This shocking statistic explains why auto insurance costs teens so much
Car insurance is extremely expensive for young people. According to data from The Ascent, while the national average auto insurance premium for all drivers is $ 2,646, an 18-year-old driver must pay an average annual premium of $ 5,988.
Although most people know that it is more expensive to insure young drivers, that the more than double rates may surprise. That is, until you look at the statistics on the likelihood of young motorists being involved in a fatal traffic accident.
Young drivers face shocking risk of collisions
According to Centers for Disaster Control and Prevention, the risk of accidents for young drivers is enormous. Teenage drivers aged 16 to 19 were almost three times more likely to be involved in a fatal crash than drivers aged 20 and over.
This statistic is based on mileage, so it is adjusted for the amount of driving teens tend to do compared to older drivers. The CDC also claims that, tragically, up to seven teenagers between the ages of 13 and 19 die each day from road accidents.
The financial loss from these fatal accidents is astronomical. The CDC reports that teenage driver deaths in fatal crashes resulted in medical costs and job losses of $ 4.8 billion in 2018.
The CDC says newer motorists are the most at risk for crashes, with 16-year-olds facing 1.5 times the crash rate of 18- and 19-year-old drivers. Factors that increase the risk of fatal collisions in adolescents include:
- Lack of driving experience
- Drive late at night and on weekends
- Use seat belts less frequently
- The increased likelihood of driving while distracted
The high risk of accidents and collisions among young people is why insurance companies charge so much for teenage drivers, whether they are added to a parent’s insurance policy or they are buying a vehicle themselves. assurance.
There are two big things that insurance companies aim to determine when pricing an insurance policy. They consider the likelihood of a driver being involved in a collision resulting in an insurance claim, and they consider the severity of such a collision. The more likely an insured is to break down, the more the insurer sets the premium, because it takes a greater risk of paying a claim. And the higher the probability of a serious accident, the more expensive the insurer will expect a claim to be and the higher the premium will be.
Teenage drivers can try to lower their premiums by showing insurance companies that their own risk of an accident is lower. Taking driving lessons and getting good grades can help. But even in the best of cases, young people will be charged more for insurance, as statistics show their risk of a costly accident is much higher than for most motorists.
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