What are the rules for placing teenagers on a parent's auto insurance policy?

The rules for when to add a teen driver to an auto insurance policy vary by state and insurance company. To be safe, you should call your insurance agent or insurer as soon as your child starts to drive.

In some states car insurance companies can require you to list a teen with a driving permit on your insurance policy. Generally, most insurers don't charge you for teens with learner permits, and insurance coverage is extended to the teen learning to drive it.

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Your insurance company will start charging you for the additional driver once your teen has a driver's license. Make absolutely sure you inform the insurer about a licensed teen driver. Not adding the licensed teen could be considered misrepresentation, which could jeopardize coverage should he or she get in an accident while driving the family car.

In some cases the insurer might set a date for when to add the teen driver, such as a 16th birthday or the date the learner's permit expires. Let your insurance company know if the teen is still unlicensed at that point, so you don't get charged a higher premium prematurely.

Ask your insurance agent about discounts to save money. Most insurance companies provide a good-student discount for high school and college students who earn a B average or above. Some insurers also offer discounts if you install electronic devices on the car to monitor your child's driving.

It's usually less expensive to add children to your policy than for teens to purchase their own insurance, according to the Insurance Information Institute. However, teens who buy their own cars must have their own insurance policies.

For more, see when to add your teen to your car insurance policy.