Insurance & Vehicles

When your teen is ready to hit the road alone, make sure your auto insurance policy is ready, too. Most families do this by adding their teen to the family policy. You also might want to do some comparison shopping to see if you could improve savings, coverage or service for your insured property.

Three Things to Consider at this Stage

  • Finances: Can you and your teen afford the cost of auto insurance, gas and maintenance? Who will pay for the car? Have you found a safe car that fits your family budget?
  • Readiness: Has your teen demonstrated safe, responsible driving behavior and driven alone for at least six months without a crash or ticket? Before handing over the keys, make sure you are using a parent-teen driving agreement and are satisfied that your teen has been driving successfully without you.
  • Involvement: Is your teen ready to own, operate and maintain a car? Involving your teen in the purchase process can be a great learning experience regarding costs and responsibilities of car ownership.

Car Insurance Requirements in Minnesota

All Minnesota drivers are required to have auto liability insurance at these minimum levels:

  • $40,000 per person per crash for Personal Injury Protection.
  • Auto liability insurance of $30,000 for injuries to one person, $60,000 for injuries to two or more people, and $10,000 for physical damage to the other driver’s vehicle or for damage to property (30/60/10).
  • Uninsured motorist coverage of $25,000 for injuries to one person, and $50,000 for injuries to two or more people.
  • Underinsured motorist coverage of $25,000 for injuries to one person, and $50,000 for injuries to two or more people.

Auto insurance companies in Minnesota determine rates based on factors such as your driving record, how long you’ve been a licensed driver, how much you drive, where you live and what you drive.

Saving Money on Car Insurance

Because risk of a crash is significantly higher for young drivers, particularly during the first year of driving, your teen’s auto insurance rate likely will be higher than your own. Here are a few strategies to help reduce teen driver auto insurance costs.

Saving money on car insurance
Good report card = lower costs. Many insurers offer discounts for students with a "B" or higher grade average and for teens who complete driver's education or defensive driving courses.
Share vehicles. How you classify your new driver - the main or an occasional driver of one vehicle, for example, will affect insurance premiums, so consider sharing vehicles.
Car choice can save money. The kind of car your teen drivers can impact safety, as well as insurance costs. Many experts agree that mid-sized sedans are the best choice for teens. Small cars don't offer as much protection in crashes, sporty cars may encourage speeding or recklessness, and SUVs and pick-up trucks are more difficult to maneuver and more likely to roll over. Check with your insurance agent about rates before you buy a car.
Consider raising your deductible. Ask your insurance agent how much you could ave by increasing your deductible on one or all of your vehicles. If you file a claim after raising your deductible, you'll pay a larger share of the costs, but the savings might be worth it.
Keep practicing together. Continue to drive with your teen under new and challenging conditions so there won't be surprises (and potential crashes) when you're not in the passenger seat to help out.
Be involved. Research shows that teens with more involved parents get fewer tickets and engage in less risky driving. Avoiding tickets and crashes will help keep your insurance rates down. A parent-teen driving agreement can help you set rules.

Learn more about insurance available through AAA for teen drivers and their families.