Why Are Student Driver Car Insurance Rates So Expensive
Reader's Question:
I am trying to get my daughter car insurance under her name but it is much expensive than what I pay. Why are student car insurance rates so expensive?
Linda
Chicago, IL
You would think that since you are younger, your insurance premiums will be much cheaper. Quite the opposite. Student car insurance rates are much more expensive than other policies because of the hazards that combined youth and inexperience brings.
While insurance companies are in business to protect policy holders in the event of accidents, they actually detest it when people make claims, especially those carrying five-figure price tags. Unfortunately, it seems that student drivers accounts for a large percentage of drivers who rack up one violation after another or worse, figure into some of the most serious car crashes that create damage to life and property. As such, some insurance companies opt to defer from offering such a policy, because of its volatile nature.
It is because of the imminent danger and the limited options that student car insurance rates are so high. Think of it as a way for insurance companies to prepare themselves for people queuing up to get payments for a dented fender, whiplash or even the loss of a loved one.
However, there are also insurance brokers who use this lack of options to generate cash for themselves. Before buying a student car insurance policy, make sure that it is either the cheapest or the one that offers maximum coverage. It is ultimately better to invest on higher student car insurance rates that takes care of you than scrimp on something that does not provide you with that much-needed sense of security.