How can adding a young driver to a policy affect premiums?

Adding a young driver to a policy typically increases premiums due to the statistical risks associated with younger drivers. Insurance companies analyze data that shows younger drivers, particularly those under the age of 25, tend to have higher accident rates compared to older, more experienced drivers. This heightened risk is attributed to factors such as inexperience, less familiarity with driving conditions, and a tendency towards riskier driving behavior. As a result, insurers adjust their premiums to reflect this increased likelihood of claims, leading to higher costs for policies that include young drivers.

In contrast, younger drivers are not typically associated with lower premiums, nor do they generally have lower mileage that might qualify for discounts. Additionally, the assumption that their presence on a policy would have no effect on premiums overlooks the substantial statistical evidence insurers use to evaluate risk.