Best Car Insurance for 40 year olds

Find Fantastic Coverage for your Fabulous Forties

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What is car insurance at 40?

Casting aside your dirty 30s for your fabulous 40s reflects a momentous change in your own authority, responsibility, and personal growth. You’re starting to get past this idea of a “mid-life crisis” and are content to simply live your life as, well, a fabulous 40-something. With this perspective shift, your relationship with your insurance company will also most likely change as well. Getting married, buying a bigger home, adding a teen driver to your car insurance, and even adding some additional lines of coverage will have some important insurance ramifications. So, let’s get to it: this is your insurance guide for your 40s.

Cheapest car insurance companies for 40-year-olds

Using a methodology outlined here, we can see that USAA is the cheapest car insurance company for drivers between the ages of 40-49. USAA is over $700 cheaper than the total group average with an annual premium of $1,185.

InsurerAverage Premium for 40-year-olds
Liberty Mutual$2,171
State Farm$2,308

If you do not qualify for USAA, Nationwide will be your next cheapest option. At $1,257, Nationwide will cost an average of $629 for a standard 6-month policy or $105 per month.

How your policy changes

Getting married

You might be surprised to learn that getting married can affect your car insurance premium—in a good way. To an insurance company, a married individual appears less risky than a single, divorced, or widowed person. This is because a married person is statistically less likely to file a claim and more likely to share driving responsibilities with their partner. On average, when a single person gets married, their insurance premium drops by about 5.6% or $74/year.

Martial StatusCar Insurance Premium

Buying a house

Taking the plunge into homeownership might seem scary, but you might find some comfort in the savings you’ll receive from your insurance company. We found that homeowners pay around $110/year less for car insurance than renters for a couple of reasons. One, we’re factoring the idea of bundling your homeowners and car insurance policies. This will not only give you a much-coveted multi-policy/bundle discount but also it allows you to have all your insurance eggs in one basket, respectively. Likewise, insurance companies look at homeowners as more financially stable and thus less likely to file a claim than renters. Just like getting married, buying a home allows you to appear to your insurance company as a more stable client in terms of risk.


Getting your kids insured

If you have children and they are old enough to drive, you might find yourself adding them as a driver to your insurance policy—which, you’ll learn, is very expensive. Among 16 to 80-year-olds, 16-year-olds pay the most for car insurance (all other measures constant) at $6,491 per year in 2016. This figure, while high, is considering if the 16-year-old is entirely on their own policy. Adding a teenage driver to your policy, however, can still raise your premium by thousands of dollars.

As a 40-something driver who owns a home and is married, you appear to your insurance company as a stable and low-risk customer. But your newly licensed 16-year-old provides an entirely new set of risks. Statistically speaking, your teenage driver is more likely to be in an accident or receive a citation—all of which equates to a high likelihood of a claims payout for your insurance company.


What are some ways you can save?

Good student discount

If your driver has the grades (typically a minimum 3.0 GPA), you might want to consider the "good student" discount. Your insurance company would require proof, such as a transcript every policy period. Below are some estimates of the Good Student Discount and the Good Driver (explained below).

Savings for Good Student and Defensive Discount


Defensive driver discount

Another option is what’s called a defensive driver discount. Young drivers who have taken a professional driving course are less likely to receive a citation or get into an accident. The exact requirements and specifications for this discount vary, so consult your insurance company for details!

Keeping a clean driving record

Because teens are already more likely to be in an accident or get a citation, it is imperative for your insurance rate (and really, their safety) to keep out of trouble. Texting while driving, speeding, or being in an at-fault accident can seriously affect your premium. In a state-by-state breakdown, DUIs and racing (on average the most expensive citations) raise insurance premiums by at least 40%. Moreover, most insurance companies offer a good driver discount which is dependent on a clean driving record.

Accident/ViolationPremium Increase
Reckless Driving$938
Driving with a suspended license$630
At-Fault Accident - Greater Than $2000$538
At-Fault Accident - $1000-$2000$278
Speeding 16 - 20 MPH Over Limit$230
Speeding 21 - 25 MPH Over Limit$227
Speeding 11 - 15 MPH Over Limit$191
Speeding 6 - 10 MPH Over Limit$147
At-Fault Accident - Less Than $1000$94

Getting them their own policy

If you are less concerned about the price and more about your teenage driver affecting your policy, you may consider getting a separate policy. Any accident, ticket, or claim would fall on their policy and thus only affect their rate. This, however, might not be possible for every insurance company as some will require anyone living in the residence to be on the same policy.

Umbrella policy

In keeping with this idea of adding a teenage driver, you may want to consider some additional coverage in the form of umbrella insurance. Your umbrella policy acts like it’s namesake; it creates an overarching roof over you, your family, and your assets in the event you are found legally liable for damages.

An umbrella policy can cover you in a couple of ways you might find useful. It extends the additional liability coverage for your homeowners, auto, and other lines of insurance which apply after the policy limits have exhausted themselves. For example, you or your teenager cause an auto accident and it causes $300,000 in bodily injury damages. In the event your auto policy has a maximum limit of $150,000, your umbrella policy would cover the remaining half.

Furthermore, your umbrella will provide liability coverage in a few other areas that are usually excluded from typical liability coverage. Namely, false arrest, libel, slander, and some liability coverage on a rental you own. In terms of how much of umbrella insurance you should receive, it is recommended the coverage amount should be equal to your combined household income. An additional bonus of adding an umbrella policy is that if you purchase it with the same company as your auto or homeowners (or both), you can receive a bundling discount.

Additional Resources

After your 50s, your 40s will be the time you will statistically pay the least amount for car insurance. You're entering a phase of your life where you're financially stable, a safe driver, and adding more lines of insurance all of which equates to a profitable investment to an insurance company. Because your appeal to companies in this industry is so high, you should always consider the fact you could be getting a better deal elsewhere. It is for this reason exactly, we recommend shopping for car insurance every 6 months.

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Best Car Insurance for 40 year olds

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