Nationwide Insurance Reports Drop in Policies Issued to Teens

Auto insurance provider Nationwide reported on Tuesday that teenage motorists are making up a slowly shrinking portion of its overall coverage portfolio.

The insurer said that in the past four years it has seen about a 7 percent decline in the share of policies covering drivers ages 15-19. That amounts to a decline in the tens of thousands.

To determine possible causes for the trend, Nationwide recently conducted an online, national survey of nearly 1,500 parents and found that some teenagers are having to wait to get their licenses because of high costs and bad economic conditions.

Aside from other high risk auto insurance groups like drivers with DUIs or other serious violations on record, teenagers are one of the most expensive demographics to insure. That’s because, according to the Centers for Disease Control and Prevention, 16- to 19-year-olds get into accidents at rate that is four times higher than that of older drivers.

A soon-to-be-released analysis of premiums from four California insurers conducted by quote-comparison generator OnlineAutoInsurance.com shows that the average base rate to insure a teenager in that state is around $5,300.

Nationwide’s national survey found slightly lower results.

“Our survey found that households with teen drivers shell out an average of nearly $3,100 each year to allow their teens to drive,” said the vice president of Auto Product & Pricing, Larry Thursby.

While noting that price may not be the only reason for the decline, Thursby said “the cost of having a teen driver is a major one.”

“Of all the parental concerns associated with the costs of teen driving, auto insurance tops the list with 66 percent of parents noting this as a top concern,” according to a Nationwide press release announcing the results of the survey. “Also, 55 percent of parents noted increasing insurance costs if their teen gets into an accident as a top concern.”

 

About John Pirro
John Pirro is a licensed fire and casualty insurance agent specializing in various aspects of the auto insurance industry. He worked in the auto body repair industry before taking a reporting position at Online Auto Insurance News.

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