Your teenager might be old enough to drive now, but are you allowing him or her to do it? A study by Nationwide Mutual Insurance Co. finds that more and more parents are delaying letting their teenagers drive. One of the reasons why is directly due to the cost of car insurance.
Nationwide Mutual Insurance Company is the fourth-largest insurance company that sells personal automobile insurance policies to consumers. The insurance company recently conducted a survey and asked parents some about questions regarding driving and their teenagers. The results showed that more parents are choosing to delay when their teenagers start driving.
There are many reasons why parents are holding back on allowing their teenagers to take the keys and drive the family vehicle. According to the study, almost one in three parents said that they choose to delay allowing their teen to drive because of costs. When you add a teenager to your car insurance policy, the premium can increase anywhere from 50% to 100%. Many parents are finding that increase in cost of insurance to be more than their budget can handle.
In addition to increased insurance costs, there are other expenses that come when your teenager starts driving. According to Nationwide Insurance, American households that have teen drivers pay an average of $3,100 each year for expenses related to insurance as well as gas. Unemployment also makes it more difficult for parents to be able to afford to allow their teens to start driving. Many parents are requiring their teenagers to get a job in order to help contribute to the expenses that are related to their driving privileges.
Does your teenager drive yet? If not, then you are among a growing group of parents who are delaying this “right of passage”. In 1999, around 37% of sixteen year olds were licensed drivers. In 2009 the percentage dropped to about 31%, according to the Federal Highway Administration.
This trend gives some advantage to insurance companies that sell automobile insurance. Drivers who are younger, or who are new to driving, tend to get into more accidents than do older, more seasoned, drivers. Having more mature drivers, and fewer new drivers would reduce the expenses of an insurance company while increasing their profits, simply because they would have less accident claims to pay out.
Image by Abe Novy on Flickr