The auto insurance industry assigns a level of risk to drivers based on a number of factors, such as age, gender, location and background. Unfortunately for teenage males, they have among the highest car insurance rates. Insurance companies view them as a greater risk than girls of the same age, or older, more experienced drivers.
Age and Gender
The insurance industry assigns a higher level of risk to male drivers under the age of 25 that increases the younger the driver. At 18, a male driver may have slightly lower costs than a 16 year old. However, teenage males will pay higher premiums than females. For example, the Rocky Mountain Insurance Information Association cited an insurance quote based on a male and female teenager driving a 2003 Honda. The RMIIA found that a teenage male residing in Pueblo, Colorado would pay $1,101 for a six-month policy, while a newly licensed female teenager would pay $898. In 2010, a Wall Street Journal article reported that State Farm said it charges approximately 40 percent more for boys than girls. Young people have yet to accrue the lower-risk benefits that are associated with adulthood, such as marriage and an established driving record.
Other Risk Factors
Aside from age and gender, some other variables come into play in determining how high your teenage son's insurance rates will be. For example, if he resides in a city as opposed to a suburban or rural area, rates may increase because cities generally have higher crime. The type of car he drives plays into determining costs as well. A flashier, faster sports car or one that costs a lot to repair will raise costs more than a sedan. In an interview with MSN Autos, Bob Hunter, director of insurance for the Consumer Federation of America, said his family opted for an older car for their teenage son, which kept the insurance at $300 a year rather than $700 for a newer car.
Regardless of gender, good students maintaining a "B" average or above will often earn discounts for car insurance, usually saving 10 to 15 percent. The discount is based on the concept that teenagers who do well in school are more diligent and a lower risk than high school dropouts or poor students. Taking a course in safe driving can also help earn lower rates. Lastly, the longer your 18-year-old goes without a ticket or accident, the lower the rates will be, based on a good driver discount.
If possible, a teenager should remain on the parents' insurance policy for as long as possible. Though the costs may be double for the parents if the child is on the policy, the costs are much greater for the teenager on his own. In addition to an established policy, parents may have other factors that lower rates overall, such as a multi-line discount if they have homeowners insurance with the same company.