Car Insurance by Age

For once, growing up isn't so bad.

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Car Insurance: By the Ages

 

A general rule of thumb in the insurance world is that when a driver ages, their car insurance rate changes too. This has to do with what your age represents to your insurance company. Meaning, insurance companies use this information as a way to predict driving ability. Young drivers being riskier than drivers in their 50s, for example. So, let’s break down car insurance by age — starting first with those teen drivers.

 

Let’s break it down by age:
  1. Teens
  2. 20s
  3. 30s
  4. 40s & 50s
  5. 60s




Teens

If a teen behind the wheel makes you nervous, you can only imagine what an insurance company (who is financially responsible for their actions) feels. On average, teens are over 70% more expensive than the average person to insure. So, if you’re a parent with a teen driver, you understand the struggle of finding affordable insurance for your driver. Let us help you out.

AVERAGE 6-MONTH PREMIUM FOR TEENS ON PARENTS' PLAN

Age

Premium

16

$1,492

17

$1,399

18

$1,284

19

$1,150



Cheap car insurance for teens

In order to really understand who has the cheapest insurance for teen drivers, we decided to take a sample from a few different companies. Outlined here,we discovered Geico was the cheapest insurance company with other metrics constant. Here is our data:

 

AVERAGE COST OF CAR INSURANCE FOR A 17-YEAR-OLD

Car Insurance Provider
Average 6-month premium
State Farm$2,999
Allstate$2,295
Geico$987
Progressive$1,231
Liberty Mutual$1,676

Keep in mind, this data is reflective of one type of profile in locations that most likely don’t represent you. Still, you should use this data as a starting point when shopping for car insurance. Follow our lead and compare insurance rates here.



Other ways to save

There’s no quick and easy way to half your insurance premium if you have a teen. Still, in addition to looking at as many companies as possible, we have some other solutions in mind.

Consider discounts:

  • Safe driver
  • Equipment discount
  • Paid in full discount
  • Paid via bank discount



Consider telematics

Telematics are in-car devices that monitor the way your teen drives in order to develop a more comprehensive car insurance premium. If your teen is an especially careful driver, their age can still hurt them based on the historical data. But with a telematics device, you might be able to save some money.

 

Company

Estimated Savings

Progressive's SnapShot

Average of $130

Allstate's Drivewise

Average of 10-25%

State Farm's Drive Safe & Save

Up to 15%

Esurance's DriveSense

Varies

Nationwide's SmartRide

Up to 40%

Liberty Mutual's RightTrack

Average of 5-30%

For more information on car insurance policies with telematics, see our full guide here.

 

Choose a moderately priced vehicle

While your teen son or daughter may want that brand new ride, it’s not a good idea for your insurance premium. Vehicles with high MSRP driven by an inexperienced driver are major red flags to your insurance company. And they’ll almost always offset their fears of major property and bodily injury payouts with a higher premium. So, if you want to help keep that premium as low as possible, keep your teen on an older sedan or car. Keep the fancy new car for yourself.



Avoid accidents

While this won't be mind-boggling advice, but avoiding accidents as a young driver is probably the most important thing you can do to keep your rates low. Not only do insurance companies charge quite a bit for accidents, but they’ll stay in your insurance record for 3 years. On average, an at-fault accident will raise your premium by an average $308 every six months. And, like claims, most insurance companies will charge you for at least 3 years. So, that $308 will stretch to $1,848. If you’re already paying for a lot more for a young driver, you don’t want to factor in an accident. Drive safe and pay less.

 

AVERAGE PREMIUM INCREASE AFTER AT-FAULT ACCIDENT

Duration after Accident
Premium Increase
Increase at 6 months$308
Increase at 12 months$616
Increase at 3 Years$1,848

 


Look for student discounts

Insurance companies see students with good grades (3.0 or above GPA) as fewer risk takers when it comes to driving. Because of this, they offer some pretty decent discounts for students. On average, your teen could save $207 per year on auto insurance!

 

AVERAGE SAVINGS FOR GOOD STUDENT AND GOOD DRIVER DISCOUNT

GenderAverage Annual Savings
Average Teen$283
Average Male Teen$360
Average Female Teen$207

For more information on good student discounts, see our guide here.

Additional resources

 

Find cheap car insurance for teens now!

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Car insurance in your 20s

Your 20s are big in the world of insurance. Simply by moving from 19 to 20, you save an average of 20% on your car insurance. That’s because you’ve got a few more years of driving and life experience under your belt. All of which makes you a cheaper client to insure, which is good for the insurance companies. Still, there are some tricks of the trade to learn about your 20s in the world of insurance. Let’s take a look.

 

AVERAGE INSURANCE PREMIUMS FOR 20-YEAR-OLDS

Age
Average 6-month premium
20
$1,538
21
$1,231
22
$1,108
23
$1,029
24
$960
25
$824
26
$818
27
$806
28
$796
29
$786



Where can I find cheap insurance in my 20s?

It’s hard to pick one company that will give everyone the cheapest rate. People are too different and insurance is often too specific. But, we still want to get you a starting point when you’re shopping around for car insurance. So, just like we did with our teens, we decided to compare five insurers with a standard user profile across five zip codes (all metrics constant) to determine who has the cheapest car insurance rates. Here are the results.

 

CHEAPEST CAR INSURANCE FOR 25-YEAR-OLDS

Insurer
Average 6-month premium
State Farm$1,142
Allstate$1,107
Geico$884
Progressive$807
Liberty Mutual$2,050


As we stated with our teens, you should consider this data as the first step to shopping for car insurance.



Other ways to save on auto insurance in your 20s

Your twenties offer a lot of unique opportunities to both add to your insurance portfolio and save money. Turning 25, getting married, or adding renters or home insurance can have major impacts on your insurance profile. Let's explore more options to save after you leave your teen years.

 

Continue best practices from your teen years

  • Telematics
  • Moderate vehicles
  • Good driver, good student (if applicable), and safety discounts
  • Drive safely



Bundle insurance policies

Keeping all your insurable interests within one insurer can not only make things easier but can lower your rates (auto and whatever you bundle it with). For your auto rate, you can lower your costs by between $42 and $70 per year (renters and homeowners).

Homeowner Status
Average 6-Month Premium
Renter$735
Condo Owner$718
Home Owner$718
Renter With Multi-Policy$696
Condo Owner With Multi-Policy$658
Home Owner With Multi-Policy$648

 

 

Be smart with your coverage

Unlike fine wine, a vehicle does not grow in value over time but depreciates. So, if you’re driving a paid-off vehicle that isn’t worth very much, the coverage you initially had might not be necessary. Here’s a quick how-to for determining if you still need comprehensive and collision coverage.

  • Determine the value of your vehicle by using Kelley Blue Book and NADA.
  • If the value of your vehicle determined above is less than the rates it costs to add additional, non-mandatory coverage, drop it.
  • If it’s still saving you money to keep these coverages, consider raising your deductible. By raising your deductible, you lower your premium.

*Bear in mind, however, that by raising your deductible you take greater financial responsibility in the event you file a claim.



Be smart with your claims

Car insurance can work as a double-edged sword - the more you use it, the more expensive it will become. If you're considering filing a collision claim after an at-fault accident for your vehicle, consider our advice.

  • Get an estimate from a mechanic for the out-of-pocket damage first.
  • Every insurance company will increase your rates after you file a claim for at least 3-years. Compare the out-of-pocket expense to the average surcharge for a collision claim. Look for your state in our analysis (here). 
  • Consider the surcharge over three years plus your deductible. If it is cheaper to pay out of pocket for a claim, do that.

For more information regarding claims and how they affect your car insurance, see our guide here.

Car insurance and roommates

Living with a roommate is a pretty common thing for people in their twenties. While your insurance company understands that you might be living with other people, they do have some stipulations regarding the sharing of vehicles. It’s important to follow these rules and understand what you are and are not covered for.

If your roommate is not on your policy, they can't use your vehicle.

Because you share a residence with your roommate, insurance companies either want your roommate to be a rated (chargeable) driver or be excluded altogether. Pretty straightforward.



Additional resources

Your twenties embody a lot of change — and that’s reflected upon your insurance profile. For more specific information regarding this period, see our additional resources here.

 

Find cheap car insurance for your twenties now!

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30s

Your 30s are a general continuation of your late twenties; you’re settling down, buying a home, and adding vehicles to your policy. There isn’t a huge difference in your premiums as you age in your 30s — only about 0.5% savings every year. Unlike the changes your experience in your teens and twenties, the reason for this lack of change is because the driving habits of a 32-year-old aren’t that much different than that of a 34-year-old. So, if you’re expecting to save in your 30s, you’ll have to do a bit more work.

Continue best practices from your 20s

  • Telematics
  • Moderate vehicles
  • Bundling
  • Smart coverage
  • Smart claims



How to save on auto insurance in your 30s

While you don’t save much as you age in your 30s, immediately entering your 30s you do see some savings. About $500 between the average amount of 30-year-olds and 20-year-olds. So, take some comfort that while you might not want to turn 30, you see some insurance savings. Outside of simply aging, here are some other ways to save in your dirty 30s.

 

AVERAGE 6-MONTH PREMIUMS FOR 30-YEAR-OLDS

Age
Average 6-month premium
30$735
31$733
32$731
33$730
34$728
35$719
36$719
37$717
38$716
39$716



Shop around

It’s difficult to give company-specific information for 30-year-olds because there’s too much variance in the average profile. Some 30-year-olds are married and homeowners (which greatly affects your premium), while others rent and live alone. So, in order to get the best auto insurance rate possible that fits your driving profile, you should shop around with as many insurers as possible. Use our insurance calculator here to see how much you could be saving.



Additional Resources

 

 

Find cheap rates for your thirties!

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40s & 50s

There are a couple of key ways your premium changes during this time — all of which can bump up your premium. Still, you should maintain what was discussed in previous sections.

  • Bundle any and all insurance policies
  • Use telematics, if possible
  • Chose a moderate vehicle
  • Be smart about filing claims
  • Be smart with your coverage

 

Still, we wanted to offer something new for this time of your life. So, in order to navigate this costly time, we decided to create a family profile and get quotes from five different insurers across five different zip codes. Here’s what we found.

 

AVERAGE 6-MONTH PREMIUM FOR MARRIED COUPLES

Insurance ProviderAverage 6-month premium
State Farm$1,966
Allstate$1,137
Geico$651
Progressive$746
Liberty Mutual$1,078

This information, methodology here, pertains to life without younger drivers. As you can see, your 50s aren't so bad in the world of insurance. If you’re married and own a home, you can expect your rates to be an average of $1,116 across the companies we surveyed. Geico was the cheapest with Progressive in a close second. Next, we added the teen drivers to the picture. One male and one female driver at 17-years-old. Here’s how the rates changed.

 

AVERAGE 6-MONTH PREMIUM FOR FAMILIES

Insurance Provider
Average 6-month premium
State Farm$4,965
All State$3,432
Geico$1,638
Progressive$1,978
Liberty Mutual$2,753



On average, adding your teen drivers to your policy increases your policy by over $1,800 — or $3,600 per year. As you can imagine, savings on auto insurance during this time is pretty important. Let’s get you started.



How to save

The big thing during this time, and even into your 60s, is learning how to save with young drivers (kids) on your policy. As we stated previously, young drivers are seen as risk-takers to insurance companies. They’re more likely to get into accidents, receive citations, and file claims. So, insurance companies protect themselves by charging higher rates. What this means to you is you need to be a little craftier when it comes to auto insurance.



Keep your teens on your policy

Because of teen driver’s tendency to get into accidents, which would affect everyone on the policy's rate, some brokers recommend having teens get their own policy. This is actually a bad idea for a couple of reasons. First, having responsible drivers on a policy help mediate the risk posed by the less experienced drivers. Meaning, the amount of premium your teen costs alone would be much higher than if they were on your policy. Most teens aren’t able to pay the $4,957 (average cost in 2016 if they're alone) so that will most likely fall on you. Simply put, it’s cheaper to keep them on your policy.

Next, lots of insurers won’t allow you to have two separate policies within the same household. From their perspective, it’s too likely to for vehicles to be shared and so they like for every eligible driver to be covered (charged).



Added discount to consider: Distant Student

If your young driver is in college over 100 miles away from your residence, your insurance company might give you what’s called a Discount Student Discount. Basically, your premium is lowered based on what your insurance company sees as a lowered risk for your young driver not using the vehicle as much.



Additional resources

 

Compare over 200 insurance companies at once!

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60s

Your sixties can be a time of great flux for insurance consumers. Many people retire, sell their homes to downsize, boot their younger drivers from their policy, and invest in additional forms of insurance. Because of this, you probably need some guidance on how to maneuver your insurance policy to maximize your savings and keep your premiums low. Let’s get started.



How to save

Although your policy changes as you age, the general ideas of saving on auto insurance remain the same. So, continue with our earlier expressed ideas:

  • Bundle any and all insurance policies
  • Use telematics, if possible
  • Chose a moderate vehicle
  • Be smart about filing claims
  • Be smart with your coverage



Car insurance and kids

If you have children, this might be the time you’re wondering what to do about their insurance. Can you keep them on your policy? Should you remove them? Let’s explore.

Remove your kids from your insurance policy: You need to remove your children from your policy if they no longer live in the household and drive their vehicle regularly. Insurance is zip-code specific — so, it needs to be written and priced for your zip-code. If your child lives in a different zip-code, they need their own policy.

Keep your kids on your insurance policy:If they live in your household and use your vehicle, you may keep them on your policy. Unlike things like healthcare, there is no age when you’re no longer allowed to cover your children if they live with you.

If you own the vehicle but your child drives it at their residence, you can be listed as an “additional interest” on the vehicle. Meaning, while your daughter or son is the primary user of the vehicle, you still have an invested interest in it. Keep in mind, any insurance company doesn't care who pays the premium. So, if your son or daughter doesn't live with you and thus can't be on your policy but you'd still like to pay their premium, speak to an insurance agent at their company.

 

Additional lines of insurance



Additional resources:

While all this seemed like a lot of information, we have even more tips for navigating the insurance world at 60! See our articles below:

 

Find the best insurance companies in your 60s!

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Additional Resources:

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