Car Insurance Rates for Teenagers – Reduce the Risk and Reduce the Cost

November 3, 2017 · Posted in General Articles on Car Insurance 

Car insurance rates for teenagers reflect the fact that they are the highest risk pool of drivers. Insurance companies base their policies on risk so even the most responsible teen is lumped into this statistical group.

There are two primary reasons that this is so. The first is that they are young and therefore seen as immature. The second is that they are, by the nature of just receiving the license, inexperienced.

Statistically, the insurance companies are in the right. More accidents caused by poor decision making are caused by the under 20 set. Teens therefore pay a higher premium for their insurance.

Car insurance rates for teenagers can be lowered in three ways. The first and most important way is to get good grades. Students with a “B” average (3.0 on a 4.0 scale) get a break from most insurance companies. These students are seen as more responsible in the primary activity in their life and are thus going to be responsible in a secondary area, namely driving.

If a teen drives an older car or one that is completely paid off, they will also get a break on their insurance policy. This is because if the car is totaled, the insurance company has less to pay out.

Finally, parents can ask their insurance agent to increase the deductable in order to reduce the cost of the policy. They can then tell their child that in order to have the privilege of driving, they have to drive safely or pay off the difference between the damage and the insurance payout.

Car insurance for teens are always going to have higher premium rates than for those who are older, more mature, and more experienced. However, there are ways to minimize the cost of the policy. When teens show they are responsible drivers and good citizens, they can often get decent insurance.

Keep in mind that if the teen is responsible, he or she will establish a good driving record over time. This, combined with the fact that he or she gets older, will eventually lead to lower rates. High insurance rates for teenagers don’t last forever!

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