9 Life Events that Affect Car Insurance Rates

From marriage to starting a new job, which major life events result in car insurance rates going up or down?

Why do car insurance rates change?


Your car insurance rates are largely dictated by you: your driving history, location, and other personalized rating factors. Any major life change you undertake can alter your insurability — and the auto insurance rates you pay. Remaining mindful of the affect of life events on car insurance is the first step toward finding the best possible car insurance rate at every stage of life.


Car insurance rates and life events
  1. Getting older
  2. Getting married
  3. Getting divorced
  4. Buying a second car
  5. Buying a house
  6. Paying off a loan
  7. Getting a job
  8. Insuring a teen driver
  9. Losing a policy member
  10. Methodology and details



At what age does car insurance get cheaper?


The primary ages at which car insurance gets cheaper are 18 and 25. On average, a driver can expect to save approximately $1,600 per year after their 18th birthday, and again after they turn 25. This varies depending on gender, with females' car insurance rates dropping more substantially at age 18. If you’re a young driver — or if you carry a young driver on your car insurance policy — it’s worth shopping around for a new policy when you reach these age milestones.


Average car insurance premiums by age

Age Average Annual Premium Difference from Prior Age
16 $6,573 --
17 $5,704 -$869
18 $4,970 -$734
19 $3,356 -$1,613
20 $3,005 -$351
21 $2,400 -$605
22 $2,150 -$250
23 $1,990 -$160
24 $1,859 -$131
25 $1,592 -$266

Fifty-year-olds pay the least for car insurance. Car insurance companies don't see much risk in insuring a 50-year-old, as many drivers this age are financially stable and safe on the roads. The typical 50-year-old pays nearly $200 less per year than does the average American driver.


Average car insurance cost by age range

Age Range Average Annual Premium
16-19 $5,151
20-29 $1,918
30-39 $1,407
40-49 $1,355
50-59 $1,258
60-69 $1,287
70-79 $1,514
80-85 $1,804

Additional resources:

If you’re looking for more age-specific car insurance information, including actual rates from popular insurers, see our additional resources:





Does getting married change car insurance rates?


Marriage typically results in lower car insurance rates. Insurance companies view married couples as more likely to share driving responsibilities and less likely to file a claim, i.e., less costly clients. After you’re officially married, consider updating your car insurance policy. Even if your spouse doesn’t drive, most car insurance companies will require a spouse be listed on the policy. If they’re not licensed to drive, you can list them as an “excluded driver,” with no penalty.

If you and your spouse both drive, your car insurance company may require both of you and your vehicles to be listed on the same policy. We did some of the legwork, creating a generic user profile and surveying top insurers to find the cheapest insurance rates for married couples.


Average annual insurance rates for a married couple

Company Average Premium
State Farm $3,932
Allstate $2,274
GEICO $1,302
Progressive $1,492
Liberty Mutual $2,156

GEICO is the cheapest car insurance company for a married couple, offering an average annual two-vehicle premium of just $1,302 ($108.50 per month).

For more information on married couples — or unmarried couples — and car insurance, consult our additional resources:





Car insurance after a divorce


Handling car insurance during a divorce can be tricky. While there are some specific details to review related to car insurance and divorce, the big-picture impact on rates is insubstantial. On average, auto insurance premiums increase by $77 per year after a divorce.


Average annual car insurance costs by marital status

Marital Status Average Annual Premium
Single $1,427
Married $1,348
Divorced $1,425
Widowed $1,395

Car insurance companies associate different risk levels to single drivers, divorced policyholders, and married couples. Married couples share driving responsibilities and have historically filed fewer claims than unmarried couples or single individuals. The difference between married and divorced couples' car insurance premiums is less than $40 per policy period, so it isn’t a significant gap.





Car insurance when buying a second car


Buying a second car — even without adding another driver — can impact your auto insurance rates. Many companies offer a multi-car discount, charging you less when you open an additional line of business. The discount won’t be enough to offset the cost of insuring an additional vehicle, but every little bit helps. The amount of the discount will vary by insurer, but typical multi-car discounts total between 10-25%.

This discount may make it worthwhile to keep all of your vehicles on one policy. There are some scenarios in which you might not be able to them keep them together — this typically relates to specialty vehicles. If you own a classic vehicle or an exceedingly valuable vehicle, it might fall into a separate category of insurance which is ineligible for a multi-car policy.

It’s unlikely you’d want to insure one vehicle with one company and a second car with another. Learn more about insurance for classic cars.





Car insurance rates after buying a home


Buying your first — or second — home is a big step, and one that lead to insurance savings. Homeowners are considered more financially stable and less risky than their renting counterparts, leading to lower auto insurance premiums.

The real benefit of being a homeowner comes from the multi-policy discounts offered by some insurers. Much like buying a second car, a multi-policy discount becomes available when you're able to open a home insurance policy with the same company you're using for your car insurance. It's usually a good idea to insure your home and auto with the same company. As a homeowner, you can save an average of $112 per year via a multi-policy home-and-car insurance setup.


Average annual car insurance premiums based on housing status

Homeowner Status Average Annual Premium
Renter $1,350
Condo Owner $1,280
Homeowner $1,261

More information regarding home and car insurance:





Car insurance after repaying loans


Paying off a loan can lead to more affordable car insurance because of one primary rating factor: credit score. Credit is a major rating factor, used by nearly every major insurance provider. Car insurance companies use credit scores to gauge insurability because historical data indicates drivers with high credit tend to drive more carefully and file fewer claims than do drivers with poor credit. When drivers with high credit do file claims, they tend to be less costly than claims filed by drivers with low credit.


Average annual auto insurance rates by credit tier

Credit Tier Average Annual Premium $ Difference
Very Poor (300-579) $2,687 -
Fair (580-669) $2,191 $496
Good (670-739) $1,800 $391
Very Good (740-799) $1,495 $305
Exceptional (800-850) $1,257 $239

Car insurance costs drop by an average of 17% from one credit tier to the next. If you’ve recently paid off a loan and improved your credit standing, you should shop for car insurance.

If you're looking for more credit score-specific resources on car insurance, see our additional resources below:





Getting a job


Joining the workforce can help you obtain cheaper car insurance, depending on your area of expertise. Some professional associations maintain relationships with insurance companies, resulting in member discounts. For example, GEICO has working relationships with organizations and societies that offer small discounts.

Insurance companies may provide built-in discounts for those in certain occupations. Historical data shows certain occupations — engineering, science, education, and others — attract less-risky individuals, and car insurance companies offer those drivers better rates. Bear in mind, your insurance premium won’t raise because you aren’t a police officer or teacher. Employment-based auto insurance discounts tend to be quite small and aren’t available in every state or through every insurer.


Average annual auto insurance rates by job

Occupation Average Annual Premium
Unemployed $1,428
Military $1,373
Engineer $1,381
Lawyer $1,381
Scientist $1,383
Doctor $1,384
Law Enforcement $1,391
Teacher $1,391
Manager $1,409
Civil Servant $1,419
Proprietor $1,427
Other $1,427

Learn more about auto insurance rates by profession — or look at industry-specific data for military personnel, teachers, medical professionals, and law enforcement agents.





Adding a teen driver to your policy


After actually raising a teenager, adding them to your car insurance policy might be the second-most challenging aspect of parenting. The cost of adding a teen driver to your policy can be as great as a 100% rate hike, with a male teen driver increasing this to 106%.


Average annual insurance increase after adding a teen driver

Age Average Annual Premium on Family Plan Increase to Overall Family Plan
16 $2,865 118%
17 $2,695 105%
18 $2,428 89%
19 $2,212 68%

The reason for this is simple: teenagers are poor drivers. Young drivers are statistically more likely to get into an accident, causing an insurance company to pay out a claim. Insurance companies reflect this increased risk in additional expense, i.e., higher premiums.

Cost-cutting solutions are out there if you're facing the prospect of insuring your teen driver.

  • See if your young driver qualifies for a good student discount: If your son or daughter has a GPA of 3.0 or better, your insurance company might offer a good student discount. Insurance companies see drivers with good grades as less risky.
  • Take a defensive driving course: Taking a pre-approved defensive driving course can help decrease the risk presented by your teen driver.

Annual savings: good student/safe driving discounts

Age Average Savings
16 $344
17 $303
18 $267
19 $219
Average $283

At the end of the day, you might end up paying more for teen car insurance simply because you’re with the wrong company. We performed a study on car insurance for teenagers to find the cheapest insurance for a young driver.


Average annual car insurance rates for a teen driver

Company 6-Month Premium
State Farm $5,998
Allstate $4,590
Geico $1,974
Progressive $2,462
Liberty Mutual $3,352

GEICO and Progressive are the cheapest car insurance companies for young drivers. Consider this as a jumping off point and begin — but don't end! — your search for auto insurance with these companies. Although GEICO and Progressive are considerably cheaper than State Farm for this example profile, they might not be for you.





Car insurance after policyholder death


Many post-mortem car insurance policy procedures are company-specific and depend on who is the policyholder. For example, if the individual who passed was the policyholder, it can be difficult to remove them from the policy. Depending on your insurance company, procedures may vary. It is best to call a customer service representative at your insurer and explain the situation.

Managing car insurance can also be difficult if the deceased person was the lone policy owner. In these circumstances, you could be required to submit proof that you are the executor of the estate. Policies such as this exist as a security safeguard.





How do life events impact car insurance rates?


In addition to the major life events covered above, smaller changes may impact your insurability and rates. These common events include being involved in a car accident, moving, or having a ticket fall off your record. Because these life events happen so often, it’s important to shop for car insurance frequently. A general rule in the insurance world is to assess your situation every six months to ensure you’re getting the best possible rate. You can easily see quotes by entering your zip code below.




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Methodology


Between September and December 2017, The Zebra conducted comprehensive auto insurance pricing analysis using its proprietary quote engine, comprising data from insurance rating platforms and public rate filings. The Zebra examined nearly 53 million rates to explore insurance trends across all U.S. zip codes, averaged by state, including Washington, DC.

Analysis used a consistent base profile for the insured driver: a 30-year-old single male driving a 2013 Honda Accord EX with a good driving history and coverage limits of $50,000 bodily injury liability per person/$100,000 bodily injury liability per accident/$50,000 property damage liability per accident with a $500 deductible for comprehensive and collision. For coverage level data, optional coverage (that must be rejected in writing) is included where applicable, including uninsured motorist coverage and personal injury protection.

National property and casualty losses information is from the Insurance Information Institute and the NOAA National Centers for Environmental Information U.S. Billion-Dollar Weather and Climate Disasters report.

For vehicle make and model data, analysis referenced the most popular vehicles in the U.S. by 2016 year-end sales according to Goodcarbadcar.net’s automakers’ data.

Some data may vary slightly throughout the report, based on rounding.