Spend your 20s enjoying life — we'll handle the insurance
Being 20-years-old can have major implications in the insurance world. While you’re not longer rated as a risky teenager, you still pay more for auto insurance than the majority of other ages. On average, 20-year-olds pay nearly $1,400 more for auto insurance than the national average. In order to understand how you can save as a 20-year-old, we need to first understand what causes you to pay more. Let’s break it down by age, gender, location, and vehicle type.
While you’re under 25, gender is still a pretty considerable rating factor. Insurance companies look at risk exposure when calculating premiums, and to them, a 20-year-old male driver is more risky than a female. As such, males pay $172 more than average for auto insurance than females during a 6-month premium cycle. Still, you should take comfort in the fact that once you turn 25, the difference between men and women’s premium is only $100 bucks per year. And, for all averages, men only pay $1 more than women.
Insurance is not federally regulated but by your state and then rated based on your zip code. So, you can see why where you live plays a big part in your insurance premium. If you live in a well populated zip code, such as a university-area, you can expect to pay more for the added probability of an accident.
Now that we have outlined why 20-year-olds pay more for auto insurance, let’s get into some savings discounts.
Most insurance companies offer this discount from 16 until you’re 25-year-olds, but this can vary. Companies offer this not because they care about your academic success, but historical data has shown them that student’s with higher grades (the discount usually requires above a 3.0) drive more cautiously and are less likely to file a claim or get into an accident. Combined with a defensive driver discount, you can save an average of $189!
Average Savings for Good Student and Good Driver Discount
If you’ve taken a defensive driving class, meaning a professionally instructed class that your insurance company usually has to approve ahead of time, you may be entitled to a discount. Insurance companies offer this as drivers who have completed this type of course are less likely to need financial support from their insurance company.
Keeping a clean driving record will save you the hassle of dealing with tickets as well as the tedious claims process. On average, an at-fault accident can raise your premium $300 per year. DUIs and racing, the most expensive citations, can raise your premium 40%. And, most insurance companies will continue to charge you for these accidents for 3 years.
If you’re living in an apartment or house, you should have a renter’s policy. A renter’s policy will cover you (your liability) as well as your personal property in the event of a covered claim. Compared to an auto insurance, renter’s policies are quite inexpensive - $150 a year. But if you get your renter’s policy from the same company as your auto, you can expect a multi-policy discount.
Bundling Savings by National Average
|Renter||Renter with Multi-Policy|