Why young people pay more for their vehicle insurance

Colombia, June 2021. When insuring a vehicle, insurance companies usually ask their clients for various information in order to be able to carry out a correct appraisal of the policy. Information such as the model of the car or motorcycle, type of engine and displacement, car brand, is only part of everything that insurers take into account when dealing with users when quoting insurance.

In addition, companies have two other fundamental factors to define the price and characteristics of a policy, which are the age and experience of the driver who seeks to protect his vehicle.

In this sense, young people are the ones who pay the most when it comes to insuring their means of transport, because given their high accident rate, they are considered by insurance companies as risk drivers. Thus, depending on the size and characteristics of the market in which they are, the premiums for these drivers tend to triple the price with respect to insurance for those people who have more experience behind the wheel.

On the other hand, the high accident rate, that is, that young people are more likely to be involved in traffic accidents, is directly related to the inexperience of these drivers in driving a vehicle. Therefore, the more years of seniority added to the driver’s license, the lower the price that must be paid for insurance. This occurs, for example, with drivers who are between 15 and 20 years old at the wheel.

Many insurers rate people in their 40s and 50s as ideal drivers, especially if they are married with a family. When it comes to quoting a policy for clients in this segment, insurers understand that their driving behavior will be more responsible since they will make more cautious decisions.

Bad Practices: Will the insurance be cheaper if it is in the name of an adult?

For these reasons of age differences, it is very common for young drivers to choose to take out an insurance policy but whose ownership is in the name of an adult in order to lower costs. However, it is not what insurers recommend.

Although prices decrease the more age and experience the insured has, as we already know, age is not the only variable that influences the value of a premium. In this sense, it is important to take into account the claims history of the person who will have the insurance in her name, since their behavior as a driver will also impact the price quote. In this case, a young car owner could be harmed in the future if he is an adult with a poorly weighted history.

On the other hand, it should also be taken into account that the insurance contracts clearly state that the actual driver of the vehicle must be declared as the policy holder. Otherwise, the insurer could interpret that information was withheld in bad faith and invalidate the policy, so if you have an accident, the expenses will be fully borne by the driver involved.

The most convenient, as advised by 123Seguro, is to tell the truth. In this way, complicated situations will be avoided, such as not having insurance when driving on the street.