Factors That Affect Young Driver Insurance Rates

Due to the lack of a young driver’s experience on the road, insurance companies tend to charge high insurance rates and premiums for young drivers. In addition to a lack of experience, the condition of a young person’s car will also play a large role in the rates an insurance company determines for a young driver.

To alleviate the costs of young driver insurance, a young driver should try to get good grades in high school or college. When a young driver receives good grades, he or she may be eligible for what is called the “Good Student Discount.” Many insurance companies will offer ten to twenty percent off of an insurance rate due to a student’s ability to excel in school. The reasoning is that excelling in academics requires concentration and choosing healthy behaviors, and that these same choices are also required for responsible driving on the road.

The make of a vehicle is a very important consideration that affects teen auto insurance rates. When a teenager is driving an old vehicle around, insurance companies assume that vehicle will be prone to breaking down and creating accidents. Conversely, when a teen drives a brand new car, the insurance company will assume it is in good condition and can be a safe drive on the road.

An insurance company may also look to a young person’s employment record as an indication he or she will be a stable driver. The longer a young person has been employed, the greater discounts he or she will receive on an auto insurance policy. If a young person lacks employment experience, this will result in higher premiums.

If a young person has been in trouble with the law, then he or she may have to pay higher insurance policy rates. Insurance companies do not view any violations of the law, no matter how minor, with any sort of favor. Even a misdemeanor crime can come back to haunt a young person when he or she applies for auto insurance.

Because women are less likely to get into accidents than men, gender also plays a role in determining the rates a person pays for insurance. While some may think this is unfair, the statistics prove that women are 25% less likely to get into accidents then men are.

Even a young person’s credit history can play a role in the insurance rates he or she pays. If a young person has poor credit history, this reflects a young person’s inability to be responsible with an important aspect of life, money. So too, insurance companies assume this sort of lack of responsibility may translate into a person’s driving life. Insurance companies only want to offer the best insurance rates to those drivers they confidently feel will not get into accidents on the road.

When a young person turns 25, his or her insurance rates will begin to decrease. At this age, insurance companies assume drivers have learned what it takes to be a safe driver on the road at all times. Some of the factors that affect young driver insurance will also affect us as adults, so while age and experience count for much, safe driving habits are important as well.

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