Adding a young driver to insurance is expensive because they’re so high risk. Per mile, the fatal crash rate for drivers ages 16 to 19 is three times higher than motorists ages 20 or older, according to the Insurance Institute for Highway Safety’s Highway Loss Data Institute.
Teens’ general lack of experience behind the wheel puts them in a vulnerable position to begin with. They’re also at a higher risk of crashing if driving while impaired or intoxicated, and they tend to drive more recklessly, engage in distracted driving more frequently and wear seat belts at lower rates than older drivers.
Younger people have a bad reputation of being risky drivers and typically face additional scrutiny from insurance carriers. Most carriers check a young driver's record every six months, but won't regularly check an older driver's as these checks can be costly - and older drivers typically are safer drivers.
It’s actually Americans between the ages of 30 and 49 who are the country's most ticketed drivers. Thirty-one percent of 30- to 49-year old have received a ticket for a moving violation in the past five years, compared to 25% of 18- to 29-year-olds.
Drivers under the age of 50 who receive a ticket are much more likely to see their insurance premiums rise than older drivers. In fact, drivers 18-49 years-old are three times more likely to see their insurance premiums rise after receiving a ticket than drivers 50-64 years-old.
While the average annual car insurance premium was $815 in 2012, according to the Insurance Information Institute, residents of some states pay far more. For example, New Jersey’s average premium tops $1,200 per year, or $100 per month.
And low-income drivers often face an insurance penalty just because of where they live. A study released in September by the Consumer Federation of America found that a good driver seeking the state minimum coverage would get an average insurance quote topping $1,000 in 25.5% of the nation’s lowest-income ZIP codes.
In 6.2% of low-income ZIP codes, the average quote for minimum insurance topped $2,000, while only 2.6% of drivers in moderate-income ZIP codes and 0.3% of drivers in upper-income ZIP codes would see such high price quotes. In fact, living in a low-income ZIP code often results in higher rates than having an accident on a driver’s record, the CFA found. And these quotes don’t even include the costs of comprehensive and collision coverage, which generally is required for cars that are financed.