Young Drivers Pay Fines Rather than Buy Car Insurance

Published: Thu 19 Nov 2009

Thomas Kristoffersen - Staff Writer

A new study reveals that pricey car insurance rates for drivers under the age of 25 make it cheaper for young drivers to pay the fines associated with driving uninsured than to purchase coverage. This trend is especially pronounced for young male drivers, who have the highest auto insurance rates of all demographic groups.

Experts blame auto insurance companies for the predicament, saying that insurers refuse to work with inexperienced drivers and instead drive rates up to unaffordable levels. A young male driver is already prohibitively expensive to insure, and when you add common risk factors such as sports cars, DUIs, tickets, and past accidents, a young driver becomes virtually uninsurable.

Given this dilemma, more and more young drivers are running the risk of tickets and fines rather than paying for auto insurance coverage. In most states, the first citation for driving uninsured is only a few hundred dollars, a fraction of the annual cost of car insurance premiums. However, if a young driver has an accident without proper insurance coverage, the financial consequences could be disastrous.

The cost of lawsuits, car repairs, medical bills, and other expenses could easily ruin an uninsured young driver's future. What's more, the fines associated with driving uninsured or underinsured are the least of young drivers' problems. Usually, the state will suspend a driver's license until he or she can provide proof of adequate auto insurance coverage. Driving on a suspended license might lead to jail time, the impounding of the driver's vehicle, and/or permanent revocation of the driver's license.

Insurance companies argue that young drivers, particularly males, present too large of a claims risk to insure affordably. For one, young, male drivers get into accidents more frequently than any other drivers. They also tend to have more severe accidents than other drivers. Additionally, young males tend to drive more frequently and more aggressively than female drivers of the same age. Insurers argue that theses significant risks justify the high cost of insuring a young driver.

Some experts propose a compromise to help make coverage more affordable to young drivers. The proposal that has received the most attention involves limiting the hours during which a young policyholder can drive. Doing so would then limit the risk of an accident, thereby helping to minimize premiums. For example, some proponents of such a plan advocate barring young drivers from operating a vehicle between the hours of 11 PM and 5 AM. If young drivers agree to stay off the road during these hours, the insurer could then offer them more affordable rates.