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UPDATED: Mar 13, 2020
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Teenagers’ car insurance is so expensive because they are one of the highest risk groups on the road. In fact, the Rocky Mountain Insurance Information Association (RMIIA) puts male drivers under age 25 as the drivers who pay the highest rates out of every other category.
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Although car insurance rates for teens are high, there are several ways you can lower the cost. There are also ways to cut down the risks by helping teens drive in a safer and more responsible manner.
Teen Insurance Rate Examples
To get a better idea of just how high insurance rates for teenagers can be, the RMIIA offers several examples. The examples they used are based on coverage that is above the minimum required by state law, a policy term for six months, and a driver who resides in Pueblo, Colorado.
A new male teen driver could expect to pay $1,101 for a six-month policy, compared to a new female driver who would pay $898 for the same coverage. This is the lowest example offered, based on a good driving record with no accidents and several discounts that may apply to teens.
If either driver gets a single ticket, he or she automatically loses the good driver discount. The male would then pay $1,206 for the six-month policy while the female’s rate would increase to $984. Tack an accident on top of the record, in addition to the single ticket, and the rates soar even higher.
An accident surcharge is added into the premium, along with the loss of the good driver discount. The male teen’s rate would clock in around $2,637 for six months and the female’s would increase to $2,152. Either teen is looking at monthly premiums of more than $350.
Teen Crash Statistics
The National Highway Traffic Safety Administration reports that traffic crashes are the No. 1 cause of death for teens and young people aged 15 to 20. It also notes teenagers are involved in triple the amount of fatal car accidents as all other drivers when compared on a mile-per-mile basis.
More statistics from the Centers for Disease Control and Prevention (CDC) elaborate on the drivers who are most at risk. Male teenagers between the ages of 16 and 19 are 400% more likely to crash than more mature drivers, up from the 300% of all teens in general noted above.
The death rate of male teen drivers and their passengers was nearly double the death rate of female teen drivers in 2006, the CDC says. The highest crash risk for teens overall comes during the first year the young drivers are allowed to obtain their licenses.
Risks Associated with Teen Driving
The reasons behind the high rates of crash can be linked to the numerous risk factors involved with teen drivers, according to the California Department of Motor Vehicles. This includes factors linked to being a new driver as well as the risks teens tend to take while driving.
New driver hazards include a lack of skill, but they also include lack of detection and perception. Skills that improve with regular driving typically include braking, vehicle handling, and identifying potential dangers.
New drivers are less likely to recognize potential dangers on the roadway due to a lack of skill in the area and the lack of knowledge of what those dangers actually are.
Another hazard is the perception new drivers often have of dangers they realize exist. They may underestimate a risk while overestimating their skill and ability to successfully avoid the risk.
Overestimating their skills as well as a sense of invincibility can lead younger drivers to take additional risks. They include speeding and running lights, ignoring traffic signals and signs, tailgating, turning and passing with no regard to safety or the laws, and infringing on the rights of pedestrians.
Seatbelts and Alcohol
Teens are less likely to wear seatbelts, a factor when it comes to fatality rates. Crashes and fatalities are also increased by the use of drugs and alcohol while driving.
Driving under the influence may be a double whammy for teens. Their inexperience driving, coupled with their body’s processing of alcohol puts them at a much higher risk of crashing than older drivers who even have the same amount of alcohol in their systems, the California DMV says.
Passenger and Nighttime Driving
Two more factors that up the risks associated with teen driving are carrying passengers and driving at night. The risk of being involved in a fatal crash increases proportionally to the number of passengers in the vehicle. For example, a teen carrying three passengers is three times more likely to be involved in a fatal crash than a teen driving alone.
Passengers can be a distraction by trying to converse or otherwise get the driver’s attention. They may additionally urge drivers to take risks they would normally avoid. This is most evident when male drivers are carrying male passengers.
Driving at night cuts down on visibility, automatically increasing the risk for drivers at any age. Top that off with less experience with nighttime driving, being tired or deprived of sleep, and being out at night for a good time and the risks increase dramatically. The California DMV reports the rate of crashing after 9 p.m. is triple the rate of crashing during daylight hours.
Making Teen Driving Safer
Graduated drivers licensing is one way to help reduce crashes, the CDC reports. These programs are offered by many states and involve the incremental establishment of driving privileges as teens become more accustomed to the road during training with an experienced motorist.
Statistics show graduated drivers licensing programs have helped decrease the fatal crash rate by 38% and the injury crash rate by 40%. The statistics reflect crashes involving drivers who are 16 years old.
Making Teen Car Insurance Less Expensive
Safety may be the number one priority for teen drivers, and lowering the insurance rates may come in at number two. While the cost of insuring a teen or new driver is generally going to be higher than insurance for an experience motorists, there are still ways to make the policy more affordable, the RMIIA points out.
A number of discounts may apply to teen drivers. These can include a good driver discount, a good student discount, and reduced rates for enrolling in driver’s education courses beyond the basics.
Teen insurance rates can dip if the teen opts to be included on his parents’ car insurance policy rather than holding an insurance company of his own. Companies may even waive additional premium costs while the teen is still in the driver permit stage and only increase the cost once the teen officially has her driver’s license.
The type of vehicle the teen drives typically plays a part in insurance costs. The answer is not necessarily a beat-up, old clunker that parents don’t care if the teen wrecks. The answer is a stable, solid vehicle with plenty of safety features.
Not only do safety features usually merit a discount, but they can reduce the chances of death and injury if an accident does occur. Safety features include anti-lock brakes, airbags, and automatic seatbelts.
Stability and durability are other factors in your teen’s choice of vehicle. Insurance costs are generally higher for cars that are costly to repair as well as for vehicles that are frequently stolen.
Putting your teen in a sports car may be asking for trouble. Sports cars may not only be expensive, but they are built for speed. Such a build may encourage your teen to speed or take other behavioral risks.
If you are thinking of purchasing a new car for your teen, check on the rates to insure the vehicle before you layout the cash. Insurance companies can provide estimates on how much it costs to insure a particular vehicle based on its age, make, model, and market value.
Other Factors to Note
Several other factors may weigh heavily on the cost of teen insurance, or even the ability to get insurance in the first place. Lending a vehicle to a friend may be OK as far as the insurance company is concerned if the friend is a licensed driver and has permission to use the vehicle. The vehicle’s insurance may well cover other drivers, but checking with your insurance company is the only way to be sure.
Without the owner’s permission, however, it could be a problem. This may apply if a teen loans out mom’s or dad’s car without their knowledge or consent. Loaning a car to friends can also become a problem if the friend crashes and is at fault for the accident. This can result in increased premiums, even if the policyholder is not the one who caused the crash.
Driving under the influence can result in license suspension, particularly for a new driver. This may automatically result in a cancelled policy. When it comes time to obtain new insurance, the rates are likely to be even higher with a DUI on the driver’s record.
Although teen insurance rates are generally the highest around, driving safely, choosing a vehicle wisely and asking for discounts can help bring the rates down dramatically. Shopping around still remains a good practice for obtaining the best rates and quality insurance for drivers of any age.
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