Car insurance is often viewed as a necessary evil. Nearly every state in the nation requires drivers to carry minimum levels of coverage, policies are typically confusing, and shopping around for competitive rates is time consuming. Making matters worse, rates are affected by a combination of factors outside of your control.
Insured drivers making a claim after an accident are familiar with rising premiums. Research from insuranceQuotes.com finds that the average American driver pays 41% more for car insurance after making just one claim. Drivers making a second claim can expect to pay almost double for car insurance compared to claim-free drivers. However, your own driving history is not the only spark for higher insurance costs. Factors like marital status, gender, and age all play a significant role.
If you’re young and single, get ready to mingle with higher rates. On average, a married 20-year-old pays 21% less than a single 20-year-old for the same insurance policy, according to a new report from insuranceQuotes.com. In fact, the penalty for being single rides with you until about age 30. At age 25, the average marriage savings is down to 7%, and declines to around 2% at age 30 and beyond. Hawaii is the only state where insurance companies are not allowed to factor marital status into their rate calculations.
The extra testosterone running through some engines comes at a price. At 20 years old, men pay 22% more than women for the same coverage. This is because young men generally display riskier driving behavior than young women. For example, 67% of distracted tickets and 84% of impaired driving tickets are issued to men. Nonetheless, the gap in costs narrows to just 3% at age 25, while men ages 30-50 actually have a lower average insurance premium than women of the same age. At age 50, it reverses as women pay slightly less than men. Hawaii, Massachusetts, and North Carolina do not allow insurance companies to factor gender into their rate calculations.
Age may just be a number, but every state besides Hawaii is allowed to factor it into insurance premiums. Growing older helps lower your insurance costs every year up until age 60, with the sharpest drop taking place from age 20 to 25, when rates decrease 41%. Between 25 and 60, rates drop another 18%. A 75-year-old driver pays 17% more than a 60-year-old driver, but still pay 43% less than a 20-year-old driver. In California, age cannot be explicitly included, but years of driving experience can be included.
“Plenty of families worry about when grandma or grandpa should stop driving, but the data shows that drivers in their teens and early 20s are much more risky,” explains Laura Adams, insuranceQuotes.com’s senior analyst. “Young drivers, in particular, can save money by qualifying for good student discounts, signing up for pay-as-you-drive programs and completing driver safety courses.”
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