How Does Age Affect Auto Insurance Rates?
Age is one of the major factors that insurance companies check when you are requesting a quote for your car insurance.
An auto insurance company looks at a driver’s age to generally measure driving experience and accident risk.
Insurers know that if a driver has more years behind the wheel, they have more driving experience and it is less likely that the driver will get into an accident and submit reimbursement claims.
This means that the insurance company will incur fewer costs to have the driver insured and in return they offer a lower priced policy.
Average Auto Insurance Rate According To Age
In general, the youngest drivers pay the most for insurance while middle-aged drivers pay the least.
Car insurance costs decrease and reach the lowest rate for people in their 50s and may increase when they are in their 60s and above.
As a rule of thumb, insurance premiums are the highest for teen and young adult drivers aged 16 to 24. Average costs range from around $7,000 per year at age 16 to around $3,000 per year at age 21.
At age 25, average insurance rates rapidly decrease to around $2,000 per year and continue to decline until age 55 having the best rates.
At age 55, insurance costs are around $1,500 per year – reaching the lowest cost – then slightly increase to around $1,700 at age 65 and around $2,000 at age 85.
Is your age high-risk?
According to the Insurance Institute for Highway Safety, young drivers aged 16 – 19 are three times more likely to get involved in a car accident. This is why young drivers pay more. The insurance company thinks that they are more prone to incidents and accidents so they charge higher rates for this age group.
On the other hand, mature drivers in their mid-30s to late 50s acquired better driving skills and road mastery leading to lower accident rates.
Moreover, once a driver reaches the age of 60, premium rates slowly go up because aging comes into play. Drivers above 60 years old generally have poorer eyesight and slower driving reflexes than they once had and that has an impact on their driving ability.
So the higher the risk for you to get involved in an accident according to your age, the more expensive the insurance rates will be.
How Do You Save Money on Car Insurance?
There are a number of effective ways for young, middle-aged, and older drivers alike to save more money on auto insurance.
Shopping around is the best strategy to save money on insurance costs. There are insurance companies that give better prices for young drivers compared to others.
Some companies are found to be the most affordable insurer for young drivers. All you have to do is ask around and get quotes from at least three companies until you find the best deal.
You can also compare prices online as most large insurers allow you to start a quote on their website.
Another way to save money is by checking with insurance companies to see if there are any available promotions or discounts.
Teenagers may get up to 10% off by maintaining good grades or taking certified driver’s education classes. Teens and young adults also benefit by being on their parent’s policy. Adding a teen or young adult to a current parental policy generally raises the policy rates less than if the teen or young adult were on a policy alone.
Seniors may also get discounts by taking defensive driving classes.
There are also companies offering “55 and Retired” promos where drivers aged 55 and above who are retired instantly qualify for a 10% discount.
The bottom line is auto insurance rates can be expensive for some age groups, however it’s something we all need. You just need to have money-saving strategies to get the lowest quotes and best deals.