7 Bulletproof Steps
How to Prepare for Teen Drivers
This is the most comprehensive guide for parents with teen drivers in Florida.
I’m going to share with you the pros and cons of scenarios like buying a separate insurance policy for your teen versus adding them to your existing family policy.
In short: if you want to set your child up for success on the road and protect your family’s assets, you’ll love this guide.
Let’s get started.
Here is a Quick Summary About How to Prepare for Teen Drivers in Florida:
- Be Aware of Teen Driving Statistics & Potential Risks
- Adding Your Child to Your Family’s Existing Insurance Policy VS their Own
- What Car to Buy & How
- Putting the Car in Your Name VS Your Child’s
- Invest in Teaching Your Child How to Drive
- Establish Household Rules
- Enforce Safe Driving Habits
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Be Aware of Teen Driving Statistics & Potential Risks
Did you know there are over 800,000 teenage drivers on the Florida roads today?
This is according to the Florida Department of Motor Vehicles.
And the statistics from the Florida Department of Highway Safety and Motor Vehicles tell us that car crashes are up by 57% in some Florida counties.
Traffic deaths have increased by 28% since 2012.
The increase in car crashes and motor vehicle deaths are attributed to distracted driving.
These are scary statistics.
Especially for a parent of a teenager who is about to get their driver’s license.
Teenage drivers, unfortunately, are the least experienced and most distracted drivers on our roads.
Distracted Driving is Extremely Dangerous!
Texting is deadly dangerous.
Distractions, such as Snapchat, Instagram, Facebook, and GPS systems are all dangerous.
And it is not just cell phones.
Friends in the car are common distractions leading to a deadly crashes.
But at the same time, a cell phone can help with directions and avoiding traffic.
Apps like Google Maps, Waze, and other tools can help a young driver, but at the same time distract them from looking ahead and keeping their eyes on the road.
What Risks are Parents with Teen Drivers Exposed to?
Knowing the financial risks and exposures you have as a parent of a teenage driver is important.
As a parent, you MAY be 100% responsible for any and all damages your teenager causes.
And there are many factors to consider,
Here is a common question parents have about their teenager getting a driver’s license and starting to drive:
Who should sign my child’s driver’s license, and why does it matter?
Okay, here is the deal.
The parent who signs their child’s driver’s license is on the hook and equally responsible for any, and all, damages the child may cause while operating a motor vehicle until their child’s 18th birthday.
This is the Florida law.
The parent who takes their child to the DMV to get the child’s driver’s license and signs on their child’s driving permit becomes 100% liable for any and all injuries, death, damages, and/or property damage that their young driver may cause until the child becomes an adult.
So, which parent signs the driver’s license is something to consider.
Adding Your Child to Your Family’s Existing Insurance Policy VS their Own
Another commonly asked question from parents with teen drivers is this:
“Should I add my child to our existing family car insurance policy or should the child have their own insurance policy?”
The bottom line is this:
You should most likely keep your child on your family car insurance policy.
Yes I know.
You may be shocked at the increase in price when you add a child.
You may be thinking:
“Well, I have a great driving record. I have not made a claim in years, and I don’t want to mess up my great insurance policy by adding my child to it.”
But as you continue through the rest of the guide below, it will become clear why you should add your child to your existing automobile insurance policy.
The main reason why it is a good idea to add them to your policy is because no matter what car your child drives, they are covered!
What if I get my teenager their own car insurance policy?
This sounds like a good idea at first, but here is the danger –
If you get a separate car insurance policy for your child and they have to borrow the family car for some reason and they get into a wreck…
Your family policy will say that your child was EXCLUDED from your policy.
And therefore, the family insurance policy will not pay one cent for any damage.
BOOM, Big Problem!
What this means is if, and when, your child uses the family car, you are uninsured.
And here is why:
Because your child is defined as a “resident relative,” most car insurance policies will deny coverage.
You most likely will be 100% responsible for all the damages and have NO INSURANCE to defend you or pay the damages at all.
This is why putting your child on the family policy prevents this sort of financial exposure and ruin to you.
What Type of Automobile Insurance Should I Get for my Teen Driver?
You need to know that the Mandatory Minimum Insurance coverage is not enough.
And sometimes people – even insurance agents – call the Mandatory Minimum Insurance “Full Coverage”
This is a huge misstatement.
The Mandatory Minimum Insurance that is required in Florida is a joke.
The law says the owner of a vehicle must have at a Minimum of $10,000 worth of Property Damage Insurance.
This is supposed to pay to fix other people’s cars or property.
And in addition to the property damage, the policy must have $10,000 of PIP, or no fault insurance.
To be Clear, this is All the Insurance Required by Florida Law:
- $10,000 of Property Damage
- $10,000 of PIP
What is PIP or No-Fault Insurance?
PIP or No-Fault insurance basically acts as medical bill insurance to pay the first $10,000 of medical bills for anyone in the car if they are injured.
So, if you buy the minimum insurance for yourself, your family, or your child, and there is a serious crash:
Then your insurance will only pay the first $10,000 of property damage and $10,000 worth of medical bills for the occupants in your car.
That is it!
Here is What Will NOT be Paid in a “Mandatory Minimum Insurance” Scenario:
Your insurance company will not pay for any property damage over $10,000.
How much do cars cost these day?
If your child damages another person’s vehicle and it is an expensive one…
Well, your insurance company will pay out the first $10,000…
And you will likely be responsible for everything else!
You may think,
My child t-boned and totaled an expensive car, but the other person has good collision insurance.
So that person will be paid for the loss to their car,
And my insurance company will pay some,
So in the end it will all work out.”
But here is the catch –
Insurance Company’s Right of Subrogation
The insurance company who paid to replace the expensive car your child wrecked…
They may file a lawsuit against you and your child to recover the amount they paid to fix their insured’s vehicle.
This is called a right of subrogation.
Here is what else won’t be paid if your child is at fault for a serious crash:
Your insurance company won’t pay a penny for the injuries that were caused by your child to other people.
For example, if your child makes a simple mistake, crashes, and causes a brain or spinal injury to someone…
The damages may reach into the millions of dollars.
Buy Bodily Injury Insurance
Buy Bodily Injury Insurance to protect you, your child, and your family from financial ruin that can easily happen in a moment of distraction on the road.
What does insurance do?
What do you get for your premiums?
What are you paying for?
You get two things: Indemnity and Defense.
What is Indemnity?
This is the amount the insurance company agrees to pay for a loss.
So this is basically the policy limits.
It’s sort of like buying sugar.
You can buy as much as you want, but you only get as much as you pay for.
So, Indemnity is the AMOUNT of coverage you purchase.
What is Defense?
The second thing you are paying premiums for is a defense.
This means that your insurance company agrees to defend you if or when a claim is brought.
Insurance companies have tons of insurance adjusters who are supposed to gather as much information as they can about a claim.
Car insurance adjusters try to figure out who is at fault, what the damages are, and then try to “buy” you a release.
What does “Buy you a Release” Mean?
The insurance adjuster’s job is to pay up to your insurance policy limits (the amount of indemnity) and to obtain a signed full release of any and all claims against you.
So, for example:
Imagine a collision happens where you or your child is 100% at fault.
And assume the following are the damages:
- $4,500.00 to fix the other person’s car
- $15,000.00 to pay the other person’s injury claim
If you only had the mandatory minimum insurance coverages, your insurance company would write a check to the other person for the property damages of $4,500.00 and get a release for any other property damages.
This is a good thing, because the damages to the other person’s property is paid by your insurance company and since they got a full release, you’re not on the hook for any more property damage.
The problem is, you are still personally on the hook for all of the $15,000 of bodily injury damages.
So, you may think:
“Well, my child and I don’t have anything to go after,
So if we don’t pay the bodily injury damages, nothing bad will happen.
No personal injury lawyer would sue us because we have no money or assets to collect.”
This sounds pretty good, right?
You are not a target since you are not worth suing.
However, let me tell you about UM.
The Most Important Insurance You Can Buy: UM
Uninsured Motorist Insurance is the most important insurance you can buy.
So from the above scenario, imagine if the person your child injured has UM insurance.
And the UM insurance company pays the $15,000 worth of bodily injuries.
So the injured person’s medical bills were paid by their UM insurance company…
But now the UM insurance company sues you and your child, asserting their right of subrogation.
UM Insurance’s Right of Subrogation
This happens because the UM insurance company that paid their insured’s damages, has the right to sue any at-fault party to get their money back.
So, you and your child could be served with a lawsuit where the uninsured motorist car insurance company is suing you.
They sue you and your child to get their $15,000.00 back.
And when you try to notify your own insurance company, they would say:
We won’t defend you.
You are on your own because you did not pay for Bodily Injury Insurance.”
When you don’t do anything to defend yourself in court, the insurance company will get a judgment against you and your child for the full amount of what they paid, PLUS court costs.
What Happens if You Get a Judgement Against You?
Once the judgment is 30 days old, the UM insurance company will send a copy of the judgment and the crash report to the Florida Department of Motor Vehicles.
They will say:
“Hey, the owner and driver of a vehicle caused bodily injury damages and they owe us money.”
So, the Florida Department of Motor Vehicles will send you and your child a letter saying:
“Pay $15,000.00 to satisfy the judgment, or YOUR driver’s license will be suspended.”
You may think:
I had insurance. It was not my fault that my child caused a crash.
We were insured; we had “full coverage.”
And now I don’t have a driver’s license, and if I drive and get pulled over, I will go to jail?
How did things spiral out of control?”
To completely avoid this scenario, see what automobile insurance you should buy:
The Gold Standard of Car Insurance Coverage to Buy –
- Property Damage Insurance
- Which is required by law, but please get more than the minimum ten thousand dollars
- PIP No Fault Insurance
- Which is required by law
- Bodily Injury Insurance
- Which costs extra.
- Buy as much as your net worth excluding your home.
- Medical Payments
- Which costs extra and pays medical bills after PIP runs out
- Uninsured Motorists Insurance (STACKED)
- Most important and valuable insurance you can purchase because it pays you when you are hit by an uninsured motorist.
- Umbrella Insurance
- A separate insurance policy which adds extra coverage to you and your family
- Then add Uninsured Motorist to your Umbrella policy
- If you can afford an Umbrella policy, it does not cost much more to add UM to your umbrella
This is the gold standard of coverage you need to FULLY protect yourself, your child, and your family’s financial future.
What Car to Buy & How
There are a few common questions parents ask when figuring out which car to buy for their teen driver like:
Does the age of a car I buy for my teenager affect the insurance premiums?
The simple truth is this:
Buy a modern car and you will save money on your insurance.
Here is why:
When you buy the safest, modern car you can afford, the risk of a crash goes down, along with the severity of potential injuries.
Buy the Safest, Most Modern Car You Can Afford for Your Teen
You want a car that is safe for your child to drive.
You want one with the latest safety features, airbags, automatic braking and crash avoidance.
This may very well save your child’s life, while saving you money on car insurance at the same time.
Yes, the car is more expensive, but the insurance premiums will factor in the safety features.
The insurance industry realizes that if you buy a safer car that avoids a crash, or reduces the severity of injuries, then they have to pay less on a claim.
So the premiums should be lower.
Buy a Car for Your Child without Financing
Yes, as if it couldn’t get any more expensive, it did.
In the next chapter, you will learn the importance of putting the car in your child’s name.
Since minor’s cannot enter into a financial contract until they are 18, you would not be able to put the car in your child’s name if it’s financed.
Putting the Car in Your Name VS Your Child’s
Another common question parents ask is this:
“Should I put my child’s car in my child’s name, my name, both names, or neither of our names?”
The answer should consider this –
There are up to three people who can be sued for a car crash:
- The person driving the vehicle causing the crash,
- The parent who signed the driver’s license for the child driver,
- The owner of the vehicle causing the crash.
As a Parent, What Can You do to Protect Yourself?
One way to reduce your risk is to not own the car, which means putting it in your child’s name.
However, you may lose control of the vehicle since it’s not in your name.
If you put the car in your child’s name only, you have very little control over the car, such as dictation of driving privileges.
You would also lose any right to possess the vehicle, because your child owns the car.
They can do what they want with it such as sell it, lend it to a friend who is not a safe driver, etc.
The other thing to consider as a car owner is the financial risk an owner has.
Imagine someone borrows your car and causes a crash.
How much exposure do car owners have under the law in Florida?
As an owner of a vehicle, you are exposed up to the first $100,000 of damage caused by the negligence of the driver of your car.
This is why you want to carry at least $100,000 of bodily injury insurance on all of your cars.
And remember, as a parent who signs your child’s drivers license permit, you don’t have this $100,000 limit.
This is why you might consider carrying more than $100,000 of bodily insurance coverage.
Ownership of a car has risk and exposure.
When does it make sense to put the car in the child’s name –
The day they turn 18 years of age.
Say, “Happy Birthday!,” and transfer the title of your car to your child.
You have to go to the DMV and transfer the title to remove your name and your responsibility from the car title.
That way your child becomes the the sole owner of the car.
Bonus Tip for Car Ownership
One more thing about car ownership:
Imagine instead of putting your child’s car in your name, or their name, you create a personal property trust.
The trust is the titled owner of the car,
You are the grantor of the vehicle to the trust AND the trustee of the trust,
(Which means you have control of the vehicle, even though the car is not in your name,)
And your child would be the beneficiary of the trust.
This provides control of the vehicle, but no liability of ownership.
Invest in Teaching Your Child How to Drive
Another common question parents ask is:
What are a few things I can do to help my child become a good and responsible driver?
When your child is just out of middle school and ready to learn to drive, there are many things you can do as a parent to help them become responsible drivers.
Teaching your child good driving skills is the key for them to be safe, responsible, and have the right level of confidence.
Before getting behind the wheel, take time to map out a route, rather than randomly driving.
Discuss the key parts of driving, such as safe following distance, speed, and turning.
Go over all of the safety aspects of your vehicle, such as mirrors, lights, seatbelts, and making sure everything is properly adjusted.
Show them how to inspect the car, the tires, the windshield wipers, lights, and other safety equipment.
Once you and your child are on the road, coach your child with regard to speed, when to begin braking, and how to anticipate a light changing from green to yellow to red.
Try to not talk very much to allow the young driver to concentrate on what they are doing.
And after driving, take a few minutes to discuss what went well, what can be improved, and how to improve.
Ask your child how they think they did.
Establish Household Rules
Establishing curfews, rules and consequences with your child regarding use of their car can protect them from accidents.
Most fatal crashes involving teenage drivers happen after 9PM and when multiple passengers in the car are teens as well.
Consider allowing your teen to operate their car between 6AM and 9PM to reduce the risk of car accidents from drowsiness or drinking.
Restricting the number of teen passengers your child is allowed to drive around is also a great idea.
This is because the chances of teens getting into crashes multiplies with each additional teenage passenger present in the car.
Make sure when you establish your household rules you stick with them.
Consistency is important for teens when learning how to drive.
Enforce Safe Driving Habits
It’s important for parents to be conscientious when driving in front of their children.
Teenagers have the lowest seatbelt compliance of any age group and this is especially true when they are passengers.
Make sure you are setting the right example as an experienced driver by always wearing your seatbelt, making sure all of your passengers are buckled up, and never using your cell phone while driving.
Obey the rules of the road, drive carefully and within the speed limit, and give your teen passengers tips while driving around together.
Will You Take the Pledge to End Distracted Driving?
It is a powerful message for your child when the whole family pledges to protect lives by never texting or talking on the phone while driving.
Also, pledging to be a good passenger and speak out if the driver in your car is distracted.
Make a promise to encourage friends and family to drive phone free.
Do you have any more questions about how to prepare for teen drivers?
Let me know in the comments below!