You might probably be looking at the heading and wondering what age has to do with car insurance premiums.
Nonetheless, it’s an acknowledged and widely-embraced fact that age does affect a lot of situations, including auto insurance premiums.
For instance, a 22-year-old male driver might pay more for insurance1 than a man who’s ten years older.
What might be shocking is how substantial these premium swings can be, especially with age being just one of the numerous factors.
With that, here’s a comprehensive break down of the relationship between age and insurance premiums2.
Demystifying How Age Affects Car Insurance Premiums
First, it’s imperative to understand why insurance firms have the highest rates for very young and the elderly ones.
These two categories of individuals are considered at high risk.
Young drivers have been known to be reckless, ‘carefree youth’ and therefore more likely to get into accidents.
The old drivers, on the other hand, are careful that is beyond doubt. However, old age comes with physical limitations. For example, their vision or motor function might be impaired, which in turn might cause them to get into more accidents.
To break this down correctly, here’s a comprehensive guide to how car insurance companies determine your premiums by your age:
Car insurance for 17-year olds tends to be at their highest. It’s a straightforward fact -teenagers cause more accidents than any other age group globally.
These are first time drivers, inexperienced at handling complicated traffic patterns and terrible weather. Thus they’re more likely to make mistakes while behind the wheel.
The car insurance companies thus put high-interest rates for teens – they cost several thousand dollars and Rands or more. However, some plan providers offer age-specific discounts like good student records discounts for teens who do great at school.
Most insurance firms today are also keen on installing in the telematics, devices that help in monitoring driving in real-time. If you have an excellent record, the lender will reward you for good driving behaviour with premium car insurance discounts.
The 20s are when the insurance rates, even though they might still be high, start to drop. Why is this? Well, it’s basically because insurance firms know that as you get into your 20s, you’re more experienced on the road and you’ve likely developed better driving habits.
You might also have gained new levels of adult responsibility, like purchasing an estate or starting a career.
For these reasons, the Insurance Information Institute shows that statistically, you’re less likely to have an auto accident. You can also save more capital by bundling your proprietor insurance with your auto insurance, which offers you a discount from most insurance firms.
For new drivers, we also recommend reading our Car Insurance FAQ.
By thirty, you’re an empierced driver, and thus your insurance rates do stabilize.
By this time, most drivers have a spouse and family and will have traded in that classic GTI for a minivan or family SUV.
By trading in that sportier vehicle for a more modest style, you can save more capital upfront right away on your auto insurance. Moreover, with kids on board, most people tend to be more careful when driving than during their youthful years,
If you don’t own a telematics device by now, you should consider installing one so that you can get safe driving discounts from your insurer.
It would also be an incredible idea to check in with your insurance firm annually to ensure that you’re not missing out on other vital discounts that can help you save on cash.
The standard auto insurance rates drop again when you’re in your forties.
However, you might additionally discover better ways to save. If you have kids who are starting to drive, you’ll want to include them in your insurance policy, which will increase your premiums.
Nonetheless, by taking advantage of the good student discounts, away-at-college discounts and the numerous safe driving discounts, you can keep that increase to a minimum.
Another incredible way to save with your young drivers is to ensure that their first vehicle is reliable, the latest model, used rather than new, like a Honda Civic.
For maximum savings, however, you should consider keeping your vehicle options way from the middle-age crisis hot sports car and opt for a reliable and robust model.
When you’re in your 50s, you might have kids leaving your policy and getting their own.
If you’re still bundling home/condo insurance with your car insurance policy, and taking advantage of the numerous insurance company discounts, then it means that your annual premiums will have likely reached their lowest point.
Based on your insurance provider, you might qualify at this stage, for mature driver discounts based on how old you are. Some insurance firms today offer discounts to drivers aged 50 and above, thus making it convenient for you.
The Sixties and Above
When you’re in your 60s, you need to start thinking about downsizing and retirement. Even though your kids are out on their insurance policy, the average rates at this point can slowly increase again.
However, there are still ways you can implement to keep the rates as low as possible. One of these ways is to take a defensive driver course for mature drivers, like one provided by the AARP.
Courses like these generally cost about $20 to $50/ They’re also fantastic for about three years and can assist you in saving up to $90 on your auto insurance every year.
So, What’s Next?
You might be looking at your screen wondering what’s next?
Well, have no fear.
With the right insurance company, you can get the correct information, and even though the car insurance for first-time drivers under 25 may be pretty steep, you might get a deal that you can’t refuse.
Your vehicle also depreciates from the day you purchase it. Therefore, to compensate for this most auto insurance companies3 offer you rates that’ll also decrease monthly, regardless of your age. Your premiums will also automatically decrease when you get to 25.
There are also a few other things you can do to keep your car insurance rates from cleaning out your bank account. One of these is being a careful driver.
The fewer traffic violations you break, the better for you. People who have been involved in numerous accidents or flagged with DUI’s are put in the high-risk category – meaning they pay slightly higher insurance rates.
Another thing you can do is try to get a car in good condition and with the appropriate safety features. These include things like airbags and anti-lock brakes. Have your vehicle checked as per the recommended schedule and change your worn tires on time.
Do Auto Insurance Rates Go Up with Age?
No, it doesn’t. Insurance rates don’t go up once you reach the age of 65.
It’ll all depend on the state laws and insurance firm guidelines of auto insurance rate will be increased after you, or a specific driver turns older.
How Does Driving History Affect Auto Insurance Rates?
Well, a single speeding ticket might not affect your auto insurance rates as much if you have a clean driving record.
However, your car insurance rates might increase significantly after a speeding ticket if you have a history of accidents and driving violations.
Does Age Affect Car Insurance?
Yes, it is. Auto insurance firms take account of personal factors like age, gender and marital status when setting auto insurance rates.
Age is a significant factor for those under the age of 25 and for people who are over the retirement age, depending on the auto insurance company you choose.
What Factors Affect Your Insurance Premiums?
Various things impact your car insurance premiums (it, however, depends on the car insurance rates by state).
These include factors such as:
- Demographic factors – like gender, age, marital status, your home’s location, credit score, and your profession
- Car-related factors – such as the safety rating, car size, your vehicle’s age, and also the likelihood of theft
- Personal driving habits – like your driving history and activity
Navigating the world of car insurance doesn’t have to be a daunting experience.
By thinking about choosing the right car insurance firm to help you get favourable rates, and knowing just how much you should spend on your car, you can pay your premiums and still manage to save some cash for yourself.