How do teen drivers effect insurance companies in the long run? What is the long term effect on insuance companies due to teen drivers?
Total Comments: 1
Posted: Mon Jan 17, 2011 08:56 pm Post Subject:
The long term effect of teen drivers on insurance companies is usually a reasonable profit. Sure, younger drivers have less behind-the-wheel experience and have a larger percentage of accidents compared to experienced drivers, but insurance companies already know this and charge premiums accordingly. The majority of teen drivers do not have collision or other claims events, get a few speeding or other traffic citations along the way, and are very profitable for most insurance companies.
The minute they stop being profitable -- too many claims, citations (potential increased risk), etc -- the insurance company non-renews them, and their next policy is more expensive from another insurer.
Posted: Mon Jan 17, 2011 08:56 pm Post Subject:
The long term effect of teen drivers on insurance companies is usually a reasonable profit. Sure, younger drivers have less behind-the-wheel experience and have a larger percentage of accidents compared to experienced drivers, but insurance companies already know this and charge premiums accordingly. The majority of teen drivers do not have collision or other claims events, get a few speeding or other traffic citations along the way, and are very profitable for most insurance companies.
The minute they stop being profitable -- too many claims, citations (potential increased risk), etc -- the insurance company non-renews them, and their next policy is more expensive from another insurer.
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