Why Age Affects Car Insurance Premiums

It may feel like age discrimination, but how old you are can significantly affect your insurance rates. If you, or another driver in your home, is under 25 or over 65, it can negatively impact what you pay for car insurance.

Typically, drivers in these age groups have more incidents on the roadways. This means a higher risk for insurers, which equates to a higher rate for you.

Young Drivers

It stands to reason that if you have less experience driving a car, you may be more likely to make a mistake. These errors can result in auto accidents. These accidents cost the auto insurance companies money, and they have to get that money from somewhere. Therefore, these drivers pay a higher price for insurance coverage.

Decades of statistics compiled by the Insurance Institute for Highway Safety show that younger drivers cause more accidents than more experienced drivers do. Sadly, this age group also leads the way in traffic-related fatalities. Here are a few of those stats:

  • Though adults are more likely to drink and drive, teens are far more likely to have an accident when they do.
  • Drivers aged 16 to 17 have twice the likelihood of being in an accident-related fatality than drivers aged 18 to 19.
  • Among 16-19-year-olds, the number of accident-related deaths, per mile, is three times as high as drivers over the age of 20.
  • Teenage drivers drive far fewer miles than adults, yet have much higher accident and fatality rates.

The relative inexperience of teen and new drivers makes them more likely to drive too fast, and to be less aware of the dangers on the roads.

Adult Drivers

From the age of 25 to 65 your insurance rates will typically go down as long as you maintain a good driving record. These savings can be even greater depending on where you live, how many miles you drive in a year and the kind of car that you drive.

Senior Drivers

Insurance rates tend to increase again after the age of 65. Many things factor into this like arthritis and other physical impairments, poor vision, and prescription medications. You are also more likely to sustain a serious injury in the event of an accident.

How You Can Save

Check with your insurance agent. Many offer student driving discounts. You may also be able to be placed on the same policy as a more experienced driver. This will spread out the risk, and may lower the rate. Driving a car with a better safety rating also helps.

The main thing is to drive safely and avoid potential accidents. You won’t be young forever. Make sure that you drive carefully and live long enough to enjoy the lower rates of an adult.