Mathew B. Sims is Editor-in-Chief and has authored, edited, and contributed to several books. He has been working in the insurance industry ensuring content is accurate for consumers who are searching for the best policies and rates. He has also been featured on sites like UpJourney.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that ex...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Nov 18, 2020

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Things to Remember...

  • Teen driver safety is something on every parent’s mind, and car insurance can ease some of that burden
  • If you have a teen driver, then you may want to consider using a non-owners auto insurance policy
  • This is a generic liability only policy that allows you to maintain auto insurance coverage without having a particular car attached
  • Your teenager must have some form of car insurance; otherwise, they will not be able to drive legally

So, your teen just got passed to go behind the wheel, and you’re wondering, “Do teens need auto insurance if they have a license but no car?” 

Yes, and this guide is here to answer all your questions about auto insurance laws for your newbie drivers.

Most sites these days have a search option so that you can do a quick search for the answers you need rather than having to search through the entire website on your own. Enter your ZIP code below to teen auto insurance rates.

How to Insure a 16-Year-Old

Some state auto insurance laws require that all licensed drivers carry auto insurance while others only require people with registered vehicles to carry auto insurance.

The table below, for example, shows the graduated license system in Colorado. 

RestrictionsLearner's PermitRestricted LicenseUnrestricted License
Age15 – if enrolled, attending, and participating in driver's ed
15 1/2 – if completed a four-hour driver-awareness course
16 – if none of above
If under 18, one year after obtaining learner's permit17 – if held restricted license 12 months
18 – otherwise
PassengersMust be supervised by a licensed parent/guardian or their licensed adult appointeeFirst six months – no passengers under 21
Second six months – limit of one passenger under 21
(exceptions: siblings, family emergencies)
No restrictions
HoursNo restrictionsFirst year – no driving between midnight and 5 a.m. (exceptions: presence of a parent/guardian, driving to and from school activities or work, family emergency, being an emancipated teen)No restrictions
Cell Phone UseForbiddenForbiddenForbidden if under 18
Pre-requisitesIf under 18, parent or guardian must sign an affidavit of liabilityCompletion of 50 hours supervised driving, 10 of which at nightIf under 18, holding a restricted license for one year
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The reason why 16-year-olds pay more for insurance — or, rather, cost more — is due to their lack of experience. The more history you have proving you are a safe driver, the lower your insurance costs. 

When exactly do minors need car insurance? If they’re going to be driving, you probably want them to be covered.

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Reasons to Buy Auto Insurance without a License

Non-owner’s coverage exists so that the insured driver can drive any vehicle, even those insured with a policy that doesn’t cover unlisted drivers.

If there is an emergency or your child is frequently borrowing vehicles, you know that if he causes an accident, then the liability is covered, at the very least.

If you aren’t sure if your state has these requirements, you can easily visit your DMV website.

Getting Auto Insurance with a Permit

If you’re under 18, you cannot hold your own policy. If you plan on driving, you do need insurance if you have a drivers license, but no car, and are planning on driving. Learn more about the teenager add policy 

Getting Auto Insurance for an Underage Driver

The best car insurance companies offer better rates to people with established insurance coverage. When your teen purchases a vehicle of his own, they may receive a reduced rate for maintaining their non-owners policy.

If your child had several car accidents while carrying a non-owners policy, they aren’t going to be receiving any discounts when it comes time to purchase a full insurance policy.

The downside to carrying a non-owners policy is that it can often be a lot more expensive than carrying a liability only policy on a specific car.

A non-owners policy has to cover you whether you are driving a Porsche or a beater. Find out what policies are available in your area

With the potential for your teen to drive virtually any kind of car, the insurance company has to consider whether or not they might be in a higher risk situation by driving an unsafe car, a muscle car, and so on.

The Downside of Non-Owners Auto Insurance

The other downside to non-owners auto insurance is that it is liability only insurance. If your teen has this coverage and causes an accident, the policy will only cover the damages that he is responsible for causing to the other vehicle, NOT to the vehicle that they are driving.

If the person who owns the car has insurance that won’t pay for the damages, you and your teen could be responsible for the repairs to the vehicle.

Do you need insurance if you have a license, but no car?

There is no simple yes or no answer to this particular question because it depends on your specific situation.

If you know that your teen is going to be driving other people’s vehicles, then the responsible thing to do is to purchase non-owners insurance.

If you decide to let your teen drive your vehicle and they have an accident, you could find yourself in a position where your insurance company refuses to pay.

The assumption will be that you let your teen drive often and that you chose not to add them to your policy or purchase them their own insurance.

What happens if insurance is required, but my teen doesn’t purchase any or allows the policy to default?

If you don’t have insurance in the first place, your teen will be unable to get their driver’s license at all.

If, however, you have insurance when your teen gets their license, but they allow their insurance to default, then the insurance company will inform the DMV.

What happens next is the same thing that would happen for any driver. The driver’s license is suspended until such time your teen can produce proof that they were carrying the required insurance.

According to the Rocky Mountain Insurance Association if a teen is caught, this will go on their driving record. They will receive a fine and, dependent upon where you live, your teen could end up in jail.

Save Money on Teen Auto Insurance 

If you’re sharing a car and on your parents policy, insurance for teen drivers may be lowered for standard rates. To lower your rates a little more, try showing your agent report cards. Good grades will sometimes lower insurance costs. 

Think you are ready to start looking for your provider? Enter your ZIP code below and get affordable teen auto insurance quotes.