FREQUENTLY ASKED QUESTIONS

Vivian from Brooklyn, NY Asks – “How Are Premiums Calculated for Teen Drivers?

Our answer:

On the surface, the answer is that car insurance premiums for teens are calculated the same as for adults. But underneath that, the insurance company will look at specific factors regarding the teen being insured, such as their gender, whether they have taken a driving course, and the grades they keep in school.

The basics for calculating a premium for adults includes the make and model of the car, the safety features built into the car, the age and gender of the driver, and even what neighborhood the person lives in. When a teen is added to the equation, these factors gain more weight, and are further affected by the items that are listed above. In some cases, such as when the parent owns an expensive vehicle, or has a less than perfect driving record, it may be less expensive to put the teen driver on a policy of their own, but if the parent is a safe driver or meets other requirements, the opposite may be true and the teen would be best added to their policy.

Men are a higher risk than women, on the roads. This is true for teens, as well, and this is reflected when the premiums are calculated for teen drivers. Boys tend to be more rebellious and headstrong, while girls pay closer attention to the rules. Gender makes a huge difference in the risk involved for the insurance company, and that risk is passed on to the policyholder in the form of a higher premium.

If the teen has taken a driver safety course at school, calculating their premiums could result in a lower bill, and if that same teen has taken a voluntary professional driver safety course outside of school sponsored programs, the likelihood of a savings is even higher.

Insurance companies regard a student’s grades as an indicator of the risk involved, as well. If the teen driver maintains a 3.0 or higher grade average, they are often eligible for a discount when calculating premiums for car insurance. Be sure to have the most recent report card with you when talking with an insurance agent. Be sure to often remind your teen that keeping their insurance rates as low as possible depends on them keeping their grades up!

How are premiums calculated for teen drivers? In much the same way as for adults. Instead of looking at the nature of their occupation, a teen’s grades are examined, but otherwise the same rules apply for teens as their parents: past driving record, their gender, and how much responsibility they have shown in other parts of their daily lives. Parents can’t change the gender of their children, but they can provide positive reinforcement for keeping good grades and enroll their kids in a driver improvement class.