7 Reasons Why Teenagers Pay Extra For Car Insurance

Published on: 29 August 2018 Last Updated on: 08 August 2019
Car Insurance

Car insurance for teenagers is more expensive than experienced drivers. Teenagers, who are at a very young and vulnerable stage of life, often lack any formal driving experience. They learn the skills of driving in this age and polish it with practice. The motor vehicle associations understand the susceptibility of their age and therefore the cost of car insurance for teenagers is higher.

In order to understand this concept in detail, we have laid down 7 reasons that “why teenagers pay extra for car insurance”:

No Proven Track Record of Driving

The insurance companies consider the driving history of the applicant before issuing insurance premiums. In the case of teenagers, there is no proven track record of driving. Since they are at the beginner’s stage of learning, there is no evidence to support their expertise on the road. The risk factor stays high in this case.

In general, the people who have proven driving track record without any mention of traffic violations and accidents in their names can avail significant discounts on their car insurance policies.

The insurance companies need some statistical proof to make a judgment about the driving skills of applicants- which is not possible in the case of teenagers. Therefore, they cannot assume whether the teenage driver is a safe or reckless driver.

In order to cover their risk, they raise the cost of car insurance for teenagers to ensure some safety measures. However, at the age of 19, the insurance plan becomes affordable as you already have 1-2 years driving experience by this time. You can get car insurance here for 19 years olds.

Lack of Experience

It takes time in learning a skill and achieving expertise in it. Learning to drive certainly takes more time and effort as we face different situations every day on the road. The young drivers need to dedicate a lot of practice hours to polish their skills before they can take their own vehicle independently on the road.

The amount of time spent behind the wheel is a considerable factor in enhancing the driving abilities of young drivers. In the case of teenagers, their lack of experience can put them to test while facing real-life driving situations. Their reaction time may be slower than an experienced driver which is much needed when you are in actual driving practice.

It is often seen that the young drivers get into a panic very easily when they face unusual situations on the roads. There are research studies to support the fact that most of the accidents that involve youngsters are due to their delay in reaction to the situations that prevail.

Emotional Distraction

Young people often get stuck with emotional issues. Their vulnerable age often brings out the “rebellious” attitude which may result in anger, sadness, extreme happiness, excitement, overreaction, anxiety, etc. They have very less understanding of dealing with their own emotions which may cause serious troubles while driving.

For example- despite many public advertisements, youngsters use their mobile phones while driving. The overconfidence can lead to the accident-prone situation very easily.

Youngsters often pool their vehicles and go for diving expeditions. Mutual talking and discussions while driving can distract their attention from the road. It is also common for youngsters to appreciate unusual sights on the road and get diverted from their driving spree.

Insurance companies take these facts into account and use substantial proofs to put forth their risk level before issuing car insurance to teenagers.

Increased Tendency Towards Speed and Racing

There is no denial of the fact that teenagers love formula races and speed games. When they sit behind the steering, they get tempted to race with the cars on their track. Sometimes they have their own bunch of friends racing while driving.

The scientific studies have reported that teenagers are easily aggravated by smoking, drugs and alcoholic tendencies. Under the influence of these factors, they may be instigated to adopt risky behaviors while driving. The understanding of the risks and their implications can be attained only with age and experience.

The insurance companies state that the lower rates of premiums for the experienced drivers are supported by the statistics that prove that they are less prone to accidents as compared to teenage drivers.

The Risk of the Insurance Companies

The teenage drivers are at a higher state of financial risks for the insurance companies. The higher the probability of being at risk of accidents raises the probability of higher expenditure of the insurance companies. Therefore, in an attempt to cover the risks associated with the young drivers, they raise the cost of the policy.

The Statistical Proofs

We have already discussed various factors that may cause teenagers to become riskier while driving. It should be mentioned that our studies are based on statistical findings from various reports. These reports emphasize the high probability of teenage drivers being involved in road accidents. The data has been collected by the years of research that bring the car insurance firms at a higher edge of risk.

The Make and Model of the Vehicle

We often get to hear that the teenagers are gifted their “favorite vehicle” on their birthday or any other occasions. Although this practice is popular in rich and affluent families, these days even the middle-class segment has roped into the trend. Thanks to the easy loaning facilities!

However, parents often forget about the risk associated with allowing teenagers to drive new and expensive cars with high-speed parameters. The insurance companies charge more from their clients who want to purchase insurance of a premium car for their teenager ward.

The reason is clearly stated- higher speed parameters of the vehicle are directly proportional to the high financial risk factor of insurance companies.

Conclusion

Teenagers pay extra for car insurance due to the high amount of risk associated with their age and the levels of maturity. There are facts to support the rash driving incidents leading to fatal accidents in many cases that involve teenagers.

Therefore, the higher rates of insurance are just a precautionary measure by the insurance companies. They intend to ensure that the applicant, as well as the company, must be fully prepared to deal with the possible risky outcomes due to driving errors. Higher is the risk of the insurance company, higher is the cost of the premium.

Read Also : 

Content Rally wrapped around an online publication where you can publish your own intellectuals. It is a publishing platform designed to make great stories by content creators. This is your era, your place to be online. So come forward share your views, thoughts and ideas via Content Rally.

View all posts

Leave a Reply

Your email address will not be published. Required fields are marked *

Related

financial problems

Major financial problems that can affect a new business

For a new business just fresh out of the concept stage, there’s a lot of excitement ahead. However, there are often troubles on the horizon, and these tend to revolve around money issues. Finance streams may be in place when the business is first created, for example, but they can quickly dry up as time goes on. It’s expensive to hire staff, and this can often push a firm well into the problem zone. Here are some ways that new businesses can get around these problems. No finance streams : When a new business first launches, it’s usually the case that there’s some form of finance behind it – at least for a short time. The entrepreneur themselves might be financing it from savings, for example, while there may also be an investor. The long-term plan is usually to have incoming cash replace this stream once it dries out – but revenues and profits don’t come overnight, and in fact, they often don’t materialize for a long time. Instead of relying on external finance providers, it often makes sense for a new business to be “bootstrapped”. Bootstrapping essentially means cutting down costs until you reach a stage where you have the funds to raise them back up. Instead of hiring an office space, for example, why not knuckle down and work hard in your spare room until you have enough – or almost enough – sustainable income to pay for a desk somewhere? It may be tough doing this sort of thing at first, but it could be the difference between business survival and failure. Staffing costs : In a bygone age of manufacturing and industry, the main cost that businesses faced was equipment. This also tended to be where companies made cutbacks when times were hard, either by downsizing their factories, leasing out their equipment or something similar. However, for many modern American businesses, the main cost is staff. Staff members are, in general, expensive. Some, such as coders and executives, command high salaries that can quickly drain a firm’s budget. Even when a person is hired on a lower salary, there are plenty of extra considerations to take into account, which can make the hire expensive: from the additional insurance premium that a firm might need to pay on their office space to the additional computer and desk space that the staff member might need, the costs can mount up. It makes sense for many firms to hire contractors instead of as they come with far fewer financial responsibilities for the firm – and the arrangement gives both parties the flexibility to move on if needed. With umbrella companies available to manage the tax side of contractor pay, there’s no need to worry about the effect that it might have on your HR or accounting departments either. Running a new business is exhilarating in some ways, but it also comes with its problems. Finance is almost always the big one – and from large staffing costs to dried-up finance streams, there’s a lot that can go wrong. However, by focusing on finance methods such as bootstrapping and choosing contractors instead of employed workers, there are ways that you can get that profit and loss sheet under control and move towards a more sustainable financial future for your business. Read Also : Invest In A New Car, Without A Financial Liability Debunking 7 Notorious Bankruptcy Myths

READ MOREDetails
GBP Savings Plan

How To Find The Best GBP Savings Plan

If you are in need of a GBP savings plan, there are many different ways to manage your money within current UK economic conditions. In this article, we will begin by describing some of the ways one can go about finding a plan that will best suit their personal needs and rationale for saving money. This methodical process will allow the user to choose wisely which plan they feel most comfortable with and allow them to proceed with purchasing it. Top 5 Ways To Find The Best GBP Savings Plan 1. Obtain a copy of the Minimum Income Requirements (MIR) Checklist This checklist is provided by the Bank of England and is a quick reference guide for those interested in finding out if they are able to qualify for any type of savings account. It lists the various factors that one must consider including certain financial requirements, personal details, and limited circumstances. It is important to note that this resource is not comprehensive, but provides a good starting point when looking into saving money. 2. Consider Your Payment method If you are in need of a GBP savings plan then it is important that you consider your payment method. Banks and financial institutions offer many different ways to manage your money; so make sure that you choose one that you will be able to adhere to and will best suit your needs. The most common methods are direct deposit, a bank transfer, or by making deposits or withdrawals in person at one of the bank's branches. Another aspect to consider is if a bank gives you the ability to write cheques. 3. Consider Your Interest Rate As previously mentioned, interest rates will vary depending on the type of account that one chooses to purchase. It is important that you choose a plan with a competitive interest rate so that you may maximize your money and save more in the long run. Also make sure that whatever plan you choose, that it provides a relatively high possibility of being eligible for ATM Cash Withdrawals. It is important to choose a GBP savings plan that suits your current financial situation and set of personal circumstances. 4. Consider Your Monthly Deposit Amount Understanding how much you are willing to deposit per month into your account will help you in the process of selecting an available option for your savings. To start, make sure that you have the money available to make the initial deposit payment in order to qualify for the account. Once you have been approved for the account and have made the initial deposit, you will be permitted to make monthly deposits that will be put toward your savings. 5. Take Advantage of Available Online Resources Today's technology provides many different useful resources that one can use to help them in their search for a suitable GBP savings plan. Consider using the internet to find out more information on the subject matter if you are not comfortable with taking advice directly from a financial advisor or banker. Many credible online sources are available to help educate you on the best ways to manage your money. You can find out useful information regarding different institutions, their available accounts, and interest rates. Often you can find online calculators that will help you to determine which plan is best for your personal financial circumstances. Conclusion As previously mentioned, many different types of accounts are available to the public, some have more restrictions than others. When choosing an account you should try to assess your own personal financial situation and find an account that best suits your needs. Using the methods and resources listed above will allow you to make the most informed decision possible when choosing a GBP savings plan. Additionals: How Money Management And Technology Combine Features To Ensure Success Of Your Money Saving Service Can Families Be Happier and Healthier And Still Saving Money? A Debate On Saving Money While Using Promo Codes Of Everlane

READ MOREDetails
Crypto Wallets

Exciting Facts About Cryptocurrency And Crypto Wallets

Cryptocurrency and the best crypto wallets are the ultimate digital money in today's era. This means there is no physical bill but its online. You can transfer cryptocurrency to anyone without going to the Bank to perform it. This is currently, one of the easiest and the quickest ways through which traders receive and transfer money to their customers and clients. The use of cryptocurrency will also help in ignoring the transaction fees for people. You can also use it as an investment and expect a good amount of increase in it. You can think of them as your arcade coins or casino chips in the process. To get a hold of the cryptocurrency or the best iOS crypto wallets for goods and services, you need to know certain crucial points: Exciting Facts About Cryptocurrency And Crypto Wallets: Things to know about cryptocurrency: Blockchain is a type of technology that is used for running cryptocurrency. This is a decentralized technology that is controlled and managed by the computer. Therefore, one of the best things about this technology is top-notch security. It is estimated that more than 2,200 various types of cryptocurrencies are traded publicly regularly. They help you to receive continuous profit and raise money with the assistance of initial coin offerings. According to experts, about $246billion was the total value of the cryptocurrency as of 2019. Bitcoin, on the other hand, has pegged about $136billion in the same year as well. The present times: Therefore, these cryptocurrencies are stored in special wallets known as the crypto wallets and are considered to be one of the safest places to store the coins. Numerous cryptocurrency platforms have these wallets available, either through the software or by using third-party software. However, both methods are considered to be safe. Therefore, cryptocurrency is currently seen as the currency of the future and every individual is racing towards it. Many believe that the existence of cryptocurrency is the best form of currency, thanks to the immense convenience it offers to users. Importance of Crypto wallets: After learning about cryptocurrency, it is easy to comprehend that crypto wallets are highly crucial. This is because it plays its part as a storage system for the coins. The wallet, however, is a digital secure wallet that is used not just for storing but for receiving and sending as well. There are different types of wallets available and each of them has their benefits, performance, speed and provide different outcomes. One of the most popular among them all is the ios wallet, as it is downloaded directly into the device and has the best security than the others. The wallet is managed and accessed with the help of a key. These are digital keys that assure the safety of your valuable possessions, which are stored away in these wallets. Keep in mind, do not lose the key, otherwise, the outcome will be much worse than you think. Ending words! With the information mentioned about both the crypto wallet and the cryptocurrency, it will let you receive a brief idea about the two things and the very important things. This will enable you to take your step accordingly when you are new in the world of cryptocurrency. Read Also: Bitcoin Profit Review 2019 How To Buy Bitcoin From Norway HybridBlock: Why Binance Is Investing In Crypto-Fiat Trading

READ MOREDetails