Getting a driver's license is a major milestone for teenagers–and a nerve-wracking one for parents. Between safety concerns, rising insurance premiums, and confusing policy rules, adding a teen to your auto insurance can feel very overwhelming. If you're preparing to insure your new driver, here's what you need to know about car insurance for teen drivers in Michigan in order to keep both your wallet and your teen protected.
New Drivers on the Road in Michigan
Each year in Michigan, over 90,000 teenagers begin the process of becoming licensed drivers. This marks an important rite of passage for those teens and introduces a new wave of inexperienced motorists to our roads. With nearly half a million drivers aged 15–20 behind the wheel, young motorists make up a significant portion of Michigan’s driving population. This means that thorough education, training, and proper insurance coverage are very important for everyone.
In Michigan, teens must complete the Graduated Driver Licensing (GDL) system, a multi-stage process designed to help young drivers gain experience under low-risk conditions. It begins with Segment 1 of driver education, which includes classroom instruction, driving hours, and a written exam. After successfully completing Segment 1, teens are eligible for a Level 1 Learner’s License, allowing them to drive with a licensed adult.
After logging at least 50 hours of supervised driving and completing Segment 2 (an additional instructional course), they can take a driving skills test and apply for a Level 2 Intermediate License, which comes with limited restrictions. Full, unrestricted driving privileges come with a Level 3 License which is granted once they turn 17 and if they maintain a clean driving record.
Only once a teen has at least a Level 1 Learner’s License can they be officially added to a parent or guardian’s auto insurance policy. For families, this is the moment when it’s time to shop coverage, explore discounts, and make sure their auto insurance policy reflects the added risk of a young, inexperienced driver.
Why Auto Insurance for Teen Drivers Is So Expensive
It’s no secret that insuring a teen driver costs more—often significantly more—than adding an adult to the policy. That’s because young drivers are statistically more likely to be involved in accidents, especially in the first few years behind the wheel. In Michigan, where auto insurance rates are already among the highest in the nation, this added risk comes with a hefty price tag.
Insurance companies consider factors like:
Age and gender of the teen
Type of vehicle they’ll drive
Driving record (once they’ve had time to build one)
Whether they’re a full-time student
Where they’ll be driving (urban areas may cost more)
The good news is there are ways to offset the cost.
Michigan's No-Fault System and Teen Drivers
Michigan operates under a no-fault auto insurance system, which means your insurance pays for your injuries and damages regardless of who caused the accident. This system affects how you choose Personal Injury Protection (PIP) coverage, which is especially important for new drivers who may be more likely to get hurt.
Make sure your policy has the right level of PIP and liability coverage. Skimping here could leave you financially vulnerable if your teen causes an accident with serious injuries and/or property damage.
Should You Add a Teen to Your Policy or Get Them Their Own?
In almost all cases, it’s cheaper and more practical to add your teen to your existing auto insurance policy rather than buying a separate policy. Not only is it more cost-effective, but it also makes it easier to manage coverage, discounts, and claims.
If your teen owns a vehicle in their own name or lives outside your home full-time (for example, at college), there may be reasons to explore a separate policy, but talk to your insurance agent first to weigh the pros and cons.
Discounts to Ask About for Teen Drivers
Many insurers offer discounts that can take the edge off the cost of insuring a teen, such as:
Good Student Discount: For maintaining a B average or better
Driver Training Discount: For completing an approved defensive driving course
Distant Student Discount: If your teen goes to school more than 100 miles from home and doesn’t have regular access to a car
Safe Driver or Telematics Discount: For enrolling in usage-based insurance programs that track driving behavior
Ask your agent what discounts are available and encourage your teen to earn them.
Choosing the Right Car for Your Teen
If you’re shopping for a vehicle your teen will drive, keep insurance costs in mind. Avoid high-performance sports cars or luxury vehicles, which are more expensive to insure. Instead, look for cars with:
High safety ratings
Good crash-test performance
Anti-theft and driver assistance features
Moderate repair and replacement costs
A reliable used sedan with modern safety tech can save you thousands in premiums over time.
Set Your Driving Expectations Early
Insurance is only one part of the equation. Setting clear rules and boundaries with your teen—like no phones while driving, no late-night cruising, and no extra passengers—can reduce their risk and help keep your premiums in check.
Some parents also choose to have their teen contribute to the cost of insurance, either by working part-time or covering any deductible from an at-fault accident. This is a great way for teens to build responsibility while reinforcing the real-world value of safe driving.
Consider Adding an Umbrella Policy
For families with a new teen driver, it’s also worth considering an umbrella insurance policy as an added layer of protection. Teen drivers are statistically more likely to be involved in accidents, which increases the risk of a serious liability claim, especially if injuries or property damage are involved. An umbrella policy kicks in after the limits of your auto insurance are exhausted, providing extra liability coverage, typically in increments of $1 million. This can be crucial in protecting your family's assets, savings, and future income if a lawsuit arises from a major accident involving your teen. For many households, an umbrella policy offers peace of mind at a relatively low cost, especially when combined with your auto and home coverage.
Insuring a teen driver is a big milestone for any Michigan family, but it doesn’t have to break the bank. With the right insurance strategy, you can protect your new driver while keeping costs manageable.
If you have questions about adding your teen to your policy or finding the best car insurance rate for teen drivers in Michigan, contact our Navisure team for a free quote and coverage review. We’ll help you compare options and choose the best balance of price and protection so this new-driver process becomes less stressful and more manageable for your family.
COREY VANDERMEER | PRESIDENT
Corey started his insurance career in the claims department for a national carrier and learned the basics of insurance coverage and how it’s applied. From there he decided to take the jump into sales and joined an independent insurance agency. Here he learned how to build coverage around the needs of each individual and cater to every client. When Corey decided to start an insurance agency he did so with the intention of simplifying the process of getting insured. With a focus on technology and simplicity; his goal was to create an insurance agency that was different from those currently dominating the market place.
When he’s not working, Corey enjoys golfing, fly fishing and spending time with his wife and kids. Together they enjoy traveling to Northern Michigan and to his wife’s hometown of San Francisco.