How much do teens pay for car insurance?

Answer 1

There are many factors that determine the rates for car insurance. Far too many to spell out for anyone. Males pay a little more than females. Males reach a full adult rate usually at the age of 30 if single and 25 if married. Females reach the lowest adult rate at the age of 25 if single and at any age if they are married. Different companies have slightly different rating systems so this is not the same for all companies. Teens usually have their rates go down at 20 or 21 and can get substantial discounts if they are students with a B average (3.0) or if they have taken a 40 hour certified drivers training class. 16-18 year old males rates are the highest and are about 3 to 3.5 times the adult rate and they reduce at different points.

The foregoing provides some general guidance that applies in many cases. However, there are other factors that have to be condiered. Some of them include the following:

1. The State in which you live. By and large, insurance rates, from which premiums derive, are regulated by the State(s) in which an insurance company transacts business. The insurance regulatory authority generally takes the position that a rate (the cost of a unit of insurance) may not be excessive, inadequate or unreasonablu discriminatory. This means that the insurance company may not reap a windfall profit, but likewise, it must charge enough to have enough money on hand to pay anticipated claims. "Unreasonably discriminatory" refers to the requirement that risks of a similar type have to be treated similarly.

2. All insurance companies have to have underwriting guidelines that are approved by the regulator. These are the metes and bounds of what they will insure and what they will not. They do not dictate premiums, but they have a bearing because the guidlines may provide that a risk will be insured at a higher, or lower rate than another one.

3. Auto insurance also has different elements: the main ones are liability, collision, no-fault coverage (although the latter may be called something else in some States, and uninsured/underinsured motorist coverage. Although no-fault coveraage is generally a required first-party coverage (it pays a portion of the insured's own medical bills and lost wages), it is pretty standard so the premiums vary less than other coverages.

Collision coverage pays for physical damage to one's own car. Unless there is a lien outstanding on the car, the insured can opt to buy it or not. If purchased, it can be bought with various deductibles--the higher the deductible, generally, the lower the premium.

Uninsured motorist coverage is a type of first-party insurance. It comes into play if you were in a collision with a person that did not have liability insurance. The coverage applies to bodily injuries that you sustain from the collision and compensates you for them in much the same way as the other person's liability insurance would have if he/she had it. The cost of it depends upon how much you buy. Generally, your insurer has to offer it to you in an amount that is the same as your liability coverage. You may buy more, less, or reject it altogether.