What Does My Age Have to Do with Insurance Rates?

There are many factors that determine how much car insurance you are going to pay. Each company has their own formula for figuring it out. That's why most people shop around for insurance. They all, however, use your age as part of the equation that determines insurance rates.

Why are Teenagers with a New License Rated so High on Insurance?

Young drivers anxiously wait to be old enough to have a driver's license. Their parents are anxious also, but for much different reasons. Parents know that their auto insurance rates are about to take a drastic jump.

My grandson went to a professional driving school to receive his license during summer break last year. He passed the course with high praise from the instructor. He is a very safe driver, but when he was added to my son's insurance policy, the rates nearly doubled.

Insurance companies believe that young driver's do not have the experience to be safe drivers. They also believe that young drivers pose more of a risk because they may hot rod a car to impress friends. Young male drivers are rated higher than girls because insurance companies believe they will be the biggest risk takers.

Statistics on young drivers having accidents because they were texting or talking on a cell phone are increasing as well. This factors into how high a rate the insurance company imposes on young drivers.

Middle Aged and Married Generally gets the Best Insurance Rates

According to DMV.org, drivers between the ages of 40 and 50 years of age get the best rates because statistics show them to be the safest drivers. If they are also married, the rates are even better because insurance companies believe they are showing responsibility, and probably do not drive as much as a single person would. They assume that most married couples spend evenings at home together.

Of course, age is only a small portion in determining insurance rates, but the premium can either increase or decrease as the driver gets older. Think of insurance rates like climbing a hill. Young drivers start at the bottom where prices are high and climb up to reach a good quote. Middle aged people sit on the top, but then they start going down the side towards higher prices as they age.

Battling the Age of Insurance Rates

You cannot do anything about your age, but you can help to determine other factors that the insurance company uses when deciding what your rate will be. Keep your driving record clean. Keep your credit score as high as possible. Take a safe driving course. Keep your insurance policy in force, even if your vehicle breaks down. Get quotes from other insurance agents.

Related Articles:

How to Get a Discount on Senior Auto Insurance

Comp, Collision, Liability: Understanding Insurance Definitions

Ways to Get Cheaper Rates for Young Drivers

How to Lower Rates on High Risk Auto Insurance