It’s a headline sure to cause a family revolt – if you have a teenager at or approaching driving age, that is. What parent would go so far as to delay their teen’s getting a driver’s license and driving? According to results from a just-released Nationwide Insurance survey of its policyholders, apparently one in seven families is doing just that.
Nationwide is the fourth-largest insurance company in the United States, with about four million policyholders. The survey, conducted online by Harris Interactive, found that of all the parental concerns associated with the costs of teen driving, auto insurance is right at the top of the list (second only to distracted driving) – with 65 percent of parents noting this as their top concern.
Parents’ second biggest concern associated with the costs of teen driving, at 55 percent, is increasing insurance costs if their teen gets into an accident. Third-ranking is the price of gasoline, with 54 percent of parents noting this concern.
Nationwide says that 70 percent of the parents of teen drivers insure their child on the family’s auto policy and experience a yearly average increase of about $800.
Larry Thursby, the insurer’s vice president of auto product and pricing, said in a statement, “Our survey found that households with teen drivers shell out an average of nearly $3,100 each year to allow their teens to drive.” Thursby further noted, “While other factors are involved, the cost of having a teen driver is a major one.”
How parents are coping
How are parents tackling the rising costs associated with allowing their teen to drive? On average, parents pay nearly two-thirds or more of all the costs related to their teen’s driving. This includes everything from the teen’s car insurance to gasoline.
Nationwide says its poll found that parents are making financial cutbacks just to allow or keep their teen driving. The survey found that 40 percent of parents are cutting back on entertainment expenses, 38 percent on eating out, and 35 percent on vacations.
In order to help pay for the costs during the current economic downturn, one-third of parents surveyed say their teen has been forced to get a job. Some 21 percent say their teen will have to make do driving the family car – instead of getting their own, or that they’re now not planning to buy their teen a car (15 percent).
What parents can do
Common wisdom about getting the best car insurance rates applies just as well here. Talk with your insurance agent to find out how you can maximize your savings by taking advantage of all available discounts. You may wish to bundle homeowners, life and auto insurance. See if your teen qualifies for good student discount.
Do you qualify for discounts based on length of coverage with the insurer, certain safety devices installed on the car, accident-free for the past 3 to 5 years, membership in certain organizations? There are many different kinds of discounts offered by various automobile insurance companies. The best advice is to have a talk with your agent and discuss ways that you can keep auto insurance costs down and still have your teen covered to drive.
Studying up on insurance costs also gives you the great opportunity to talk with your teen about the privilege and responsibilities of safe driving – whether it’s the family Ford Taurus or Toyota Prius, or a used Civic purchased just for them.