When calculating a policy quote, car insurers will ask you about your zip code, driving history, credit score, and age. First-time insurance customers may find it intrusive, but it is standard practice. Insurers obtain this information to determine the risk associated with insuring you. The older you are, the more likely you are to be involved in a collision that requires them to pay claims. Therefore, all other things equal, age is a critical factor in determining the cost of car insurance.
The insurance cost estimator is a great way to see if there are better rates. It leveled the field a little too. Getting an auto insurance quote online is a great way to get an idea of your rates. Are you seeking the best car insurance policy, you should be able to ask any company questions you like. The cost of premiums fluctuates throughout the years, so do the best tactics for saving at each age. However, on average, buying car insurance in middle age is the best time to save.
What Factors Influence Car Insurance Rates?
Variable insurance plan prices can fluctuate based on different factors, even things you may never think about, like your credit score. A driver’s age has a significant impact, but both sexes are not treated equally. You will see that the average car insurance rate varies by gender and age. Check out the average auto insurance rates for drivers like you.
Is Age A Factor In Car Insurance?
Sara Routhier, Director of Outreach at BuyAutoInsurance.com, reveals that insurance payouts typically vary based on the policyholder’s age. For example, in the United States, teens are more likely to die from accidents than drivers in their 70s.
A complex array of factors determines an insurance company’s premiums: how likely will a claim be filed? The higher the premium, the more likely there is to be risk. Because of this, insurance rates and coverage amounts will differ for high-risk drivers.
The insurance industry analyzes demographic data, compares it to claims paid to similar demographic data, and calculates risk. Good news is that persons who are deemed high-risk do no worse when it comes to their car insurance, and the really bad news is that if you take the effort to reduce your perceived danger, no matter your age, you can reduce your premium rate.
Insurance Rates For 16-19-Year-Olds Are Highest.
Most teen drivers have an accident, so their insurance rates are high. Unfortunately, insurance is always based on risk, and teens are more likely to drive recklessly. Approximately eight teenage drivers die in car accidents each day, according to the statistics for teen drivers in 2013. The estimated death toll of drivers aged 16 to 20 in road accidents is 8 deaths per day. Some 10% of the deaths are due to drivers being distracted by digital devices and a third admit to sending text messages or e-mails while driving. The rate of fatalities among teen drivers is estimated to be 47% deaths per day.
RESEARCH SHOW MALE TEEN DRIVERS PAY 20% MORE ON AVERAGE FOR CAR INSURANCE THAN FEMALE TEEN DRIVERS.
There are ways to save money for teens, even though their insurance premiums are high. If you or your teen have a GPA of above 3.0, send your high school transcript to your insurance company for an education discount. It is also possible to save by installing telematic devices in your car, which are not exclusive to teens. Teenagers are penalized because they are a dangerous group. Insurers can see if you are a safe driver if you install a telematics device. Insurers charge you by the mile for these devices. Depending on your driving style, discounts can vary from 10% to 40%. Telematics offers much bigger discounts to teens than to other groups.
Age 20-29 Car Insurance
On average, your insurance premium will drop by 20% as your experience and driving hours make you safer. Due to fewer accidents among drivers in their twenties, their premiums continue the trend from the data above by declining every year. As a result, the average insurance rate for a 29-year-old is half that of a 20-year-old, showing that the best way to lower your insurance premium is to gain experience. The declining annual rates will be reversed if the additional accidents don’t lead to bad driving records.
A twenties driver can have difficulty saving money on annual premiums because they already save compared to their teens. However, at this age, many are moving out and living independently. Drivers can bundle homeowners’ and renters’ insurance with their car insurance coverage for the first time, saving up to $100 each year. Those at this age should also shop for car insurance, as the company offering the lowest premium age, 20, may no longer be the best at 25.
Age 30-39 Car Insurance
Insurers see the thirties as just continuations of twenties, providing coverage to 29-year-olds no differently than 39-year-olds. Drivers in their 30s are lucky because they get less than .5% of a discount per year. This means they are in the cheapest period of their driving life. Nonetheless, it becomes harder to save money on premiums. As the data below shows, year-over-year changes are insignificant throughout the 30s. Most people experience life as a ‘sensible adult’ in their thirties. As a result, many factors can influence your car insurance, so bundling multiple insurances together makes sense.
Your vehicle choice will also shape insurance premiums. If you plan to have children, now is the time to replace that sports car with a family vehicle. Your children and your insurer will both appreciate it. It’s advised to avoid insurance claims in your thirties when possible. It would help to consider the long-term rise in insurance premiums against the short-term cash from a payout. By avoiding insurance claims, you can prevent at-fault accidents as well.
Age 40-59 Car Insurance
The forties and fifties are a bad time to drive. For drivers without children, the average premium for a married couple is $1,116 per year, a significant decrease from the low rates from your thirties. Having young drivers on your account mitigates your lowering premiums by this age. As teen drivers face the same risks, insurance premiums follow almost full circle. According to TheZebra, adding two teenage drivers to your car insurance will raise your premiums by $3,600.
How To Prevent Unaffordable Insurance?
One of the best is to add your youthful driver to your insurance rather than placing them on their own. Then, the insurance company will assume that if your teen has gone off to college, they will use the car less and present less risk. This will balance out the teen’s risk against your safer demographic group.
Age 60-69 Car Insurance
With your children moving out, getting their cars, and car insurance policies, car insurance premiums can decrease even more as you reach your forties and fifties. Your insurer should be notified if your child has left the house and no longer uses your car regularly. Your child’s car insurance company will need to adjust their premium according to their new zip code if they have left home. The children can remain on your insurance indefinitely if they live with you – there’s no cut-off age like healthcare.
Insurance costs for 65-year-olds are $1,737, a slight rise from $1,737 in the forties and fifties, but lower than those for 75-year-olds and 85-year-olds ($2,037 and $2,416). When you retire and purchase a boat or condo, bundling insurance will save you money on coverage. Adding extra lines of insurance will lower prices due to economies of scale. To reduce your insurance premium, you need to focus on what you can do to reduce your age. Your car insurance premium will be declined regardless of age if you drive safely, don’t use your insurance for minor repairs, and install safety devices.
When you know the factors that affect insurance premiums, you can reduce them. In addition, your bonus can be influenced by your demographic, so you can see how to identify with that group or distance yourself from it. For instance, telematics may be very cost-effective for teenage drivers but not so much for older drivers.
Insurers are very interested in how you see them, so knowing your market puts much power in your hands. If you see this information, you can change the risk you pose to them, resulting in a higher profit. You can get a better quote for auto insurance when you know what coverage level you need ahead of time when you’re searching for policies. You may pay different insurance rates if you’re in different age brackets and own the same car.