Driving may be a rite of passage for teenagers, but for parents, having a teenage driver can be stressful and expensive. Your child will need auto insurance coverage as soon as they receive their driver’s license. Here are some important considerations.
Determine Whether to Add Your Child to Your Policy or Purchase a Separate Policy
- Check with your insurer to see how your premiums may be affected. Expect that they could rise dramatically; however, savings may be found through multi-vehicle and good student discounts.
- If your child is driving an “old beater” that doesn’t require comprehensive or collision coverage, a separate policy, in limited instances, may save you money.
- Discuss your options with your insurance agent.
Consider Your Teen Driver’s Coverage Choices
- Most personal auto policies won’t cover a driver transporting goods or services in exchange for a wage. So, if your teen is planning on becoming a pizza delivery driver, for example, contact your insurance agent to determine if additional coverage is needed.
Find Ways to Save Money
- Consider vehicles with high safety ratings over sportier, more-expensive cars.
- Think about raising your policy’s deductibles.
- Reassess your need for collision or comprehensive coverage.
- Ask about “occasional” or “pleasure only” discounts, which may apply to children away at school.
- Explore usage-based insurance, which involves installing a device in the vehicle that monitors driving behavior and rewards good driving. It’s also a way to keep tabs on your teen’s driving.
- Have your teen complete a driver’s education course.
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2022 FMG Suite.
- Infographic: How to Talk to Millennials About Life Insurance
- Consider Keeping Your Life Insurance When You Retire
- The Importance of Beneficiary Designations
- Financial Hacks for Millennials: The Great Wealth Transfer
- Building a Solid Financial Foundation
- Diversification, Patience, and Consistency
- Choosing a Business Structure
- Mental Health for the Next Gen: 4 Tips to Support Teens
- Preparing for the Expected
- Money Matters: Why it Pays to be Financially Responsible