This stunning statistic explains why teen car insurance prices a lot – Motley Idiot
Car insurance is extremely expensive for young people. According to data from The Ascent, the nationwide average auto insurance premium for all drivers is $ 2,646, while an 18-year-old driver faces an average annual premium of $ 5,988.
While most people know that it is more expensive to insure young drivers, it can come as a surprise to see prices more than double. That is, until you look at the statistics, how likely it is that young motorists are involved in a fatal car accident.
Young drivers are exposed to a shocking risk of collision
According to the Centers for Disease Control and Prevention, the risk of accidents among young drivers is enormous. It has been found that adolescent drivers between the ages of 16 and 19 are almost three times more likely to be involved in a fatal accident than drivers aged 20 and older.
This statistic is based on a mile basis, so it is adjusted for the number of motorists teenagers tend to drive compared to older drivers. The CDC also says that tragically, up to seven teenagers between the ages of 13 and 19 die in car accidents every day.
The financial loss from these fatal accidents is astronomical. The CDC reports that the deaths of teenage drivers in fatal collisions in 2018 resulted in $ 4.8 billion in medical and work-related costs.
The CDC says the newest motorists are at the greatest risk of collisions, with 16-year-olds facing 1.5 times the collision rate of 18- and 19-year-old drivers. Factors that increase the risk of fatal collisions in adolescents include:
- Lack of driving experience
- Driving late at night and on weekends
- Use seat belts less often
- The increased likelihood of distracted driving
The high risk of accidents and collisions among young people explains why insurance charges so much for teenage drivers, whether they are included in their parents' insurance or if they take out insurance themselves.
Insurance companies aim to determine two big things when evaluating an insurance policy. They consider the likelihood that a driver will be involved in a collision that will result in an insurance claim and how severe such a collision is likely to be. The more likely a policyholder to crash, the higher the insurer will set the premium, as they run a higher risk of paying damage. And the higher the probability of a serious accident, the more expensive the insurer expects a claim to be and the more it increases the premium.
Young drivers can try to lower their premiums by showing insurance companies that their own accident risk is lower. Attending driving schools and getting good grades can help. But even at best, young people pay more for insurance because statistics show that their risk of a costly accident is much higher than that of most drivers.