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How Age Affects Auto Insurance Rates?

Research on insurance data suggest that the age of the policyholder can significantly affect the rate of the insurance premium. Though, the aging of the policyholder is not one of the key areas of consideration while buying the insurance policies, but, the teen and elder drivers require paying a significantly higher cost to insure their vehicles. How much extra cost is these categories of policyholders are paying? Why are insurers charging additional money for insuring these drivers? Are there any ways to escape this challenge? Here are the answers to these questions.

Average Rates Car Insurance by Age

A recently conducted research suggests that the major insurers in the United States are charging the policyholders between 25 and 55 years of age, between USD 2200 and 1700 for insuring their cars, while the same insurer will charge around USD 7000 and 3100 for insuring the policyholders aging between 16 and 24. On the other hand, policyholders above the age group of 55 and 85 years are required to pay in the range USD 1800 and 2500 for insuring their cars. This data is a clear evidence that the aging of the policyholder can significantly influence the rate of premium payable.

Age group Average rate
16-19 $2,999
20-24 $2,040
25-29 $1,707
30-34 $1,591
35-39 $1,610
40-44 $1,603
45-49 $1,478
50-54 $1,284
55-59 $1,214
60-64 $1,169
65-69 $1,244
70-74 $1,187
75 and up $1,203

Why Do Young and Old Drivers Pay More for Car Insurance?

From the perspective of the policyholder, it might seem to be an offense, if they are discriminated on the rates of premium payable, on the basis of their age. However, if you consider the fact from bigger perspectives, you will see it is absolutely logical. Explained in one line, the teen and elderly drivers are charged at higher rates for the reason that these drivers are more likely to catch an accident and raise an insurance claim. Thus, the insurers are at no-fault charging these drivers at higher rates.

As for the teens, they have no liabilities that will compel them to take a defensive approach while driving. Hence, these flocks start getting into adventures in the course of driving that makes them more vulnerable to catching car accidents. Thus, these drivers are more likely to raise the insurance claims.

On the other hand, even if the old drivers are assumed to be more mature, however, due to aging, they start losing the hand-eye coordination that creates a challenge in the path of safe driving. Thus, these drivers are high-risk profiles who are likely to raise the insurance claims.

As it comes up from the data on the car accidents, these drivers are the major participants in the car accidents and thus, it is absolutely logical for the insurers charge them a higher rate for insuring their cars.

How to Save Money on Car Insurance as a Young or Old Driver?

For both these categories, if the rate of auto insurance is to be reduced, having an impressive driving history is essential. For the teens, it will be wise to undergo the safe driving courses that will make them eligible for special discounts. Likewise, the elderly drivers should comply with the necessary eye testing rules that is likely to earn them some concession on the insurance policies.

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