For the majority of young drivers, insurance prices are very high relative to those in other age demographics. While this may seem unfair, it is the reality of becoming insured as a young driver. Insurance providers base the premiums attached to policies on the assessment of risk, and unfortunately, drivers who are young are perceived as a greater risk to insure than are older motorists. Here are a few reasons why young drivers insurance generally has higher rates:
Lack of Driving History
Driving history is one of the rating factors that insurance companies use to assess risk. If somebody has been driving for 20 years and they don’t have a single ticket, accident or claim made, they have proven to insurance providers that they are good drivers and pose very little risk to insure. Young drivers have very little (sometimes no) driving history, so the type of driver they will turn out to be and the risk they pose to insurers isn’t yet established.
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Driving history is established by the length of experience a driver has, and unfortunately young drivers have very little, if any. The longer you have been driving for, the better chance you have of securing cheap car insurance premiums (if, of course, you maintain a clean driving record).
It isn’t just the lack of experience and driving history that makes young drivers insurance rates higher, but also the amount of risk this demographic poses to insurance providers. Accident rates, infractions, tickets and other incidents tend to be higher among young drivers than they are among older, more experienced drivers, meaning the chances of an insurer having to pay out a claim for a young driver is higher.
While young drivers insurance can be very high, there are ways that you can ensure that your get lower rates. Here are a few tips:
- As a parent, insure the young driver in your house as an occasional driver if they use your vehicle
- Avoid choosing cars with large engines or that are considered sports models as they will raise your premium
- If you can avoid being insured during the winter period, which is a high risk time of year, do so
- Drive safely in order to avoid any infractions or tickets! These raise car insurance premiums.
If you’re looking for a young drivers insurance policy that provides good coverage and won’t break the budget, contact our insurance experts at ARC insurance today!