Young drivers need quality auto insurance to protect themselves and their investment in their vehicles. Parents shopping for insurance with their teenagers will discover that the offered rates are different from what they pay themselves. Insurance companies use gathered data to determine the risk level of every driver, and thus, the auto insurance premiums they offer. Young drivers are judged by the following unique factors that heavily impact their offered premiums:
1. Your age
For young drivers in particular, this is one of the biggest factors car insurance companies use to determine the car insurance rate they offer. As teenagers, drivers are young and inexperienced, which raises their risk of needing to make an insurance claim. This makes their car insurance more important, but also more expensive. Teen drivers can expect to see this rate lower when they turn 20 or 21 years old, and again when they turn 25. As drivers grow older they can expect their rates to continue to go down until they reach their 50s, and then rise as they approach their 70s.
2. Personal driving experience
A speeding ticket will raise your car insurance rate. Meanwhile, a long history of safe driving will lower your premium. For young drivers who don’t have any experience to be judged on, car insurance companies will raise the rate until they have more data to judge. If you’re just starting out on the road you’ll be charged a higher fee, but you can expect that to lower as you get older if you continue to drive safely.
3. Gender
Most people are unaware that gender can impact auto insurance premiums, but it’s true for young people. Male teenagers pay a great deal more for car insurance than female drivers. This is because many car insurance companies have decided that male teenagers take more risks while driving than female teenagers and they decide how much to charge based on this. It may not seem fair, but your gender is likely a factor to keep in mind when evaluating car insurance costs.
4. How much you drive
If you don’t drive a lot, there’s a lower chance of needing to make an insurance claim, which means you’re at a lower risk for the insurance company. A driver who needs to travel an hour to their school and another hour to their job every day is going to be charged a higher rate. Insurance companies will get an idea of this based on the mileage gained by the driver every year. This factor influences the offered premium more in some states than others. For example, California drivers can expect this to raise their premiums considerably.
5. Vehicle history
There’s a stereotype that young drivers tend to drive older cars. This may happen because it’s more affordable for the young driver or because a parent passes their older vehicle down. Fortunately for the young driver, this may help lower their insurance premium. An older car is cheaper to fix so car insurance companies charge less. The age of a car, make, and model will all impact the insurance premiums.