Car Insurance Rates Still High Despite Fewer Teenage Drivers

teenage drivers

A recent study by the Highway Loss Data Institute (HLDI) reveals that the number of teenage drivers have been on a steady decline for years. The study cites the depressed economy as the culprit for the trend, although some suspect that tougher licensing rules, easier communication through social media and generous parents willing to taxi their children may be contributing to the situation.

“It looks like teens just can’t afford to drive,” says HLDI Vice President Matt Moore in a statement. “Paying for their own cars, gas and insurance is hard if they can’t find a job. At the same time, kids who count on Mom and Dad to help them also may be out of luck if their parents have been affected by the recession.”

However, despite the reduced number of teen drivers on the road, the risk of teenage driver-related accidents and the cost of car insurance rates for younger individuals aren’t necessarily dropping as a result.

Trends Among Teenage Drivers

Using data on unemployment statistics, HLDI found that teens were hit harder by joblessness than other segments of the population. The October 2013 HLDI report uncovered that from 2006 to 2010, 11 percent of teens who were actively seeking employment could not find jobs, compared to 5 percent for adult workers.

The organization found a direct correlation between the rise in unemployment and the drop in teen driving, estimating that 79 percent of the drop in teenage drivers is directly related to a lack of finances.

Why Teen Car Insurance Rates are Still Expensive

With fewer teens driving, it would seem logical that car insurance rates would drop for that age group. Unfortunately, this not the case as adolescents without a driver’s license tend to get rides not only from parents, but also from other teenage drivers.

According to statistics published by the Children’s Hospital of Philadelphia, two or more teen passengers can triple the risk of an accident for a teen driver. For 71 percent of male teens involved in distracted-driving crashes, the passenger was found to be the source of the distraction. For females, this rate was at 47 percent.

Even without passenger distraction, teenage drivers are more likely to engage in risky driving behaviors, like speeding or listening to loud music, when they have peer passengers in the cabin thus driving car insurance for teenagers upward. Although most states prohibit teens from carrying peer passengers, it’s still a common practice that’s hard for police to enforce.

As long as teens continue to practice these high-risk driving behaviors, they will continue to see high car insurance rates and a greater threat of car accidents.

(Photo: State Farm)