Does insurance companies determine the premium rates of teenagers and senior citizens?


The driving community just like all other communities has its own special sectors. These sectors are those which are excluded from the main from the general rules that the others follow. In the field of giving out car insurance policies the special sectors are that of the senior citizens and the teenagers. These sectors are at the extreme polarities of the social system, as obvious as it appears they are differentiated mainly through their ages. But the real score why they demand so much attention in applying car insurance policies is not based on age. Their policies and premiums are mainly determined through their ability to drive and their competence as a driver in the streets. There are tolls that people have to compromise for, due to their age. As in the case of car insurance policies these compromises come in the form of premiums. These premiums are paid at different rates by both teenagers and senior citizens to create accounts that would cover future possible expenses.

Teenagers are seen by insurance companies as riskier investments. The risks in insuring a teenager usually come from their inexperience and immaturity. Driving is a skill which is based on experiences; there are no textbook references to proper driving. Its instantaneous changes in situations can make experienced drivers make mistakes, what more if the driver is an inexperienced teenager? There are many other things that insurance companies consider like statistics. According to statistics teenagers who are involved in car accidents usually lapsed in the judgment before the accident occurred. To be able to create an insurance policy that would almost fully cover these possibilities, insurance companies require a higher premium. The premium rate for teenager policy holders is relatively higher than that of an ordinary policy holder.

On the other hand senior citizens who are still driving are still required to get car insurance policies. However the rates of a senior citizen who is applying for a policy is still the same with that of the ordinary policy holders. Senior citizens’ insurance rate will still be based on their driving record. The companies compromise their age through series of medical check- ups rather than higher premiums. These check- ups would assess if the senior citizen applying for the insurance policy is still “fit”.

The business of automobile insurance is a risk based enterprise. It is in the very nature of insurance companies to compensate for their possible losses upon insuring someone. Insurance cases among senior citizens and teenagers are based on the risks that their age brings, rather on their age alone.