Why Teen Car Insurance Is Expensive
Car insurance premiums can increase significantly when teen drivers are added to a policy. Teen drivers tend to be expensive to insure because insurance companies view them as high-risk drivers who are more likely to cause accidents.
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Function
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Insurance of any kind is meant to protect against uncertain losses or expenses. The cost of insurance is typically based on the amount of the potential losses and the likelihood that losses will occur. Inexperienced drivers like teens have no proven track record of driving, so insurance companies don't know whether they will turn out to be good drivers or poor drivers. This uncertainty puts pressure on insurance companies to charge more for insurance.
Time Frame
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The longer a young driver goes without an accident or traffic violation, the more willing insurance companies will be to lower insurance costs. Drivers over the age of 25 usually pay less than teen drivers and drivers in their early 20s.
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Considerations
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The cost of the car a teen drives influences how costly insurance will be. Driving an old, inexpensive vehicle will tend to reduce insurance cost.
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