Young Driver Insurance

Almost all insurance companies tend to collect higher premiums on young driver auto insurance. These rates remain high even in case of responsible young drivers, who have never been apprehended for non-compliance with any traffic regulations. According to insurance industry classifications, young drivers fall in the age group from sixteen years to twenty-five years.

There is a reason why the insurance industry holds this biased view. Statistics on accidents has revealed that drivers in this age group are more likely to meet with an accident. There are many reasons for this. Speeding is one of the most common reasons. Other reasons include the tendency of youngsters to ignore law willfully by carrying out some modifications to their cars that are legally not allowed. Young drivers are also likely to break law for fun, or in a hurry to get to wherever they are going. Drug abuse, and driving under influence of alcohol is also more common in this age group. The type of vehicle that the youngster drives often decides for the insurer what sort of driver he or she is likely to be. But within this category, young ladies can still get a better deal because girls in general tend to be cautious drivers.

Insurance companies have a complicated method of determining the appropriate premium for selling any auto insurance. All risks associated with the person seeking auto insurance are factored into a single rating factor. This composite rating factor is then multiplied to the standard or base rate. The result is the premium that should be collected considering all the risk factors associated with the person. This is the reason because of which car insurance for young drivers becomes expensive. Costly vehicles also increase the cost of such insurance. This is because they facilitate speeding, apart from the fact that both replacement cost and repair costs for such vehicles are rather high. It follows that if such a vehicle were involved in any accident, the insurance company would have to pay larger amounts towards claims. Bad driving record and previous offences do indicate the likelihood of the young driver to err again. But there are ways to bring down the young driver auto insurance costs. A less costly and less sophisticated car might help in bringing down the costs. Ensuring that there are no traffic tickets and traffic violations helps in bringing down the risk factor. Avoiding alcohol and drugs, especially when some driving needs to be done certainly helps. Ensuring proper locking arrangement for car is there so that the vehicle is unlikely to be stolen is another way to bring down the composite risk factor. Taking training from recognized car driving school helps. It is also necessary to conform to the rules associated with each level of car training. Therefore, at first level, if a licensed car driver should accompany the young driver, then it is necessary to follow this rule. One way to get a temporary reprieve from the high insurance charges is to take a policy along with the parents. The insurance company offers concessions in such a case because it expects parents to be using the car for reasonably long period, effectively reducing the time available for the young driver, thereby bringing down the probability of any accidents. But this cannot be a permanent solution. Eventually, the person has to take a separate automobile insurance.

In order to be effective and profitable, insurance companies distribute the risk over many people purchasing insurance policies. If they treat everybody at par, and charge uniform rates then it would be unfair towards those who are responsible while driving. This is the reason insurance companies fix a base rate, and based on this and the risk factor, they determine the right premium applicable for the young driver.