Question

Which of the following is not a reason young drivers have higher auto insurance premiums than older drivers?
a.
A very high percentage of teen deaths have been the result of motor vehicle crashes.
b.
A very high percentage of teenage drivers have had an accident in the first year of receiving a license.
c.
Accidents involving teenage drivers have resulted in billions of dollars of medical expenses and property damage in recent years.
d.
Accidents involving teenage drivers have required additional investigation, the cost of which is passed on to the driver in the form of a higher premium.

Answer 1

d.

Premiums are driven by actuarial factors — higher crash frequency and severity and resulting claim costs (medical, repair, liability). Extra investigation costs are not a primary reason insurers charge higher rates for teenage drivers.