In the field of car insurance the riskiest policy holders are the teenagers. Their age is one of the main reasons why they are seen as immature, inexperienced and even a danger to other motorists and pedestrians. Their immaturity is based on statistical data which show that most of car accidents that are related to decision making dilemma are teenagers.
The decision making faculty at their age bracket is seen as inadequate and even unready for the hustles in the busy streets. Their young age also imply a lack of experience as compared to older drivers. Their limited driving experience is seen as a hindrance for more effective driving. They are assessed as the group of drivers which are more likely to cause accidents in the streets due to the factors of immaturity and inexperience. If teenagers will apply for a car insurance policy no matter what type, it is more likely that they have to pay higher premium rates as compared to older policy holders.
No one can cheat the age of the policy holder when applying for a car insurance policy. But there are ways wherein insurance policies of students can be decreased. There are three main tips in getting cheaper car insurance for teenagers, avail student discounts, maintain good driving record, and choose the type of car to be insured with the teenager.
Most insurance companies are offering student discounts if the teenager has high grades in his academic record. The insurance companies use the class records of the teenage policy holders to approximate their sense of responsibility and maturity. There are many car insurance companies that also give incentives to early paid car insurance policies. Some companies also had out discounts if payments are regularly paid, for example in a daily basis.
The insurance premium rates that companies set for teenage policy holders are based on a merit and demerit system. Good driving record for a period of time will increase the probability that the premium rates of the insurance policies will be decreased. The decrease is due to the probability that the risk index is lessened. It is the nature of premium rates, that if the company is taking lesser risks in insuring a policy holder the premium will decrease proportionately.
The model of car used by the teenage policy holder can also affect the premium rate of the policy. It is ideal to let teenage policy holders drive old and fully paid cars. Fully paid cars free policy holders from the gap between the insurance deductible and the actual value of the car. A fully paid car is not required to go under constant depreciation assessment. The old models of cars are seen as strongly engineered models and are not that easy to wreck. The companies' probability of having to compensate for a totaled car is decreased therefore the insurance premium rate is also decreased.