This shocking statistic explains why car insurance for teens costs so much

Automobile insurance for youth is extremely expensive. According to data from The Ascent, while the national average auto insurance premium for all drivers is $2,646, an 18-year-old driver faces an average annual premium of $5,988.

Although most people know that young drivers are more expensive to insure, rates of more than double that may come as a surprise. That is, until you look at statistics on how likely young motorists are to be involved in a fatal motor vehicle accident.

Young drivers face staggering risk of collision

According to the Centers for Disease Control and Prevention, the risk of accidents among young drivers who are present is enormous. Teen drivers between the ages of 16 and 19 found almost three times Drivers age 20 and older are more likely to be involved in a fatal accident than others.

This figure is on a per mile basis, so it is adjusted for the amount of teens driving compared to older drivers. The CDC also states that, tragically, at least seven teens between the ages of 13 and 19 die from motor vehicle accidents every day.

The economic damage caused by these fatal accidents is astronomical. The CDC reports that teen driver deaths in fatal collisions resulted in $4.8 billion in medical and work loss costs in 2018.

The CDC says new motorists are most at risk of a collision, 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 teens include:

  • lack of driving experience
  • late night and weekend driving
  • less frequent use of seat belts
  • Increased likelihood of driving when distracted

The high accident and collision risk among young people explains why insurance companies charge so much for teen drivers, whether they are added to a parent’s insurance policy or they purchase insurance themselves.

Insurance companies aim to determine two big things when pricing an insurance policy. They consider the likelihood that a driver will be involved in a collision that will result in an insurance claim, and they consider how serious such a collision may be. The higher the chance of the policyholder having an accident, the higher the premium the insurer will set, as they are taking the greater risk of paying a claim. And the higher the chance of a serious accident, the more expensive the insurer expects it to be, and the more they raise premiums.

Teen drivers can try to reduce their premiums by showing insurance companies that their own accident risk is low. Taking driver’s education classes and earning good grades can help. But even in the best-case scenario, young people are being charged more for insurance, as statistics show the likelihood of a costly accident is far higher than that of most motorists.

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