Why is Auto Insurance for Teen Drivers SO Expensive?

Teenagers can be a real joy. They may be moody, contrary and they often become very good at pushing buttons. There is a good thing about them reaching their mid-teens however. While most of us are initially deeply concerned with them learning to drive, there’s a quick realization we will need to provide less “taxi service” for them. This means a little more freedom for both our teens and ourselves. Of course, that freedom comes at a cost. There is a little more stress and worry in our lives and OMG!!! What happened to those car insurance rates!!!

Why is Auto Insurance for Teen Drivers SO Expensive? The answer is statistics. Insurance is a statistics-driven industry and risks and rates are based on the numbers. For teens, many of these numbers aren’t good. This is largely due to inexperience which can only be cured by, well, experience.

The fact is 16-year olds have the highest crash rate of drivers of any age. One in five 16-year-old drivers will have an accident in that first year of driving. A third of the deaths that occurred to 16-19-year olds in 2010 was the result of a car accident. In spite of warnings about distracted driving, research shows 56% of teens have admitted talking on their cellphones while driving.

Now, you may say “Not my teenager” or “My teen knows better” but the insurance company has to look at the overall statistics. Teen drivers are inexperienced and that inexperience leads to an increase in accidents.

The good news is there is hope. If a young driver keeps his driving record clean, rates will decrease as he or she gains in driving experience. Money may also be saved if a student gets good grades. Attaching a driver monitoring device to a car can also result in lower rates. Before choosing a car for a teenager, check how a particular model will affect your overall insurance rates.

It can help to plan ahead. As a teen begins to move toward driving age, start considering what car they may drive and check to see how it will impact rates. Talk with your insurance agent about any potential discounts (like good grades) that they can be working on now. Most of all, talk to them about the dangers of distracted driving and set reasonable guidelines for automobile use. Practice safe driving habits yourself.

If you would like to discuss adding a teen driver to your insurance policy, contact us. We may not be able to help your teen become less contrary or moody, but we just may be able to minimize some of the sticker shock you will likely experience when pricing insurance for your new driver.