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Why Is Teen Car Insurance So Expensive?
By now, you probably know the importance of having good auto insurance coverage in the event of an accident or injury. While poor coverage can leave you stranded with hundreds of thousands of dollars in medical debt, good coverage can ensure you have the treatment and continued care you need.
Naturally, when your teen starts driving, you’ll want them to have the best insurance. But many parents experience sticker shock. Car insurance can cost twice as much (or more) as your rate as an adult. Why on earth is it so expensive?
Car insurance cost is based on a calculation of risk. Teens may think they’re great drivers — and in the case of your individual teen, you may agree — but statistically, teen drivers are three times more likely to be involved in a car accident than a person older than 20.
One of the top reasons for the higher accident rate is a lack of driver experience, which can account for as many as 75% of teen accidents. When teens first get their licenses, they’ve spent a relatively limited amount of time on the road. They’ll encounter many driving situations for the first time and make errors that more experienced drivers probably wouldn’t.
Additionally, they’re more likely to engage in risk-taking behaviors. Teen brains are not yet fully developed, resulting in poor risk calculations. As one example, 43.1% of surveyed teens did not always wear a seat belt as a passenger — significantly increasing the chance of serious injury in the event of a crash.
Possibly the riskiest behavior of all is having other teens in the car. A study by State Farm Insurance found that male teen drivers were six times more likely to engage in an illegal maneuver when they had passengers. That’s why Georgia law doesn’t allow a teen driver to have any non-family passengers in the car with them for the first six months after getting their license and only allows one other passenger under age 21 during the following six months.
While it may be unfortunate for your pocketbook, high insurance rates for teen drivers do make sense. But the cost of auto insurance is nothing compared to the financial and emotional cost of an accident. Talk to your teen today about safe driving — it’s not just about their insurance rates, it’s about their lives.