Quick Insurance Blog

Want to know why is car insurance so expensive for teenagers? Read to find out.

Ah, sweet sixteen: ready to get a part-time job, ready to date, and ready-ready-ready to drive. Boy or girl, the hand is out for the key, the foot is twitching to hit the gas, and freedom awaits!

Except it is not so very free. Indeed, insurance for teenagers can be agonizingly steep even if the teen has taken appropriate driving and driving safety courses and is driving a statistically low-risk vehicle. You still look up the price of insurance and scream, sweat, and keep the keys in your pocket…and you kid looks at you with big eyes and asks, “Why?”

The reason teens cost more to insure is because, as a group, they then put more demands on their insurance than other demographic groups. The way insurance works is by spreading risk over group of similar individuals, charging a price that allows the company to break even on pay-out and operating costs, with a bit over as profit for the company and its stock holders.

Each group is charged according to figures evaluating how likely any one member of the group is to need pay -out from the insurance, how often, and how much. This area of math and science falls under the heading of “risk management.”

That is where mathematical precision puts the bite on insurance buyers. Statistically teen drivers have more accidents than other drivers. Not just a bit more: a lot more. Sixteen year old drivers are three times as likely to die while driving than any other demographic, and the improvement over time is slow.

Teens have more wrecks, teens cause more wrecks, and teens require far more pay-outs than other drivers. According to AAA accidents involving 15-17 year-old drivers cost $34 billion. Yes, billion! It should not surprise you that the insurance companies demand enough extra money to pay for that big, bad $34 billion.

Your kid then says, “But I am a good driver! I took my driver’s ed lessons, you made me take extra collision training, I am careful…”

The good news is that, first, if you child has taken driver’s ed lessons, and special ed for emergencies, the statistics improve. They improve further if your teen puts off driving a year or so. They are likely to be safer, and many companies reflect such things when calculating the cost of insurance. It is not impossible to find a responsible company that will grant a lower rate to a properly educated young driver with extra training and a bit of extra age.

The best way to find out who will cover your kid for the best available price is to do your homework. Evaluate plans, contact agents, and most of all get car insurance quotes. Quotes can be gotten in a number of ways, but one of the quickest in the beginning is to go online and search for quotes on driver’s insurance for teens.

When you have done your homework, evaluated the plans, then take a good, careful look at your homework and at your child. Do not be swayed by the big, pleading eyes…think instead how precious those eyes are to you, and how precious your child is to you.

If you think your child is realistically likely to drive well, cautiously, and responsibly, then it is time to pay up on the insurance, make sure you child will be driving a safe vehicle…and then, hand over the keys.

Use the quote form below to find the cheapest auto insurance rates for your teen: