Why are Students Auto Insurance So High?

Why are Students Auto-Insurance so High?

Many parents and new students drivers will be shocked to find out how expensive it is students to get auto-insurance coverage. Parents include students on their auto-insurance plan will suddenly see a significantly jump in their premiums. Sometimes students will attempt to save money by purchasing a cheaper insurance plan that has less coverage. This can be a grave mistake as students tend to get in more accidents than any other age group.

There are multiple reasons that cause insurance companies to put students in the high risk category.

Some families will try a strategy known as ‘Fronting’ which is to put the student’s main car under a different individual’s name. Although this will earn you a cheaper policy in the short run and on paper, it is highly illegal and if you are caught, you will be facing criminal charges. Often families as well as young teenager drives will wonder what makes their insurance so damn expensive.  Lets talk about the factors that make student auto insurance so high.

Students are amateur drivers

The moment that students receive their driver’s license, they are required to have insurance to continue driving. However at this point, students are relatively inexperienced with driving and normally have only driven on familiar roads. There are many signs and tactics that students are not aware of. This is perceived as a higher risk because inexperience on unfamiliar students often causes students to panic.  As students gradually age and become more experienced with driving, they will see their insurance bill go down year after year. According to AAA, teenager drivers are 50% more likely to crash their car in the first month of driving compared to the first year in driving.

Student Accidents

While driving on the road, you may suddenly notice a student driving a nice sport car zoom fast by you. Teenage drivers statistically are more prone to speeding and other types of reckless driving. Many students also have a tendency to want to race while driving their brand new sports car. Other students might ignore stop signs and speeding bumps. This might seem like fun and games but insurance companies transfer the risks through higher premiums. According to statistics one in five drivers will have an accident in their first year while on the road and approximately 26% of road accidents involve at least one motorist aged between 17 and 24.

Depends on the car

Another important factor to consider is what car the student is driving. Newer cars are more insurance unfriendly and will cause rates to go up. Often parents make the mistake of purchasing a brand new car for their teenager drivers and expect the same interest rate as an old family car. This is not true. An older car will often be less in insurance. Japanese cars auto-insurance for students typically costs less than European cars. In some cases if the car is too old, students could save money by only getting one way insurance. If students get in an accident, they can cover the other person’s car and leave their car uncovered.


Some insurance companies will offer students, who have an average of B or above, a discount on their auto-insurance. Companies are willing to charge students who are more reliable less. Students who get good grades often will stay out of trouble and drive safely. Now isn’t that another reason to get better grades?

These factors typically affect all students’ drivers under the age of 25. As students age, they will slowly see their insurance get less expensive every year until age 25 where their insurance goes down to normal. Another important thing for students is to avoid accidents and speeding at all costs. These points can stay on your record and hurt your insurance for many years.

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