Car insurance companies consider a driver’s age when determining annual auto insurance rates. Overall, two age groups are generally subject to higher auto insurance rates: younger drivers and elderly drivers. There are many reasons why younger and older drivers are considered a higher risk for auto accidents: immaturity, poor decision-making skills, decreased concentration, slow reaction times, and increased distractions.
In addition to age, most car insurance companies also consider an individual’s gender, marital status, location, vehicle type, number of miles driven annually, driving history, and history of insurance claims. An understanding of the elements that insurance companies pay attention to when making a decision about the cost of coverage can be important in identifying ways to decrease the cost of coverage. While some of these factors, like age, are not under a driver’s control, others are, and there are eight strategies for getting lower auto insurance rates.
Why Is Age a Factor?
Age is one of the more influential items that auto insurance companies take into consideration when determining auto insurance rates. A driver’s age has shown to have a direct influence on driving safety; both younger and older drivers are considered high risk. Typically, drivers between the age of 25 and 65 are considered the safest.
Younger drivers are the age group with the highest risk for accidents and traffic violations. The immaturity of teens makes them particularly dangerous behind the wheel; they are more likely to be distracted while driving and lack concentration on the road. Men in their teens and early twenties are the most likely to drive recklessly and take dangerous risks while behind the wheel. Younger drivers are also more likely to be inexperienced, which is considered the top cause of teenage crashes.
National studies on driving and statistics on traffic accidents and fatalities confirm that young people are more dangerous drivers. Teenaged drivers have been proven to be are more likely to cause car accidents, more likely to be involved in vehicle fatalities, and involved in more single-car crashes than any other age group.
Older drivers, too, are considered to be high-risk drivers. As drivers age, their judgment, eyesight, and hand-eye coordination worsens, which can cause traffic accidents and injuries. Elderly drivers, which are those over the age of 65, get in trouble on the road by making poor left-hand turns, swerving, and having slower reactions to unexpected situations on the road.
Auto insurance companies typically offer the highest rates to 16-year olds; rates may slowly decrease as a young driver ages, but most drivers will not see significant drops in auto insurance premiums until age 25. Insurance companies may begin imposing higher insurance rates on drivers around age 65 or 70.
Other Factors That Effect Auto Insurance Premiums
Age is just one of the factors that car insurance companies consider when determining insurance premiums. Other factors include gender, marital status, location, driving record, vehicle, and past history of claims.
In addition to age, auto insurance companies have determined that other personal factors make drivers at a higher risk. Overall, male drivers are considered to be a higher risk than female drivers; young men, in particular, are one of the most expensive demographics to ensure. Married individuals are considered safe drivers, so single people pay higher auto insurance premiums.
An individual’s driving record includes past traffic violations, accidents, and license points. Together, these inform insurance companies of the risk that an individual poses. Car insurance companies consider any traffic violations, whether major or minor, and all accidents, whether at-fault or no-fault. However, auto insurance companies are particularly weary of individuals whose driving record includes
- Multiple minor or major traffic infractions
- One or more DWIs
- Multiple accidents that are considered no-fault or determined the be the other driver’s fault
- Driving without a license or without insurance
Most insurance companies look at a driver’s three, four, or five year driving record. Some major infractions, like DWIs, may stay on a driver’s record longer, however.
The location of a driver has many implications for vehicle insurance rates. The following area factors are considered higher risk:
- Cities, which have more people and vehicles per square mile
- Perilous weather conditions, such as snow, ice, and rain
- Little availability of emergency services
- Poor road design and more intersections
- Less frequent road work
- More expensive vehicles on the road, which are more expensive to fix or replace
Vehicle type can also have an impact on the cost of auto insurance. Auto insurance companies look at a vehicle’s safety rating by the Insurance Institute for Highway Safety and availability of safety features. Some insurance companies will offer discounts for vehicles with front and side airbags and antilock brakes. Insurance companies have realized that vehicles also affect the attitude of the driver, which means that certain types of cars are more expensive to insure. Drivers who drive sports cars have a tendency to driver more recklessly and faster than drivers who drive SUVs.
Insurance companies are particularly concerned about a driver’s previous insurance coverage and claims. A driver who has had consistent insurance coverage over years or decades of driving experience is considered a lower risk. Any prior insurance claims are likely to increase future insurance premiums; however, the more claims that a driver has had and the higher the amount of the claims, the more significant the increase in rates.
The more driving someone does that greater the likelihood of an accident or injury, so drivers who drive more miles each year than the average face higher rates. Recently, some insurance companies have started checking driver’s credit reports and considering credit scores in their calculations. Each auto insurance company has its own system of considering driver risk factors and annual premium costs, and other factors may be considered.
Strategies for Getting Lower Auto Insurance Rates
While age, as well as other of the above factors, is something outside of drivers’ control, there are a number of ways to decrease auto insurance premiums. The most obvious way to decrease vehicle insurance rates is to maintain a clean driving record; a driving record may have the greatest effect on overall insurance rates.
Every auto insurance company has a unique algorithm that gives different weight to many different factors. Thus, one insurance company may offer a very different rate than another company. Because of this, drivers should regularly compare insurance rates. In general, a driver should do a rate comparison every six months and any time any of the above factors change, such as a new vehicle, change in marital status, or move.
After any accident or traffic violation, a driver should take any available driver improvement course. While not every state offers driving courses, many do. A typical driving course costs less than $50 and takes half a day; some are available online. Taking a driving course may remove points from someone’s driving record and prevent an insurance company from raising rates.
Driving courses may also be taken at other times, and some auto insurance companies provide discounted rates for policyholders who completedriver improvement courses. Other auto insurance companies may offer discounts for younger drivers who have good grades, attend college, or take driver’s education courses. Discount programs may also be available through certain employers or civic groups. Multiple car discounts and multiple policy discounts are regularly available; ensuring both a vehicle and home can be an easy way to save money on both policies. A few companies have started offering accident protection programs that ensure that an accident does not increase monthly auto insurance premiums.
Another important consideration for drivers who have had an accident or received a traffic ticket is to fight a conviction that is truly unfair. Law enforcement officers make mistakes just like everyone, and drivers have the right to defend themselves against injustice. Individuals can represent themselves in court or hire an attorney.
A simple strategy that may have a great payoff for some is to ensure the accuracy of all information that the car insurance company uses. Even a small change of location, vehicle, and driving habits can lead to a decrease in insurance costs. Drivers should also check their driving record and credit history, since insurance companies use both to determine rates.
Finally, some drivers may resort to larger changes to decrease the cost of their auto insurance. A life change, like a new vehicle or a move to a cheaper location, may be a drastic, but successful, way to decrease premiums. Others may want to drop full coverage or increase deductible amounts, which are both surefire ways to drop rates.
A driver’s age impacts the cost of auto insurance rates; both younger and older drivers are considered at a higher risk for accidents. Younger drivers, in particular, are more likely to be distracted, reckless, and inexperienced. Drivers under the age of 26 or over the age of 65 are likely to pay higher rates.
In today’s economy, many people are seeking the way to decrease expenses, and the high cost of auto insurance makes it a target for change. Comparing insurance rates, enrolling in discount programs, and ensuring correct information are easy ways to decrease insurance premiums. After an accident or driving infraction, drivers should consider taking a driver improvement course or fighting an unjust ticket to try to prevent or lessen an increase in premiums.
