6 Mistakes Parents of Teen Drivers Make
The day your child gets their driver's license is a big day for your teen and a nerve-wracking one for you. It's natural to worry about the safety of your kid on the open road. And picturing your young driver merging into busy highway traffic might cause you plenty of sleepless nights.
Adding a teen driver to your auto insurance policy will also bring a hit to your finances. A study by InsuranceQuotes.com released in the summer of 2016 found that the average family adding a teen driver will see yearly insurance premiums rise by an average of 79 percent.
Here are six mistakes to avoid if you don't want your insurance premiums to skyrocket the day they get that long-awaited license.
1. Not adding your teen driver to your policy
You might think there's no need to do it right away, as they're only allowed to drive to school and back, or to other local spots that aren't far from home. But your teen doesn't need an hour commute each day to require the financial protection of an insurance policy. According to an accident survey conducted in 2012 by the NHSTA, 52 percent of car accidents occur within a five-mile radius of home. You never know what can happen once your kid heads out on the road. Make sure they are covered before you hand them the car keys.
2. Letting them drive too soon
Just because teens can start driving at 16, doesn't mean that your child needs to be behind the wheel at such a young age.
Maybe your teen isn't ready to start driving at 16. Maybe it makes sense to wait an additional year or two before they start taking driver's education courses.
Having your teen wait can actually make financial sense. The InsuranceQuotes.com study found that teen drivers have a lower average hit on your auto insurance premiums the older they are. Waiting until your teen is 17, for instance, could reduce your policy's rate increase.
3. Buying them a new car
It's exciting to hand the keys of a shiny new car to your new driver. You might also justify it by thinking it's safer (newest technology and all). But an expensive new car is also more expensive to insure. Does your teen really need the thrill of driving an impressive car, or can that feeling be saved up for the time when they work hard to pay for one themselves?
4. Forgetting about the good-grade discount
Teen drivers will receive a discount on their insurance rates if they are considered good students. The theory is that better students tend to make for safer drivers. Typically, teens with B averages can expect some sort of good student discount.
If your child does get good grades, don't forget to report them to your auto insurer. The discount for good grades is a solid one, and usually ranges from 5 percent to 15 percent off.
5. Failing to enforce the rules
Teen drivers generally face greater restrictions than other drivers. These restrictions vary by state, but your teen might not be allowed to drive past a certain hour in the evening and might be restricted to a certain number — and age limit — of passengers.
It's important for parents to enforce these rules. If teen drivers are caught violating their driving curfew or with a car full of teen friends, they will get a citation. And that citation will boost your already higher insurance premium.
6. Not checking pay-as-you-go programs
Many auto insurers now offer pay-as-you-go insurance programs. Under these programs, you insert a small electronic device into your car's onboard diagnostics system. The device then tracks how many miles you drive and how long you drive. Some insurers also track the speeds at which you drive and how often you slam on your brakes while driving.
If your statistics show that you don't drive too many miles, you might be eligible for a low-mileage discount. You might also qualify for additional discounts if your insurer determines that you generally drive at safe speeds.
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