If you're wondering why teens pay more for auto insurance, the truth is in most cases they don't. Their parents do. Seriously though, when you compare car insurance, you'll find teen drivers usually mean higher premiums—regardless of who pays.
There are a number of reasons for this, starting with…
Less Experience on the Road
Driver's education, while a very good thing, only imparts knowledge. Experience is what makes the difference on the road. Think about it. Veteran drivers know you shouldn't run a stop sign, even if it looks like nobody else is at the intersection. But until you've actually seen another car "come out of nowhere," it's just an untested theory. For teens, this can mean that rule is dumb—until they narrowly avoid being broadsided. This reasoning (or lack thereof) makes them more likely to take risks. Insurance companies factor that possibility in when considering covering a teen driver.
Additionally, inexperience can lead to overreaction in emergency situations, which can actually cause secondary accidents. One study found some 75 percent of teen crashes could be directly attributable to inexperience.
Teens Are More Prone to Distractions
The AAA Foundation for Traffic Safety studied the effects of teen drivers and passengers. They found adding a teen passenger to a car with a teen driver boosts the likelihood of fatality by 44 percent. Why? Laughing, talking, texting, and loud music are distractions for teens. This knowledge also contributes to higher insurance premiums for drivers in this group. In fact, some places have laws limiting the number of young people allowed to ride with a teen driver.
The Recklessness Inherent to Youth
While it might seem unfair to pin all of this on teenagers, young people have a tendency to believe they won't die. As a result, they tend to drive faster and with less regard for their personal safety. Medical studies have found evidence supporting the assertion teenage brains are predisposed to ignoring behavioral risks as a survival trait. It's what gives them the ability to leave home and strike out on their own. On the other hand, this can also mean they proceed even when they know the consequences could be disastrous.
"The key parts of the brain involved in controlling impulses and risky behavior don't really reach maturity until about age 25." This is according to child and adolescent psychiatrist Jay Giedd, in an interview with WebMD." During this phase of life, their psychological balance is tipped most in favor of high emotions and risk-taking." And yes, insurers routinely factor this in when setting rates for younger drivers.
The Bottom Line
So yes, the bottom line is absolutely a factor here. All of the above elements add up to more risk for insurance companies. And, if there's one thing insurance companies strive to avoid, it's risk. When they can't, they charge higher premiums to compensate.
So, ultimately, why do teens pay more for auto insurance? They represent more of a risk. Even with a teenaged driver at the wheel, CoverHound can help you find the best coverage for your household budget. Get a free rate comparison today!