Each year brings a new milestone. When you turn 16, you can drive; when you turn 18 you can vote; and, when you turn 25, you can get cheaper auto insurance–right?
Auto insurance rates are calculated based on a variety of factors, including age, which indicates several things to insurers.
It can help measure the amount of driving experience an individual has, which in turn helps assess how much of an accident risk they are.
The way auto insurance companies view it, the more years you have driven, the more experience you have had, which means that you would be less likely to be in an accident. Therefore, they can offer you a lower premium.
While that is the premise of getting cheaper auto insurance when you turn 25, is it a guarantee?
How Age Affects Your Insurance
While your age does play a significant role in your auto insurance rate, it does not mean that you will automatically get a cheaper rate when you turn 25. However, the odds are likely in your favor.
The majority of your insurance rate is calculated on the amount of financial risk you pose to the insurer.
This means that you could be 30 and have a higher insurance premium than, say, an 18-year-old if you have a poor driving record, accident history, or even a low credit score.
“Teenagers drive less than all but the oldest people, but their numbers of crashes and crash deaths are disproportionately high. The fatal crash rate per mile driven for 16-17 year-olds is about 3 times the rate for drivers 20 and older. Based on police-reported crashes of all severities, the crash rate for 16-19 year-olds is nearly 4 times the rate for drivers 20 and older. Risk is highest at age 16.” – According to The Insurance Institute for Highway Safety (IIHS)
Teens are not the only age bracket that may have higher insurance rates. Elderly drivers, in their late seventies and early eighties, will often have a higher premium rate, as their risk increases too.
Find the Best Auto Insurance for Your Needs
Age does not trump other factors that are also calculated into your insurance rate. There are several ways to pay a lower insurance premium if you are under 25, such as the Good Student Discount or a multi-car discount.
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