Michigan's Auto Insurance Law Has Changed

Consumer Counselor

Insurance Information for Michigan Consumers

[FIS-PUB 0231] Michigan Department of Insurance and Financial Services | 877-999-6442 | www.Michigan.gov/DIFS [11/19]

Insuring Your Teenage Driver

Insuring a teenage driver is often an additional cost for

many Michigan parents. Statistics show that drivers

under the age of 25 are involved in more car

accidents, and as a result, many insurance companies

consider them a greater risk which can increase a

family’s auto insurance premium.

Adding Your Teenage Driver to Your Policy

It is important to notify your agent when your teenager

becomes a licensed driver so they can be added and

rated on your policy. Failure to notify your insurer

could result in your insurance company retroactively

rating your policy for the additional driver, causing a

large amount of premium being owed on your next

premium billing notice. Your insurer could also deny a

claim or cancel your policy if you fail to notify them

about all licensed drivers in the household, including

teenage drivers.

Some insurance companies require that they be

notified once a driver receives a learner’s permit, while

others require notification when a driver receives their

license. It is important to check with your insurance

agent to find out your company’s requirements.

Shopping Around

Adding any driver, especially a teenage driver, to your

auto insurance policy will increase your premium.

Rates insurance companies charge can vary

dramatically so it pays to shop around when adding a

teen driver to your policy. By shopping around, you

can determine the best insurer to provide coverage

based on the company’s underwriting and rating rules.

You can also work with your agent to determine the

best way to insure your teen driver. For example, if

there is one vehicle on the policy and a newer,

expensive luxury car, adding a teen driver may

considerably raise your premiums.

In a multi-vehicle policy, many insurance companies

rate a teen driver on the most expensive vehicle in the

household while others may determine your rate

based on the vehicle your teenager will drive. Having

your teen drive a modestly priced economy car may

significantly lessen any increase to your premium.

Discounts

Making sure you have all the discounts offered by

your insurance company is a great way to lower your

premium following the addition of a teenage driver.

For example, if your teen is an honor roll student or

has a job, some companies may offer a reduced

premium. Other discounts that may be available to

reduce your rates include:

• Safe driver discount

• Low mileage driver

• Two or more cars on a policy

• Airbags or other safety equipment

• Anti-theft devices

• Auto/home insurance on same policy or with

same company

Consider Revising Coverage or Deductibles

You may also consider revising your coverage

amounts and deductibles to lower your premium. For

example, you may be able to lower your premium by

increasing the deductibles on collision and

comprehensive coverage or by removing physical

damage coverage on an older vehicle.

Before making any changes you should determine

what coverage requirements a lienholder may have

and whether you could afford to absorb a larger

portion of your loss in the event of an accident.

About DIFS

The mission of the Michigan Department of Insurance

and Financial Services is to ensure access to safe and

secure insurance and financial services fundamental

for the opportunity, security and success of Michigan

residents, while fostering economic growth and

sustainability in both industries. In addition, the

Department provides consumer protection, outreach,

and financial literacy and education services to

Michigan citizens. For more information please

contact DIFS at 877-999-6442 or visit