday, they also get the obligation to be sure the vehicle is insured.

Constructive Ownership by Frequent Drivers

But you can't avoid insuring your teen driver just by keeping the vehicle in your own name.The law requiring insurance isn't solely about whose name is on the title. If your teen driver is a frequent user of the family car, he or she could develop "constructive ownership" under Michigan law. Frequent drivers share the same responsibility to insure a vehicle as the person whose name is on the title.

Uninsured Motorists Loose No-Fault Benefits

Michigan No-Fault law provides coverage of medical expenses, along with up to 3 years of lost wages and replacement services for people injured in motor vehicle accidents. But Michigan drivers have to live up to their end of the bargain by maintaining mandatory health insurance coverage. Uninsured motorists -- including undisclosed teen drivers -- are not allowed to file claims for no-fault benefits, or sue at-fault drivers for causing their injuries. By trying to avoid paying insurance premiums on your teen driver, you and your family could end up paying for all the expenses related to any crash.

Insurance Options for Teen Drivers

For many families, the least expensive way to insure your teen driver is to add him or her as a "named driver" or "named insured" with your auto insurance provider. This will increase your family's insurance premiums, but it will also make sure your teen driver is covered in case of a crash. This option allows you to take advantage of whatever discounts your family has accumulated for having multiple vehicles, policies, or covered drivers.

Some teen drivers may also qualify for discounts themselves, especially if they are good students. Insurance providers set premiums based on risk. Good students, safe drivers, or students living at college without a vehicle, can sometimes qualify for reduced premiums if the insurance provider determines they are statistically less likely to be in a crash.

In some cases it will be cheaper or necessary for a teen driver to have his or her own policy. If your teenager drives a very low-value vehicle, or has changed his or her permanent residence, a separate policy may be the better option.

Whether you add your high school students to the family auto insurance policy, or help them start one of their own, it is important to make sure they are covered before they get behind the wheel. Then if an auto accident happens, the experienced personal injury attorneys at Sachs Waldman can help you get no-fault benefits to cover your teen's injuries. If you or your child have been seriously injured in a motor vehicle accident, contact our Detroit personal injury law office at 1-800-638-6722.