Why Do New and Young Drivers Pay More for Insurance?

Beginning to drive your own vehicle can be both an exciting and expensive time. Purchasing a vehicle is a major expense, and protecting your new ride with insurance coverages that make the most sense for you is an important next step. If you’re a new driver, you may notice that auto insurance rates are higher for you than they are for someone older with an established driving record, and you may be wondering why.

 

The answer takes into account a few different factors, ranging from a general lack of experience to data that proves younger people are more likely to have an accident on the road. We’ve detailed these factors for you here, along with some tips to try to help you get the best rate available. Continue reading to learn more about why new and young drivers pay more for their insurance!

 

 

New Drivers…

           

Are Inexperienced

 

No matter how much preparation and studying a new driver does, until they have spent consistent time behind the wheel of a vehicle there can be a lot to learn to become a responsible driver. On top of having a sound understanding of different traffic laws and regulations, a driver is tasked with responding quickly and safely to a variety of signals, vehicles, pedestrians, and anything else that may make an appearance in their environment on and around the road.

 

Because of the lack of prior driving experience, a new driver can see up to a 30 percent surcharge on their policies. Additionally, young drivers have an elevated class factor indicating they are more likely to get in an accident that a more skilled driver may be able to avoid. Insurers take this into account when writing an insurance policy.

 

Have No Established Record

 

Most people know that, for better or for worse, their driving record has an impact on their auto insurance. Someone who has a clean driving history void of traffic infractions and accidents is more likely to pay a lower premium than someone with a history of speeding tickets and at-fault accidents.

 

When someone first begins to drive there is no driving history for an insurer to consider when writing their insurance policy. Because of this, insurers consider industry data on risk factors for different demographics to determine the risk.

 

Are More Likely to Be in a Crash

 

New drivers have less lived experience on the road reacting to the environment around them and are more likely to be visually and cognitively distracted. According to the Center for Disease Control and Prevention (CDC), the risk of motor vehicle crashes is higher among teens aged 16–19 than among any other age group.

 

Further at-risk groups include newly licensed drivers, drivers with teen or young adult passengers, and males, according to the CDC. The motor vehicle death rate for male teens aged 16–19 was more than twice that of female teens in 2019.

 

What Can New Drivers Do to Lower Their Auto Insurance?

 

While some of the factors that contribute to the price of auto insurance are out of anyone’s control, like age, there are some things a new driver can do to lower their auto insurance premium. If you’re looking to lower your auto insurance, following these tips may help!

 

●     Maintain a clean driving record: Your car insurance payment amount is dictated in part by your driving record. If you maintain a clean driving record, over time you will age out of the high-risk young driver demographic and become eligible for lower rates. As a driver ages from 16 to 30, every year their class factor risk decreases and consequently their insurance rates become cheaper.

●     Get a safe car: The make, model, and year of your vehicle also impact your car insurance payment. If you purchase a safe car, you’ll pay less on your insurance than you would for one that isn’t as safely equipped.

●     Take a defensive driving safety course: Some insurers will offer discounts for drivers who have taken defensive driving safety courses. Check with your insurer to see if you would be eligible for a discount by taking a course.

●     Maintain good grades: Many insurance companies offer a discount for drivers between 16 and 24 years of age who are full-time high school or college students, so long as they maintain an average of a “B” or its equivalent.

●     Update your agent: If you are a parent who has their child on your auto insurance policy, you’ll want to update your agent if they are away at college without a car. Some insurers will offer a discount on your policy if your child is living on campus at least 100 miles away from where their car is kept.

●     Bundle your insurance policies: If you’re purchasing other insurances, like home insurance, in addition to auto, you may be eligible to save by bundling your insurance policies. Contact an agent today to see if bundling your policies is right for you!