Why Younger Drivers Pay Higher Auto Insurance Rates

The freedom a teenager feels when he/she gets a driver’s license is a rite of passage in our society. But the other part of that rite that we don’t often talk about is the rising insurance premiums that teens’ parents must pay. Teen drivers can cause family premiums to rise 50 to 200 percent. But there are legitimate reasons why it costs so much to insure teenage drivers.

Serious statistics

When you consider these statistics, it’s not a surprise that families with teen drivers pay 50 to 200 percent more on auto insurance premiums when their teens are added to their policies. Unfortunately, teens are insurance risks. Here’s why:

• The leading killer of young people age 15 to 20 is automobile accidents.
• Teenagers are three times as likely to die in an auto accident as those ages 25 to 64.
• The younger the driver, the more likely that an accident will happen. The frequency of crashes for 16-year-old drivers is almost three times as high as that for 19-year-old drivers, and nearly six times as high as those drivers age 20 to 24.
• In 2006, 3,490 teen drivers died in car crashes.
• Drivers age 15 to 20 represent 12.9 percent of all the drivers who die in fatal auto accidents.
• According to the National Highway Traffic Safety Administration, the accidents caused by teen drivers accounts for $40 billion.
• The NHTSA also reports that some 31 percent of teen drivers who were killed in accidents had been drinking.
• According to statistics provided by the Insurance Institute for Highway Safety, the death rate for 16- and 16-year-old drivers increases proportionally with every additional passenger in the car.
• According to a survey in 2005, 56 percent of teen drivers admitted to using cell phones while driving.

What you can do

The statistics don’t lie, and they also can be very troubling. But there are strategies parents can employ to keep their teen driver’s insurance costs affordable. Here are some of them:

• Make the grade: Teens who get good grades are often considered a better insurance risk. This means your premiums could be lower than those of a family with a teen who has poor grades.
• Take a class: Some insurance companies will provide discounts if your teen driver enrolls in a safe-driving school or another driver’s education program. Ask your agent if this is a possibility.
• Get competitive quotes: Your insurance premiums will go up with a teen driver, but it’s hard to say how much. You can confirm that you’re paying the right amount by seeking out competitive quotes from several different insurance companies at once. You can compare multiple policy proposals and determine the one that best fits your family’s needs.
• Raise your deductible: Your insurance premiums will go down if you raise your deductible. Of course, this means that you will end up paying more out-of-pocket should you file a claim. And remember that teen drivers are the most likely segment of the population to get into a serious accident.