For most parents, the day a teen gets his or her license is a frightening day. There are good reasons for parents to be concerned about a new teen driver in the family. One major issue is insurance rates will go up significantly when teens are added to the policy. The biggest concern for most parents, however, is that there is a significant risk of a teen driver becoming involved in a car accident.
An experienced personal injury lawyer knows insurers raise rates for teens because of the significant chance these young people will get into a collision and hurt themselves or others. The fact insurance companies raise rates so much for teens just underscores how dangerous these young people are on the roads.
Risks of Teen Crashes Cause Insurance Rates to Rise
NBC News reports the average insurance premium increase nationwide when a teen driver is added to the policy of a married couple is an 80 percent increase in premiums. Insurers measure risks when setting premiums, so this significant jump should alert parents of the major risks a teen faces when he starts driving.
Car crashes involving teens resulted in almost 3,000 deaths and 400,000 injuries in 2013. In two-thirds of the collisions involving a teen driver, someone besides the teenager sustained injury or was killed. The "impact of their [teenagers'] crashes extent well beyond the teen who is behind the wheel," according to the president and CEO of the AAA Foundation for Traffic Safety. Insurers know a teen who is involved in a crash could become liable for all losses caused to others and the risk of paying out large damage claims prompts the premium increase.
The younger the teenager, the greater the chances of a collision and the more significant the rise in insurance premium costs. On average, insuring a 16-year-old will cause a 96 percent increase in car accident premiums while insuring a 19-year-old causes only a 60 percent increase in premiums.
Female teenagers also present a less significant risk than male teen drivers. The average premium increase when adding a female teenager to insurance is 67 percent compared with a 92 percent increase for adding a teen male to a policy.
There are some steps parents and teens can take to try to reduce the financial impact of adding a teenager to a policy. Teens who maintain at least a B average are considered to be less high risk and discounts may be available from insurers of as much as 25 percent when parents and teens ask for a good student discount.
Parents may also add vehicle monitoring systems to cars in order to get a discount from some insurers. Vehicle monitoring systems could be a good way not only to help keep insurance costs low but also to make sure teens do not engage in some of the highest risk behaviors leading to collisions, like driving above the speed limit. By monitoring teens, parents could help to keep their kids and others on the road safe.