As if the fact that the average teen driver’s insurance rate is roughly four times higher than the average adult rate isn’t bad enough, it turns out if you have a hoard of boys, you’re screwed. Even when all other factors are equal, adding a teen girl to your policy will raise your rate about 67 percent, while adding a teen boy will raise your rate a wallet-obliterating 92 percent! If your next thought is: whattttttt?!? This is ‘merica! How can they disdiscriminate like that? (I know I did, sitting over here with my 3 boys.) You’ll be glad to know there is, like, a totally legit reason. Ready for this?
Because there is no law that says they can’t. It’s like the opposite of because I said so.
Back in 1964 we did sign into law a little thing called the civil rights act of 1964 that prohibits discrimination based on race, color, gender, religion, sexual orientation, or nation origin in employment and public accommodations, but it doesn’t apply to car insurance. Why?
Car insurance doesn’t really fall into the category “public accommodations.”
To understand why car insurance companies can legally give parents of teen boys the shaft monetarily you have to look at why the civil rights act of 1964 was passed, and what it aimed to do. That is to end racial segregation and unfair employment practices in an effort to take the good ole U.S of A one step closer to equality. These public accommodations are defined as establishments that provide goods, services, or programs open to the public. Things like hotels, banks, grocery stores, and theaters. Car insurance is not explicitly named, nor is it an accommodation, so no equality for you.
Alright, so why don’t all these angry parents of redunkulously expensive-to-insure teens get all up in arms and get democratic on their asses—make them say so? They have. The problem is that the civil rights act of 1964 is a federally enforced law, and car insurance is regulated on a state level thanks to the McCarran-Ferguson Act of 1945. And, well, we all know how well it goes when the federal government tries to tell state’s how to regulate.
This means that the decision to ban gender or age-based pricing for car insurance is left to the state. In some states that has happened including Hawaii, North Carolina, Maryland, Massachusetts, Michigan, Montana, and Pennsylvania. Only three of these (Hawaii, North Carolina, Massachusetts) also forbid the use of age in factoring rates. You would think the state count would be higher than that, but it turns out statistics trump discrimination.
The reason gender-based auto insurance pricing is allowed in so many states comes down to the data. Statistically, young drivers and males get in more accidents. This is the same reason car insurance companies can get away with changing rates based on zip code, credit score, marital status, education, and many more things that have jack to do with your ability to drive. The numbers support the insurance companies—even if those numbers ignore the fact that not all male drivers are aggressive and not all teen drivers drive recklessly.
Alright, now that we’ve established why your wallet hurts, what can you do about it? I mean, aside from starting an equal rights movement in your state (which you could consider, because 92 percent.)
Ways to lower the cost of insuring your teen:
-Cash in on good grades. Most of the big insurance companies today offer a good-grades discount for those under the age of 25, so if your teen is pulling in better than B’s, it’s worth asking your provider if they offer this one.
-Make them take a course. Driving courses can often qualify even adults for a rate discount, but eligible programs vary by company (some even offer their own course), so be sure to check the requirements for this discount if it’s offered.
-Plan that ride. The type of car you drive does affect your rate. For example, more expensive cars cost more to insure, so choosing a used and economical car for your teen is advised. The cheapest vehicles to insure are: mid-sized, lower in horse power, hard top, not considered “sport,” have anti-theft options, and get good safety ratings. Anti-theft often comes with an additional actual discount too. Contrary to popular belief, color plays no part in insurance calculations.
-Look for multi-policy discounts. Having one company handle multiple policy types can come with a discount, so even if you don’t own a home to insure, play around with the numbers. You may find adding something inexpensive like renter’s insurance saves you more than it costs you.
-Ask about driver tracking. Some companies have begun to use your actual driving habits to factor your rates. This involves a small device that monitors your driving for a short while to see how fast you brake, how often you speed, how far and how often you drive, when you drive, etc. If certain benchmarks are met discounts as high as 30% can be your reward (just make sure your teen knows they’re being tracked).
Luckily, car insurance rates do decrease (male or female) with age and by 18 your pocket book will hurt far less than it did at 16, but in the meantime, hopefully our tips have helped.