Hello everyone! Welcome to episode two of the Risk Rewarded. During today’s episode, I will be going over how to prepare for when you’re having a teenage driver. There are also going to be certain aspects of the video that may or may not benefit having your teen watch themselves, as they should know the impact that they have on your policy or vehicles when they’re driving.
First off, the easiest way for them to help minimize costs before getting their actual license, if all possible, is to maintain a 3.0 GPA or better in school. That will significantly impact premium billing down the line, and will set them up for success in life. Not everybody can do so and that’s completely ok. But if it’s possible, it is a good incentive for your child to earn driving privileges.
And that tails to the topic of driving privileges, driving is not a right. A lot of kids may feel entitled to drive, or parents feel that they may fail if they don’t allow their kids to drive. We’re in the unfortunate reality that it’s very expensive for teenagers to drive. And it is not designed to be affordable for everyone. Many times, just on a liability-only vehicle, it’s $200 or more per month just to list your teenager as a driver.
The key thing that your kids should have in mind before they get licensed is understanding the financial impact that they have. If they have a job, they should save up a minimum of $3,000 before getting licensed. In my opinion, this helps them build the responsibility to succeed in life and prepare for the future when they get their own insurance after they turn 18. Usually, we don’t recommend kids get their own policy until they move out at whatever stage that is. Most of the time it is cheaper to be on your parent’s policy until you’re around 22.
A good way for parents to set their children up for success to make their premiums more reasonable for when they have to get their own policy is potentially opening a credit card in their name when they’re between 13 and 16. You don’t actually have to give them the card, it’s just to establish credit for them since credit plays a major impact on what your insurance rates are.
Another thing that virtually every kid should do before getting licensed or after getting a license is to take a driver’s ed program. Not only does this significantly impact the premium that you pay each month, but it also puts them in a situation where they are learning to drive from somebody who is an instructor rather than you. Not saying that parents are good or bad drivers, but somebody whose role it is to be an instructor typically could do a better job of instilling good driving habits for your teenage driver.
The new thing that’s come up recently, specifically in Missouri with new legislation, is that you can’t drive while using your phone. I know when I was growing up that was one of my worst habits. While driving, luckily I never had any accident because of it. But I realized now as I’ve gotten older that this was a huge risk and not worth it in general. It’s better to learn patience rather than always being in a hurry, saving 5 – 10 minutes, or feeling the need to respond to something right away. It’s just not worth it. When you enter the vehicle, only focus on one task: going from point A to point B. This will prevent harm to you or others, and no risk is, is worth a couple of minutes.
Now back to areas that parents need to be aware of. If your kid ever gets a speeding ticket, you will want to try to get it addressed. It’s a type of moving violation that adds points to the license. You will want to get in touch with an attorney and see if you can get the ticket expunged, as it will cost you significantly more if you allow that on their record and it can impact them permanently if they get more than one violation.
The other aspect of driving is understanding what mindset you’re in. Kids are at that stage of life where they need to be ready and resilient for day-to-day stresses, such as somebody driving recklessly or rageful driving. It is something that they haven’t experienced in life yet. So putting them in tougher situations in life where there’s higher pressure is a good idea in general before they get behind the wheel, as this will prevent them from making costly mistakes that could debilitate or even kill them. As that’s one of the top reasons of loss of life for younger people.
Inevitably many teenagers will get into a car accident. Typically it is not a major one, but a majority of teenage car accidents involve backing into somebody. The thing that they need to keep in mind is that that one incident can make it completely unaffordable for them to drive. So they need to have it instilled in their mind that they can’t make a mistake at this point, as it could cost $500 – $600 or more per month for them to continue to drive after that accident. So the biggest thing is preventing that from ever happening. Always double-check each mirror or backup camera, and stuff of that nature.
Speaking of backup cameras. What is a good first car for your teenage driver? It’s typically not a beater or something that is cheap. If at all affordable, I recommend getting a more reasonably priced midsize sedan. They will be cheaper for them to insure and have many of the safety features that will keep them safe and prevent them having minor accidents. Automatic braking, backup cameras, collision sensing, and stuff of that nature will take over and avoid many preventable incidents, and save probably more money than the vehicle would cost up front in the long run. It’s a long-term investment, but safety is always beneficial for any aspect involving our children. I realize that there will be some privacy concerns as there is a lot of data collected from telemetric devices, but it is still a worthwhile investment.
Another good idea, if your insurance company allows for it, is to consider Snapshot (if they offer it). This is a cell phone app or a plug-in device that basically monitors how many miles you drive, what times of day you drive, and how quickly you start or stop. The last time I checked, they would ding you for accelerating seven miles per hour in one second, which can include breaking or turning too quickly because that’s a form of acceleration. It will also monitor if you use your phone at all. I’ve had it on my device for over two years at this point, and I’m willing to pull up my results and show it to the camera shortly so you can have an aspect or idea of what it is. It’s a good way to save 10% – 20%. However, you have to pay attention to it and make sure that it’s not counting drives that are not you. As you can see, I’ve had 12,996 miles driven, 802 trips, and I have a 5/5 star rating
But I am also not as concerned about being tracked by things as I realized that every aspect of my life is monitored by some sort of company at this point. So I just dive into the expectation that companies want my data and will sell it. I’m accepting the decrease in my insurance premium by accepting that as well.
This is the end of the episode. Thanks for tuning in. I hope you guys got some good advice from it. If there’s anything else that you would like me to go into more detail on, feel free to comment. I may respond with an answer or a follow-up video in the future. If you could also subscribe and hit the bell, I will have more topics going forward.
For episode 3, I plan on going over what to do when you’re involved in specific home insurance claims and go over each aspect of that. Other than that, I hope everybody has a great rest of their day.