#adulting is hard work—let us handle the insurance for you
Although pop-culture makes a big deal out of turning 22 (thanks, T-Swizzle), your insurance company isn't going to be throwing up the sparklers any time soon. They treat the age very similar to most years in your early 20s. While you pay $154 less per year on auto insurance simply by turning 22, you are still paying more than twice the national average. A lot of that has to do with being a young driver — you have less experience driving, smaller insurance history, and overall less life experience, which all of which equates to more risk for insurance companies. And, in a business that surrounds itself in avoiding risk, being young and inexperienced is a tricky area. Let’s break down the ins-and-outs of car insurance for 22-year-olds in order to make sure you’re getting the absolute best rate.
All companies should not be seen as equal when it comes to choosing car insurance, as we can see below. As an average, 22-year-olds (on their own 6-month policy) paid $1,0115 for auto insurance in 2016 which is considerably higher than the national average of $661. So, in order to really understand the insurance arena for young drivers, we decided to conduct a survey amongst the top 5 companies across 5 zip codes in the US. Using a profile outlined here, we discovered that Progressive is the cheapest for 23-year-old drivers, with Geico in a close second. Now, we understand we are discussing 22-year-old drivers here, so consider our data as a jumping off point when looking for car insurance.
|Location||State Farm||Allstate||Geico||Progressive||Liberty Mutual|
As you age, the difference between men and women in car insurance premiums begins to fade. At the national average level, the difference between men and women for auto insurance premiums is only $1 — if it exists at all The difference between the two at 22 is still over $200 per year and is a reflection of the risk associated with young male drivers in terms of an increase of accidents and citations. But, rest assured that as you age, the difference will fade.
While you shouldn’t pick your location based on what your insurance premium will be, you should still consider its effect. Living in a crowded metropolitan area will cause your premium to be higher, as more densely-packed cities are considered more likely to cause a claim given the population size. Moreover, living in coastal areas where floods are likely such as Louisiana will increase your premium.
In the traditional route of life, most 22-year-olds have graduated from college and with that, comes some insurance savings. Insurance companies use the correlation between higher amounts of education and a decreased severity and frequency of claims to lower premiums with people with more education. Fair or not, the difference is only moderate.
Your credit score is one of the biggest rating factors for insurance companies and it can be incredibly impactful on your premium. Statistically, drivers with lower credit (below 524) pay more than twice the amount for car insurance than drivers with excellent credit (823 or more). Just like your education, this has to do with the correlation between drivers with lower credit and an increased number of severe claims. From an insurance perspective, if there is more risk associated with insuring a person with a poor credit score, they will cushion this risk with a higher premium.
When your insurance is calculated, it entails aspects about you and your car via the VIN (vehicle identification number). So, just like having poor credit is an i
ndicator of a higher premium, having a fancy car will also increase your premium. Vehicles with a high MSRP rating that are more expensive for your insurance company to replace will result in a higher premium. If you’re trying to avoid paying more for auto insurance, consider a moderate vehicle.
Depending on your path in life, there are some ways to save on car insurance. Whether you're still in school or have since graduated, we have some tips for you.
These discounts are pretty straight forward. In order to be a good student, you must have a GPA above a 3.0 and submit proof to your insurance company every policy period. In order to qualify for the defensive driver, you must take an actual defensive driving course and again, supply proof. While the amount varies per company, if you take advantage of both of these discounts, you can expect an average savings of $138 per year.
Average Annual Savings for Good Student and Good Driver Discount
This goes without saying, but it’s imperative as a young driver to stay out of trouble. While your age is already counting against you, you don’t want a DUI or unnecessary citation on your record, as it will affect your rate massively. In most states, you will be charged for a citation or at-fault accident for 3 years. Meaning, if you are rated for a DUI, your premium will raise $5,156 for the 3 years you are rated for that. If, however, you’re in California, you’ll actually be charged 10 years for that citation — a number we’re afraid to calculate ($17,190 for auto insurance over 10 years).
|Speeding 11 - 15 MPH Over Limit||$141|
|Speeding 16 - 20 MPH Over Limit||$153|
|Speeding 21 - 25 MPH Over Limit||$165|
If you’re living on your own, you must likely have a renter’s policy. A renter’s policy acts as a liability policy for yourself as well as protects your personal property. While they’re both usually pretty inexpensive, they can also save you on your auto insurance if you get them from the same company. Through a multi-policy, your insurance rewards you for putting two policies with their company.
Annual Savings in 2016
|Renter||Renter with Multi-Policy|
Because your premium can change as you do, it’s important to shop for car insurance every 6 months with as many companies as possible. Only with us can you view hundreds of different premiums at once.
Being 22 is a considerable middle point in terms of auto insurance. While you have experienced some insurance savings, your youthful age still burdens you with a higher than average premium. Overall, you pay $981 more for auto insurance than the national average. Still, considering the data we pulled from 5 top insurance companies, you should begin your search with Geico and Progressive as well as consider the discounts and options we outlined.
We randomly selected 5 zip codes in 5 different areas across the US by using the 5 most popular companies in the US based on net premiums written. Here are the zip codes we selected:
With that created, we created our user profile: a 23-year-old male driver. This is the information we chose to use: