Many parents complain about student car insurance since premiums are often more expensive than usual. Parents are not keen on this additional expense after buying their child a car. Insurance companies, on the other hand, could not help but increase premium rates on students and they have a few good reasons for doing so.
It has a big thing to do with age. Students are young. They are still in high school or college, and that immediately puts them in the young age bracket of around 16 to 20 years old. Being young is often equated with inexperience. They are fresh out of a driving school program and their driver’s license just newly processed.
With these things in mind, it is easier to understand the higher rate imposed on student car insurance. An inexperienced person is basically subjected to a greater risk on the road. They are more prone to accidents since driving is new to them. They are very eager and excited that sometimes they tend to be careless and aggressive.
A car insurance company has to make the necessary allowances for these risks. If students are more prone to road accidents, there is an increased chance that they will have to pay for incurred damages. However, insurance companies also realize that generalizing the behavior of a youth is unfair and so they also created calculated adjustments on premiums based on several factors.
First, they look at a student’s general academic performance. Grades speak a lot about a person. A student can only excel if he studies well. If he is careful in maintaining high grades in school, he is likely to be cautious on the road too.
The car he drives will matter as well. A secondhand car will be awarded a lower rate when it comes to student car insurance than a brand new car. An SUV (sports utility vehicle) will be charged a higher premium because it is more difficult to drive and it is hot on the thieves’ eyes.
In some policies, a student can be classified as a frequent or occasional driver. The latter is given a lower premium because he will not drive that often and thus reducing the risk of accidents. If the usual route is just home-school-home, it is advisable to tick the occasional driver box and just commute to school from time to time.
Lastly, what some teenagers also do is to piggyback in their parents’ existing policies to get bigger discounts. Otherwise, they get their student car insurance from the same company as their parents’ and avail of packaged discounts.