I n b rief
P.9
Car Insurance explained: not making the most money?
Why do insurance firms charge teens so much? We’re
C
Rahmon Agbaje
ar Insurance explained:
Why do insurance firms
charge teens so much?
We’re not making the most
money?
It’s common knowledge that
the car industry is a very
daunting place for teenagers
these days, especially
with the extortionate car
insurance quotes that
practically every young
person has to face. Car
insurance is there to cover
any driver who has been
involved in an accident and
needs to make a claim –
everybody needs to have it
as it keeps our roads safer.
The simple reason why it
is so much more expensive
is that young people make
more insurance claims
than any other age group
– mainly due to their
inexperience. Young males
are 10 times more likely to
be killed or injured than a
driver aged over 35 (sorry
to scare you). The typical
insurance claim by a young
male adds up to around
£4,500, compared with
£1,200 when the driver is
demand for car insurance
is not very responsive to
changes in price. This
is because it is illegal
to drive without it so if
teenagers opt to buy a
car they must buy car
insurance or they will
face severe consequences
– therefore people must
buy car insurance (it’s as
essential as petrol, both
are needed to drive a car
these days ). Insurance
firms take advantage of
the complicated structure
of this industry and
middle-aged, whether male
use evidence which shows
or female (according to a
teenagers are the most risky
Guardian report).
drivers to increase the price
leve