Key Points
- Adding a young driver to a car insurance policy is likely to increase the cost of its premiums.
- If a young driver is the main driver of a vehicle, they require their own car insurance policy.
- Always read a car insurance policy's product disclosure statement so you understand fully the coverage it offers.
Insurance companies regard young, inexperienced drivers at a greater risk of road accidents. And that risk typically results in higher insurance premiums. So if you've got a young driver in the family, should you grab them their own policy, or add them to yours? Canstar looks at your options, as well as the best car insurance for families with young drivers.
Car insurance for young drivers: what are the options?
There are three main options when considering car insurance for young drivers:
- Adding your child to your car insurance policy
- Purchasing the young driver their own car insurance policy
- Not including them on your insurance because your insurance provides appropriate cover
Adding your child to your car insurance policy
This could be the best option if your child doesn't own their own vehicle, is not on a full licence or doesn't drive very often.
For this option, you add your child as a young driver on your car insurance policy or policies. This means they're covered when they drive your car(s). Although, as a consequence, your premiums are likely to rise.
Purchasing the young driver their own car insurance policy
If your child is the main driver of a vehicle, even if the car is registered in your name, they will require their own insurance policy.
The main person driving a vehicle must be listed as the main driver on the car's insurance policy. Doing otherwise – for example, listing yourself as the main driver to secure lower premiums – is regarded as insurance fraud.
You can find the best car insurance for learners and young drivers here.
Not including them on your insurance
Car insurance often provides cover for occasional drivers not listed on the policy, as long as they meet the terms of the policy.
However, most comprehensive car insurance policies contain caveats that exclude drivers under the age of 25, so it's important to read your insurance provider's product disclosure statement so you fully understand the terms of your policy.
If your child meets the terms of your insurance policy (as confirmed by your insurer) and isn't going to use your car often, it could be okay to not add them to your policy.
For example, some comprehensive insurance plans include cover for learner drivers. This is designed to allow parents to teach their children to drive without worry. Although such policies often come with added excesses, which you might have to pay in the event of an accident.
These extra excesses can include:
- Learner driver excess: added excess for a claim made as the result of a learner driver.
- Young driver excess: added excess if a driver is under 25.
- Inexperienced driver excess: usually applies to learner drivers over the age of 25.
- Undeclared driver excess: if you didn’t list a learner driver on your policy, your premiums were likely unaffected. But you may have to pay extra excess as a result
Best Car Insurance for Families with young drivers
If you intend to add your child to your car insurance policy, it pays to shop around for the best deal, which is where Canstar can help. Each year we release our Car Insurance Awards, which include detailed Star Ratings of the best car insurance policies and providers across a range of driver profiles.
Below are the insurance companies that our expert research panel judged as providing Outstanding Value Comprehensive Cover Insurance for Families with Young Drivers. And also those that offer the best individual policies for young female and male drivers.
Outstanding Value Cover for Families with Young Drivers
- AMI
- FMG
- Westpac
