Teen Driving: 5 Ways to Help Your Kids Understand Car Insurance

When you’re teaching your kids how to drive, you’re doing much more than showing them the how-to’s and handing them the keys: you’re opening a new world of responsibility for them. Car insurance is one of those things that you may take for granted in terms of knowing how it works, but you can’t take anything for granted when it comes to the safety of your kids.


You may want to use the word “consequences” sparingly. Depending on your parenting style, your teenager may associate this word with an empty threat, or something minor. But your teenager needs to understand how costly accidents can be. If you’ve ever had an accident, show them in black and white how much the repairs cost. Express it as a percentage of all the household income for the month, or how many hours you need to work to make that money. This should effectively demonstrate the need for a solution other than paying for everything out of pocket.

Not a “Product”

Your teen needs to understand that, contrary to some popular ads, insurance policies aren’t a product that’s manufactured somewhere, shipped, then bought in a store. It’s more like a club. They also need to understand that it can be a very expensive club that they pay to be a part of every so often. They need to understand that if they are in an accident whether it is their fault or not, the insurance premium could go up in price. They also need to consider the kind of vehicle and the age of the vehicle as newer, sporty, or luxurious cars will cost more in insurance premiums. They also need to understand that their gender and age also play a role in terms of pricing of being in the insurance “club.” Teach them how to research each insurance company and how to find insurance quotes. This will help them determine which insurance company will be right for them.

The Club Analogy

In buying into the policy, you’re buying into the club. In this club, everyone agrees to regularly put money into a big pot. These payments are called the premium. If something happens to anyone in the club while driving, everyone agrees to use the money in the pot to help them cover the expenses.


Make sure they understand, however, that insurance isn’t cure-all magic. Even with an insurance policy, there is always a deductible. Explain that insurance doesn’t cover everything: it just makes the costs bearable if something should happen. For example, if repairs from an accident cost $10,000, then the company will pay those costs minus the deductible. If your deductible is $5,000, then you and the insurance company are splitting it down the middle in this case (Source: Meyer’s Insurance Ltd).

No Magic

No matter how good the policy is, it can’t make you safe. No amount of insurance can undo the trauma of an injury or bring back a human life. While your teen should feel safe enough to not be driving to school with white knuckles, they also don’t need any help feeling invincible. Outlining the realities of insurance, what it really covers and what it doesn’t, can help your teen enjoy their new found freedom safely.

Carsurfer Admin

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