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Why teen car insurance is expensive: They’re bad drivers

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CarInsurance.com

Teen drivers and car insuranceThe worst driver on the planet just walked out of the local DMV.

Take young Hannah Abrams. In March 2009, she drove herself to school with her brand-new license. After school, she headed to the Ballston Mall in Arlington, Va., with a friend. Despite her mother's warning to avoid the circular ramp in the parking garage, Hannah decided to give it a try.

Entering the ramp, she hit another car on its way up, also being driven by a teen driver.

Hannah was devastated, as was her mother, Tamar. Repairs totaled more than $3,000. But the Abrams were lucky. Nobody was seriously injured, and thanks to accident forgiveness with USAA, Hannah's car insurance rates didn't go through the roof.

Your teen -- and your insurance premiums -- might not be so lucky. No parent wants to believe his or her child is an irresponsible driver, but according to a recent study, newly minted drivers are some of the most dangerous and risky drivers in the world. They are certainly among the most costly to insure. (See "What a teenager does to your insurance rates.")

42 teens and 37 car accidents

The U.S National Institutes of Health (NIH) conducted the first observational assessment of teenage risky driving by tracking 42 teen drivers and their parents in the Virginia cities of Blacksburg and Roanoke for the first 18 months of licensure. Their vehicles were outfitted with internal and external cameras, along with a system that collected data on acceleration, mileage and GPS positioning.

"The first six months are by far the most dangerous," says Bruce G. Simons-Morton, senior investigator and chief of the Prevention Research Branch at the Eunice Kennedy Shriver National Institute of Child Health and Human Development at the NIH. "New drivers are 12 times more likely to be involved in an accident during their first month of driving than they will be just one year later."

During the course of the NIH study, the teens were involved in 37 accidents while parents had only two. Near-crash statistics were just as dramatic: 242 for the teens and 32 for the parents. While crash and near-crash rates for teens consistently dropped over the 18-month period, they never approached the rates logged by the parents.

While crash risk drops off dramatically during these first six months, risky driving continues and accident rates don't drop to adult levels until drivers are in their mid-20s.

So what is causing all of these accidents?

It is well-documented that driving is one of the most dangerous acts that a teenager performs.

Auto accidents are the leading cause of death of young people ages 15 to 20, according to the Centers for Disease Control (CDC). Teens are four times more likely than adults to be in an accident. They represent only 14 percent of the driving population, but account for 30 percent of all car accidents, says the CDC.

While it's not startling to hear that teens engage in risky behavior on the road, you might be surprised at the frequency. In the NIH study, teens were five times more likely to engage in risky driving behavior than adults.

Fast driving, rapid starts and hard stops were quite common, but sharp turns were recorded at extraordinary rates. Teens took corners sharply 25 to 30 times more often than parents did. Combine risky behaviors with modern distractions like texting and it is small wonder teens logged such high accident rates.

Simons-Morton recounts one teen accident during the study: "Teens drive fast and brake late. In this case, the driver got up to speed between stoplights, looked at his phone and rear-ended a car in front of him that had stopped for the next light. Inattention is a huge factor in teen accidents."

The NIH found that while teens improved at driving as time passed, their risky behavior continued even after they were involved in a crash or near-crash. Crash rates declined as they gained experience, the study found, but not because they were driving more safely. They simply learned to control the vehicle better during dangerous maneuvers.

Prepare to pay the car insurance man

All of this risky driving comes at a financial price. Adding a teen to your car insurance policy will usually double or even triple car insurance rates. (And yes, you do have to add them to your policy, or specifically exclude them. See "A parent's guide to insuring a teen driver.")

While young drivers' car insurance needs will vary, premium increases will be significant in most cases. Nancy Donahue, spokesperson at Dowd Agencies, says parents can expect at least a $1,500 annual increase.

In fact, it could be more. Analysis by Carinsurance.com found even bigger increases were possible. In Culver City, Calif., adding a teen to a typical policy upped the premium a whopping $2,854 annually, a 232 percent increase.

These figures assume that your teen driver manages to keep his or her record clean. According to the National Highway Transportation Safety Administration (NHTSA), a 16-year-old gets a traffic ticket at about 1.8 times the rate of the average driver. And a simple rear-end collision can raise the rates an additional 25 percent.

New-driver car insurance rates will drop over time as teen drivers gain more experience. According to Steve Witmer, spokesperson at American Family, rates start adjusting downward at 19, 21 and 25 years of age, assuming a clean record.

What can parents do?

Delayed driving and parental involvement are the best ways to keep a teen safe during the first years of driving.

When a parent is in the car, the NIH study found, accident rates drop dramatically. In most cases, they fall to levels matching the parent group. Parents help manage the vehicle as well as keep attention focused on the task at hand: driving the car.

Simons-Morton also advises parents to delay licensure as long as possible. "A 17-year-old is more mature than a 16-year-old. GDL (graduated driver licensing) programs are the best and most effective thing that states and parents can do to keep teen drivers safe."

GDL programs delay full licensure by dividing the licensing process into three stages: a supervised learner's period, an intermediate period with limits related to driving in high-risk situations, and finally a full-privilege license.

Simons-Morton reminds parents that while learning the basics of vehicle management is fairly easy, developing the judgment and attention to detail necessary to drive safely can take years of practice.

Not all driving conditions are equally dangerous; Simons-Morton recommends restricted driving during the following conditions for at least the first year:

  • Nighttime driving
  • Inclement weather
  • Challenging or curvy roads
  • Driving with more than one passenger

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