The answer to why do young drivers pay more for car insurance lies in statistical data. Statistically, young motorists are four times more likely to get involved in a fatal crash, compared to over 25 year olds. This is what scares most insurers away from insuring teenagers. And if they do they want an arm and a leg for premiums. Some companies are probably exaggerating this correlation when they quote for a new driver. It is understandable that some carriers turn down or price high risk applicants prohibitively because they have enough good ones in their books. On the other hand, some high risk auto insurance companies are better equipped to insure inexperienced and risky motorists.
Another answer to why is car insurance for young drivers so expensive is that they cannot qualify for enough discounts. The key reason for cheap rates offered to older drivers is because they qualify for a few discounts for having long clean driving history, good credit score, owning a home and living in nice zip codes. Of course, they get further discounts for their age too. Youngsters need time to build positive history.
Average auto insurance rates by age table in that post demonstrates this point clearly. Most young people would be disappointed to learn that they may not be able to afford to insure it, even if they can manage to buy a car. This generalization will result in high average car insurance rates for teenagers even though they have not done anything. In fact, it is irrelevant that they are not personally responsible for such decisive statistical data because underwriting works on predictions. Young people will be charged high rates until they have enough proof that they will be responsible behind the steering wheel.
How to Reduce Insurance Premiums for Young Drivers
How could they prove that they are more responsible than their age group? This may appear to be a tough question but many companies address this particular question. Hence there are several options available in this regard. One of them is to prove that they are putting their heads down and studying hard for their exams. Good grades are indication enough for some companies to offer lower rates to young people. If you are doing what it takes to be successful it is likely that you will do what it takes to be a safe driver.
Taking safe or advance driving courses is another good example of reducing risk. Many people argue that driving tests are not hard enough. They believe that tests should be made harder to reduce young deaths. They probably have a good point. A young person taking it on himself/herself to learn more and improve driving is in fact admirable. Even though it is mainly taken to improve driving it is a good thing for the companies to encourage them with lower premium offers.
Even when a young person cannot get immediate discounts they can achieve them within a year. After the first year without an accident most companies would be convinced to offer very good rate cuts to youngsters. With that thinking youngsters can look for a pay as you drive insurance policy or similar policies based on monitoring driving habits. Should they keep driving to minimum and to sensible hours they will not have to pay expensive premiums even in the first year. Then, they can look for more traditional policies since they would be eligible for no claim discounts.
Why is auto insurance more expensive for teenagers in their first year of driving? The first year is highly important in driving. There is a high chance of involving in an accident in this year than any other year. Perhaps parents should pay extra attention to their children’s driving as well. It does not mean that they are safe because they passed their tests. It is best to keep a distant watch in their first year.
Vehicle insurance is a business of pricing risk correctly. When there is a higher chance of claims there will be fewer companies offering reasonable premium quotes. Understanding this simple basic allows motorists to align themselves for lower rates. If a motorist is behaving irresponsibly, he/she must face the consequences. They usually come in the form of high premiums and most insurers become unwilling to take a chance with them.