For once, growing up isn't so bad
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.
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 a Parent's Plan
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 actually discovered Geico was the cheapest insurance company, if you kept all other metrics constant. Here is our data:
Our Findings: Car Insurance Costs for 17-year-olds
|Location||State Farm||Allstate||Geico||Progressive||Liberty Mutual|
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.
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.
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 an telematic device, you might be able to save some money.
|Progressive's SnapShot||Average of $130|
|Allstate's Drivewise||Average of 10-25%|
|State Farm's Drive Safe & Save||Up to 15%|
|Nationwide's SmartRide||Up to 40%|
|Liberty Mutual's RightTrack||Average of 5-30%|
While your teen son or daughter may want that brand-new SUV or truck, 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 SUV for yourself.
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 $306 every six months. And, like claims, most insurance companies will charge you for at least 3 years. So, that $306 will stretch to $1,837. If you’re already paying for a lot more for a young driver, you don’t want to factor in an accident. Stay safe, pay less.
Average Increase in Premiums for At-Fault Accidents
|Increase at 6 months||Increase at 12 months||Increase at 3 Years|
Insurance companies see students with good grades (3.0 or above GPA) as less 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
|Average Teen||Average Male Teen||Average Female Teen|
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 break it down.
Average Year Premium
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 5 insurers with 1 user profile across 5 zip codes (all metrics constant) to determine who has the cheapest car insurance rates. Here are the results.
Our Findings: Car Insurance for 25-year-olds
|Location||State Farm||All State||Geico||Progressive||Liberty Mutual|
As we stated with our teens, you should consider this data as the first step to shopping for car insurance.
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.
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 it between $73-142 per year (renters and homeowners).
Average Annual Savings in 2016
|Renters Savings||Homeowner Savings|
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.
*Bear in mind, however, that by raising your deductible you take a greater financial responsibility in the event you file a claim.
In keeping with this idea, being smart with your claims can save you quite a bit in the world of auto insurance. If you’re thinking about filing an at-fault claim (for example, a collision claim), you should think about it over 3 years – just like being in an accident (see teens). For example, if you live in Alabama, where the average car insurance rate in 2016 was $1,102, at at-fault accident would raise your premium to $1,592 (a $490 increase). Now, most insurance companies will charge you for claims for 3 years. So that $490 will become $1,470 plus your deductible plus any your actual insurance premium.
So, when thinking about keeping your premium low and filing a claim, you should consider how much the damages of your vehicle are (by getting an estimate at an auto-body shop) versus what you will pay if you file a claim.
Living with a roommate is a pretty common thing folks 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.
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.
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.
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 .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.
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 Annual Premium
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.
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.
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 5 different insurers across 5 different zip codes. Here’s what we found.
Our Findings: Car Insurance for Married Couples
|Location||State Farm||All State||Geico||Progressive||Liberty Mutual|
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 drivers at 17-years-old. Here’s how the rates changed.
Our Findings: Car Insurance for Families
|Location||State Farm||All State||Geico||Progressive||Liberty Mutual|
On average, adding your teen drivers to your policy increases your policy by over $1800 — or $3600 per year. As you can imagine, savings on auto insurance during this time is pretty important. Let’s get you started.
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.
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).
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.
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.
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:
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 break it down.
|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.||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 insure 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.
The world is your oyster after you retire. It's to buy that boat or RV you've always wanted! And yes, we have some advice for you!
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:
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