Auto Insurance That Breaks The Bank Why do young people pay more for insurance? T.J.
Thesis Young adolescence under the age of twenty-five are discriminated against when purchasing auto insurance. Young males are stereotyped into one main category…HIGH RISK thus the high insurance rates. IS IT FAIR?
Justification I chose this as a topic, because as a recent purchaser of auto insurance I know first hand how expensive insurance is. I as well as many others feel outraged about this ongoing problem! I want to understand why young teens insurance rates are so high.
Comparing Cost Insurance price comparisons between provinces are difficult to make because of the differences in insurance legislation, highway and traffic legislation, traffic density, traffic enforcement, urban/rural ratios, and average annual mileage driven. Comparisons are rarely made between Thunder Bay, Toronto, and Peterborough for similar reasons. Comparisons made between provinces only increase the number and scope of these factors. http://www.ibc.ca/home_on_private.asp
Cost Factors What type of car do you drive? How much will it cost to repair or replace your car in case of a total loss does have an influence on the premium you are expected to pay. The more expensive cars are usually more expensive to insure. Where do you live? Because collisions are more likely to happen where there is a high volume of traffic, people who live in a urban area are more likely to be involved in a collision (70% of all collisions occur in urban zones)
Cost Factors Continued How is your driving record? Drivers who have demonstrated poor driving behaviour by collecting moving violations (speeding, dangerous driving fines) are also more likely to be involved in a collision and the premiums reflects the added risk factor.
Cost Of Repairing or Replacing Vehicles In the past 10 years, the cost of repairing a car has risen almost 8%, while the cost of replacing vehicles damaged in car accidents is up by more than 30%. Insurance companies suggest this is a large factor in calculating the cost of auto insurance.
Drivers Education Can vs On. Source: Statistics Canada, CANSIM, table 203-0007
Insurance Comparison #1 Sample A 18 years old with driver's education owns a 1995 Honda Civic 4 door clean record, no tickets Insurance cost per year: $6,376 Sample B 18 years old with driver's education owns a 1995 Honda Civic 4 door clean record, no tickets Insurance cost per year: $3,356 Both cases below were calculated with the same information and location of residence. (Toronto, On.) $6376.00 - $3356.00 = $3020.00
Insurance Comparison #2 17 year old male Driver education Clean record, no tickets Residing in Eganville, On. Using parents insurance company (discount allotted) Costs with Collision 1998 Dodge Ram - $3233 1998 Chrysler Neon - $3756 1997 Chev Cavalier (4d) - $3641 1999 Vw Beetle GLS - $3412 Collision costs approximately between 900-1100 dollars depending on the vehicle The mean cost including collision for this male is aprox. $ 3510.50
Teen Driving Stats More males are in auto accidents than females female teen death rates in automobiles are higher than older females 16 and 17 year olds are viewed as high risk drivers After 10:00pm & 6:00am are the leading times for teen accidents
Reported Crashes By Age The data is right Skewed, which tells us that younger Drivers have a higher crash rating.
Official Crash Rates The data is left skewed, which tells us that younger drivers on average travel with a great number of passengers in a vehicle.
Time & Speed Cities that have imposed curfews on teenagers have seen total crashes reduced by 23 percent. 87% of teens admit to speeding
A Recent Survey According to the 2003 Liberty Mutual/SADD Teen Driving survey More Driving – Teen drivers average 44 percent more hours behind the wheel each week during the summer (23.6 hours) than during the school year (16.4 hours). Piling-In – 23 percent of teen drivers are more likely to drive with three or more teens in the car in the summer, compared to 6 percent of teen drivers who are more likely to do so during the school year; Later Nights – 72 percent of all teens report they stay out later during the summer than the school year. Additionally, 47 percent of teen drivers are more likely to drive late at night during the summer, compared to 6 percent of teen drivers who are more likely to drive late at night during the school year; and, Heavy Eyelids – 24 percent of teen drivers are more likely to drive when tired or sleepy during the summer, compared to 9 percent of teen drivers who are more likely to drive fatigued during the school year.
SADD Statistics 62 percent of high school drivers say they talk on a cell phone while driving, and approximately half of both high school teens who dont yet drive (52 percent) and middle school students (47 percent) say they will. 67 percent of high school drivers say they speed. Interestingly, most high school teens who dont yet drive (65 percent) and middle school students (79 percent) say they wont. 33 percent of high school drivers say they dont wear their safety belts. High school teens who dont yet drive (28 percent) and middle school students (20 percent) are less likely to say they wont.
SADD Statistics Cont… Nine out of ten (89 percent) teens consider themselves "safe" drivers. Yet, many teens dont consider risky behaviours dangerous: 27 percent of all high school students and 33 percent of middle school students think speeding is safe 25 percent of all high school students and 29 percent of middle school students think driving without a safety belt is safe 24 percent of all high school students and 32 percent of middle school students think driving while talking on a cell phone is safe
Mean Of Accident Ages Mean of Grouped Data: Σ(F*M) ___________________________ Σ F (207090177+263465000+253935000+164220000+103555000) ____________________________________________________________________________________________________________________________________________________________________ (7020006+6670000+5130000+2760000+1490000) =43.0110498 The average age of a driver being in an accident is 43. Continuation From Previous Slide Continued on nest page ->
Mode Age In Accidents 25-34 Age group is the mode age The data suggest that anyone can be in an accident, but ages 25+ show greater risk. The mean suggest it is the person who drives longer, is in the greatest number of accidents. A possible connection to careless habits.
What Are Your Chances? The probability that less than or equal to 180 students out of 500 in our school will be in an accident is: 42.86% P= 0.38 Q=1-0.38=0.62 N=500 K= less or equal to 180 (found using probability formula)
Take Action To Lower Insurance Rates Raise your deductible Combine home & car insurance and insure more than one car with the same company Your insurance company may offer a discount for installation of an anti-theft system Make your next car one with a lower-cost insurance rating
Analysis My research has shown that male drivers have high insurance do to high crash and fatality numbers Insurance companies view young males as high risk drivers who cause high speed fatal crashes Females are viewed as high risk but it is suggested that they only have small fender benders (non fatal crashes) Statistics are used to calculate insurance rates, which penalizes the good drivers (the stats are against young drivers) Insurance costs also depend on your address and driving record Young males insurance is usually between 25-50% greater costs than the same aged female It may not be fair, but insurance companies calculate all insurance the same way.