Auto Insurance Premiums
Age is a key variable in determining auto insurance premiums, because it likely implies your level of driving experience.
With fewer years of driving experience comes a greater chance that your auto premiums will reflect this.
After age 30 the effect diminishes. But after age 65, insurance rates start to increase due to the increased risk posed by older drivers.
Teens love cars, but when the time comes to add them to their parents' insurance policy or to get their own, a sudden case of "insurance premium sticker shock" is likely to set in.
So why do youthful drivers have such high auto insurance premiums?
The answer is simple, they are a higher risk.
Teens drive less than all age groups but the oldest drivers, but their numbers of crashes and crash deaths are disproportionately high.
The risk of crash involvement per mile driven among drivers 16-19 years old is four times greater than older drivers.
In fact, the crash rate per mile driven is almost three times as high among 16-year-olds as it is among 18- and 19-year-olds.
Because insurance companies have to pay disproportionately higher claims out on teen drivers, they require teen drivers to pay much higher premiums.