Why is insurance so expensive for teen drivers?

Why is Insurance So Expensive for Teen Drivers?

It’s illegal to drive without car insurance, but new drivers have some of the highest rates of everyone on the road. So what gives? The basic fact is that teen drivers are more likely to end up in an accident, so insurance companies charge more for their policies. We’ll break down what that looks like and what you can do about it.

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Teen driver accident statistics

Traffic accidents are the top cause of death among teenagers, and teen drivers are three times more likely to end up in an accident than drivers their parent’s and grandparent’s age. Only seven percent of drivers fall in this age range, but teens are a part of twenty percent of deadly car crashes. Suddenly it starts making sense why insurance is so expensive for teen drivers.

Some possible reasons for these troubling numbers are inexperience, distractions from cell phones and music, being unfamiliar with the rules of the road, being more willing to take chances (like speeding or tailgating) when friends are in the car, or because many teenagers begin experimenting with alcohol about the same time they are getting on the road. Any and all of these factors can contribute to a crash.

Teen Driver Insurance Rates Tips and Tricks

woman with piggy bank showered with money
There are ways to keep rates lower so that new drivers can practice driving without needing to pay an arm and a leg. Here are a few:

  • Maintaining a strong track record of safe driving can get lower rates and keep them lower.
  • Many insurance companies offer rate discounts for students with good grades.
  • Driving a car with good safety features like automatic seatbelts and airbags or driver assist systems can lower your rates.
  • Some companies offer programs where they will track a person’s actual driving for a time and lower rates for drivers with consistently safe driving.
  • Parents who add teenagers to the family insurance policy are able to spend less than they would on two separate policies, though rates for the family policy are likely to go up.

Especially during National Teen Driver Safety Week, it’s good to keep in mind the factors that go into a high insurance rate, and help students stay safe on the road. And if you’re looking for a new car and looking for either basic car loan tips or an outline on car pricing terminology, our blog is happy to help out!