Adding a teenage driver to your Oklahoma auto insurance? Weren’t you were just helping them learn long division? Didn’t you just teach them to ride their bicycle? Time flies…
Your baby is getting a driver’s license! It’s very exciting for them. They have a whole world to explore…in the car.
As a parent, I’ve experienced this phase of my kid’s life. Like most “phases” of raising our kids, this one comes with added expenses.
Parents make the same mistakes over and over when it comes to insurance and cars for their kids. Adding a teen driver to your auto insurance requires some pre-planning.
If I could explain just a few things on this topic to parents, this is where I would start.
What’s the best car to get for your new teen driver?
The best car for your new teen driver is…wait for it…one they can wreck. The first 3-5 years should be considered “practice”. Don’t buy a new car for a new driver. Buy something cheap. Parents want their kids to be safe. I completely agree! So when I say “cheap” I don’t mean “dangerous”. What I mean is..buy them a used car, not a new one.
Do you have to add them to your insurance plan?
Yes. As soon as they are licensed you must add them to your insurance policy. What if you don’t? At worst, it’s possible your insurance policy could limit coverage in the event of accident for anyone not listed on the policy as a driver. At best, when you teen has a wreck or gets a traffic ticket, the insurance cost will be significantly more than if they had been added in the first place.
What’s this going to do to your insurance premium?
You can expect your auto insurance premium to increase dramatically, regardless who the insurance company is.
The increased cost can vary depending on some factors that I will point out later, but expect an increase of something like 40%, at least. According to one study the nationwide average cost increase is over 80%. Young men will have a higher price than young women.
I know, I know, that sounds pretty steep, but let me explain why insurance companies will charge more if your 16 year old is going to be driving your cars.
Insurance companies understand the statistics of risk.
An inexperienced, teenage driver has a greater likelihood to be the cause of an accident than any other type of driver. According to the Insurance Institute for Highway Safety, in 2013 young people ages 15 – 19 represented only 7% of the US population. However, they accounted for over 11% of the total costs of motor vehicle injuries.
Here is an unfortunate, but sobering statistic: the Center for Disease Control (CDC) shows in 2014 that an average of six teenagers between the age of 16 – 19 died every day from motor vehicle injuries. Sadly, that statistic is not improving.
Insurance companies use an idea called: the “law of large numbers”. This basically says the past behavior of a large group of similar individuals can be used to predict the future behavior of any individual in that group. So, as a group, teen drivers are more likely to wreck a car than non-teen drivers. Your teen driver may be special. They may be the exception to this rule, but there are no exceptions to the rule as far as insurance is concerned.
I was not involved in any accidents as a teenage driver. But my parents still paid higher premiums because of my teenage driver “profile”. Insurance is like life, it isn’t fair. It’s about statistical averages.
Okay, all that sounds a little gloomy. Let me give you some good news.
Here are some ideas that can help you keep your insurance cost down as much as possible.
- Be proactive in your child’s driver education. Driver education is mandatory to get a driver’s license, but as a parent, you set the example. Take them to a large empty parking lot and let them practice. I found that to be a lot of fun with my kids. Your kids might not think you’re “cool”, but they like to learn from you.
- Demand good grades for the keys to the car. Having a “B” average will qualify them for a “good student discount” that is usually a minimum of 10% savings. Parents need “leverage” on their kids. This is a win-win.
- If you do buy a car for them to drive, don’t get them a car valued over $5,000. Why? Remember the statistics? Any young driver is very likely to be involved in an accident within the first few years of their driving career. Further, they are likely to be the one at fault in that accident. So, buying an inexpensive car means you will not have to carry the “comp and collision” coverages on it, which will further reduce the cost of your insurance. (Don’t know what “comp and collision coverage” is? – Click Here To Find Out)
- Finally, a lesson we all need to review and practice is removing the distraction of our cell phones. Just like putting on a seat belt before starting the car, we should put our phone out of reach to limit the impulse to send and reply to whatever text or social media app is chiming for our attention. Consider a teenage driver contract like this one from the Centers for Disease Control. The cost of car insurance is only money. The consequence of distracted driving can be fatal.
Most insurance companies are now offering discounts if their clients use cell phone apps or devices that are attached to your car to track the driving habits and cell phone usage of the drivers. Safer drivers will pay a lower insurance cost than those with poor driving habits.
This may sound a little dramatic or an invasion of privacy, but it should reveal the level of concern insurance companies have about distracted driving. Insurance companies are in business to make money. That should go without saying. If the insurance company can get people to improve their driving habits, there should be fewer claims.
Everybody wins, right?
Make a plan and a budget.
Insurance is a large part of the budget for most people. Adding a teenage driver to your Oklahoma auto insurance and buying a car for them to drive can be expenses which can be an expensive surprise if you don’t plan ahead.
As your insurance agent, I can help you plan ahead to make sure your family is protected with a great insurance policy. But, I can also help you reduce your expense by giving you great “free” advice that will allow you to keep your money in your pocket for more important future expenses, like college, marriage, grandkids…
Okay. I’ll shut up! One step at a time. Let’s not let them grow up that fast!
I would welcome the chance to have a conversation about your insurance plan. One that focuses on a plan that fits your family, regardless of what insurance company you choose to by from.
Sound good? The call us at 405-340-0606.
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