When insurance companies offer insurance products, they consider the age one of the most important factors that play a major role in preparing insurance quotes.
Age factor becomes more relevant when you go for the general car insurance because the insurance companies measure the risk of accidents and driving experience on the basis of age. When car insurance companies ask your age, they want to calculate your premiums that can be affected if your age is under 25 years or above 65. Realistically, this is what we say age discrimination, but insurance companies can sell their policies on solid evidence as they need to decrease the risk factor up to the maximum level to generate profit for them.
What are the risks attached with the age? Well, the young drivers are very enthusiastic and therefore, can be dangerous on the roads. On the other hand, with the increase in age, the reflexes slowdown that can also increase the risk factor. When car insurance companies find a higher risk to take on, they increase car insurance rates.
According to some statistics, the risk factor decreases when the applicant has spent some years behind the wheels. The experienced drivers get into an accident occasionally and therefore, the chances of the claim for reimbursement decrease. The simple meaning is that they will be affordable for the insurance company.
Average rates for different age groups
For getting the accurate value, there is a need to get quotes from different companies. While comparing more than 20 companies, we found that the premiums are reasonably higher for the young and old drivers.
Let’s have a look!
The average insurance premium for a 16 year old driver is more than $6500. When there is an age of 20, the value significantly downs and the rate remains between $3800 to $4200. After five years when the driver is 25 years old, the insurance premium becomes almost half and the buyer pays only $2000 to $2200. When you are 25 or more and less than 65, the premium remains between $1500 to $2000. After 65 years, it marginally increases and goes up to $2500 till the age of 85.
The above figures show that the teenagers pay three times more than the drivers of the middle age. When we compare the rates offered to the teenagers with experienced drivers, who are in mid-fifties, the difference is even more. These figures also show that after 25 years, the insurance premiums fall drastically and the buyers can enjoy almost 30% lower rates. This trend changes after the age of 60, but remains reasonable because the older drivers follow all the traffic rules and show no urgency on the roads.
Expert attorneys at Hipskind & McAninch explain that the reason for teenagers having to pay more premium for insurance than then middle-aged ones are their higher risk of entering into a car accident.
Does the gender matter?
Yes, it does. The general car insurance companies find female drivers more responsible than the males. Overall, the premium insurance rates are 12% higher for men more than the women. However, when gender is considered with age, this percentage varies. According to the figures, the male drivers of age less than 21 years pay 20% more than the female drivers. These values reverse after the age of 30 when female drivers pay 2% more than the male ones. With the increase in age, the difference remains in the favor of males, but after 70 years, it reverses again in the favor of female drivers, although the difference is marginal.
The reasons behind higher premiums for old drivers
Mature drivers, on the other hand, are wonderful in driving and pass the females as well in getting affordable insurance rates. Improved driving skills and confidence on the roads make them the most responsible drivers. It helps them get the most reasonable insurance rates. This trend slightly changes after the age of 60. The reasons are slower reflexes and aging. Both these reasons increase the risk for car insurance companies, although it does not affect the premiums much. The rates affect the buyer when he enters into his 70s. Under the eyes of an insurance company, a 25 year old driver is better than the one, who is 70 or more.
The reasons behind higher premiums for young drivers
Young drivers are enthusiastic, passionate and adventurous. They are also inexperienced and have not spent much time on the roads as a driver. The immature and enthusiastic approach towards driving increases the chances of the accidents. The figures also support our argument. According to some available figures, the drivers between the age of 16 and 19 are involved in car accidents three times more than the mature drivers. According to the statistics given by the insurance companies, the young drivers are also involved in the fatal accidents around 10% more than the experienced drivers as well although the unlicensed drivers are also included in these figures. Thus, according to the insurance companies, young drivers make more accidents, so they need to pay more in the form of insurance premiums.
An important aspect that cannot be ignored
As a buyer, you must be informed that age is one of the primary factors through which the premium costs can be determined. There are many other factors such as the brand name, model, age of the car, marital status, credit score, your performance on the roads, your state etc. that are involved in determining the insurance rates. These factors can change the premium rates, so you need to consider other factors as well with age and must not think that our mentioned rates are final.
The techniques to save money as a young or old driver
Now, the question is “how can I save money if I am a young or old driver?”
In the following section, we will tell you some wonderful techniques, through which you will not save money, but also enjoy the best coverage in case of any incident.
This technique is suitable for buying your favorite product or services, but when we use it for getting affordable rates from the insurance companies, no other method works more effective than shopping around. As we got quotes from different companies, we can assure you that there are certain companies that sell their products to the young drivers much better than the other companies. The same situation is for older drivers, who can get some wonderful rates after getting quotes from more than three companies. However, if you think that the insurance rate will come closer to the drivers of middle-ages, it will never happen.
What do we recommend? Well, you must get quotes from more than three companies, though the best number is five. The big brands offer you compare the quotes with other companies as well that can be wonderful for you to get more affordable rates.
There are certain companies that offer discounts to both, the young and senior drivers. You just need to shop around if you need these discounts. This is the easiest way for you to pay less premiums and get maximum coverage. These discounts are different for different age groups, so we will discuss them separately.
Discounts for young drivers
- The students can get some wonderful discounts if they may maintain good grades in studies.
- They will get discounts if they can keep themselves in the defensive mode while driving. It can be determined after getting information about the issued warnings, tickets and involvement in accidents.
- Discounts up to 10% can also be availed if the young drivers join the driver re-education course.
Discounts for senior drivers
- If you are more than 55 years old, have retired and is a safe driver, you can get a straightaway discount that can be around 10%.
- There are numerous car insurance companies in the market that can give you a discount if you are over 55 and have got admission in the re-take defensive driving course.
Join your parents policy as a young driver
How does it help young drivers get the most valuable discounts? Well, if you join your parents in a car insurance, the premium costs can be almost 50% of the actual discounts. You can win this discount because your parents share the risk with you as a young driver. It helps the insurance companies get comfort in giving you discounted rates. You must remember that your parents will bear significantly more expensive insurance premium rates because they are adding risk in their insurances. So, if your parents are willing to do so, you can enjoy the most wonderful rates as a young driver.
Although the premium costs can be very high for some age groups, buying an insurance is binding by law in all the states of the United States of America. Therefore, all the drivers need to buy the most suitable insurance policy for them. Generally, the buyers try to buy that one, whichis the lowest under the law, but it does not help them enjoy most of the features that are required while driving on the roads. Therefore, they need to employ some strategies through which they can get discounts or buy a better deal available in the insurance market.