An Insurance Agency Method for Insuring Teens’ Cars
PRICING CHALLENGE FOR INSURING TEEN CARS
- The accident rate of sixteen year olds - above left - is 27 per million miles
- This rate is nearly eight time the adult rates - middle of the chart - of about 3.5 accidents per million miles.
MEETING THIS CHALLENGE WITH THE TEEN MILES METHOD
- Our method is for insurance agents
- Who are frustrated by having only high premium products to offer for teens' cars.
- Our method would insure these cars with one month policies at cents per mile rates
- Which would let teens control premiums by limiting driving.
- At startup teens would pay a deposit premium for 1,000 insurance miles and policy and expense fees.
- At renewals teens would pay for "refill" miles to replace miles driven (earned) since last month's odometer reading and also pay policy and reading fees.