Driving has always been a symbol of adulting and maturity among teens. While adolescents can’t wait to get their hands on the car keys, it is the parents who have to deal with the skyrocketing car insurance premiums. In this post, I would like to address the elephant in the room and clarify what parents often wonder out loud – Why teen drivers have to pay more auto insurance premiums?
First and foremost, let us understand the main parameters that impact how insurers determine car insurance premiums. The type of coverage, deductible amount, insurance history, credit score, driving record, and age are a few major factors that affect the auto insurance rate. While we focus on why and how age impacts premiums, it is essential to know that there is a correlation between age and other factors such as insurance history, driving record, and credit score.
How Age Impacts Car Insurance
The general trend around car insurance is that it decreases with age. When you start driving as a teen, you pay really high premiums. But as you grow older, the auto insurance premiums decrease gradually along with age. This brings us to the next question: why age plays a role in determining car insurance premiums? It can also be rephrased as to why teens pay more for auto insurance.
4 Reasons Why Teen Drivers Pay More Car Insurance
- Lesser driving experience: When it comes to driving, experience matters. Insurance providers value driving experience while deciding premiums. Teen drivers have lesser driving experience when compared to their older counterparts, and thus are more likely to commit mistakes on the road. Thus, insurers see them as a bigger risk than the older drivers and hike their car insurance premiums.
- No record of previous insurance: When you are buying auto insurance, the insurance company checks your insurance history to find out if you had made any claims, defaulted payments, or gone without an insurance cover for a significant period of time. Your claims history highlights if you are a safe driver or not. Similarly, if you have been uninsured for some time, it underlines your carelessness when it comes to insurance. Your insurance history could hike or reduce auto insurance premiums drastically. Since teen drivers have no previous record of insurance, the insurer marks them as an unknown risk and increases the premium costs.
- Teens are more prone to distracted driving and rash driving: Almost all insurance providers consider distracted driving and rash driving as a serious driving offence. Statistically, teens tend to be easily distracted by mobile phones or other handheld devices. Also, many teens have a history of being indulged in racing and rash driving. Since teens are more prone to distracted or rash driving, the insurance company treats them as higher risks as compared to other age groups.
- No previous driving record: Your driving record sheds light on your driving skills as well as your ability to follow the law. Infractions like speeding tickets, distracted driving, jumping the signal, parking tickets, etc. are lodged to your driving record. The cleaner your driving record, the cheaper your car insurance will be. Since teen drivers have no previous driving record, the insurers can’t judge their driving abilities and treat them as risks.
How to Reduce Your Teen’s Car Insurance
- Increase deductibles: If you are assured that your teenage son/daughter is a safe driver and is not prone to collisions or accidents, you can increase the deductibles to decrease the coverage amount. This will help in lowering the auto insurance premium.
- Add your teen as a secondary driver in your insurance: If you are not planning to buy a car for your teen anytime soon, and they use the car only on rare occasions, then you could consider adding them as a secondary driver in your coverage. When you compare secondary driver insurance quotes to teen driving insurance quotes, you will see a major difference in costs.
- Reconsider dropping your coverage: If your teen is driving an old car that has depreciated highly over the years, then you might want to drop the comprehensive coverage as the cost of repairing the damages might be more than the actual value of the car. And, lesser coverage equals lesser car insurance premiums.