Car Insurance for Someone Under 25

Buying car insurance for someone under the age of 25 is just like buying insurance for someone who has more driving experience.

The only real difference is that younger drivers may have to spend more time shopping around to find companies with competitive pricing in the high-risk marketplace. Luckily, there are respected companies that welcome young drivers by charging them fair rates.

For first-time car insurance consumers, it’s important to understand how rates are calculated and why your age can have such a dramatic effect on what you pay for the same amount of coverage.

Enter your zip code above to find cheap car insurance rates for teenage drivers!

Not only do you need to understand how rating factors work, it’s also important to learn how to save money on your insurance. Here’s a consumer guide to help:

Why does age have such a drastic effect on your car insurance rates?

 

It might feel like a discriminatory practice, but most states allow insurers to use an applicant’s age to determine how much the driver needs to pay for coverage.

In the states where using age is prohibited, insurers get around the rule by considering how many years the driver has been licensed to place the applicant into a risk class.

If you have a clean driving record, it’s only natural to be upset when you learn that you’re still classified as a high-risk driver just because of your age.

If you’re a male driver under the age of 19, you’re probably in the riskiest and most expensive group just because of accident statistics.

How does your age affect risk?

While your rates are personalized, insurance companies look at group-based statistics to predict claims.

Since studies show that teens and young adults have more serious accidents that lead to injury or damage, the insurance company much charge drivers in this demographic more.

As time passes, inexperienced drivers will see their rates go down as long as they are safe.

What other factors will be used to calculate your rates?

Not only do companies consider your age and your driving experience, they will consider dozens of other factors that are all used to indicate how likely you are to have a loss.

The carrier has a base rate which will fluctuate as each factor is considered.

Some of the risk factors that are used to personalize rates include:

• Driving record within the last three to five years
• Accident history within the last three years
• Vehicle type, size, safety rating, and vehicle safety features
• Credit rating (only considered in some states)
• Annual mileage in each vehicle
• Driver assignments
• How a vehicle is driven on a regular basis (commute, business, or pleasure)
• Occupation
• Insurance history

How much more will you pay for auto insurance when you’re young?

 

Premiums vary by carrier and by state. In each and every state, carriers that have a business license to sell auto insurance have to file their rates for approval.

This process was put in place to ensure that consumers aren’t overcharged. If the base rate is justified in each rating group, the company will be approved.

If a driver under 20 is added to an existing policy, it will lead to an average premium increase of 80 percent.

Increases for drivers 20 to 25 are typically around 40 to 50 percent. Is a young driver is going to buy their own insurance, their premiums depend on all of the rating factors.

Drivers who are buying their own insurance under 19 pay exorbitant rates with most carriers.

When do your rates start to drop?

Your rates won’t stay high forever. The key to getting a break in your premiums is to keep a clean driving record.

As long as you don’t get into accidents or get cited for moving violations, you should see a steady drop in your rates each year.

One of the more dramatic drops will be when you have three years of clean driving experience because you’ll receive a Good Driver Discount.

After three years, the next drop is when you have five years of experience.

Gradually, after five years your rates will continue to get lower until you get nine years of safe driving experience with continuous auto insurance.

Is it better to stay on your parents’ insurance policy?

If you live at home with your parents or they are on your registration, it’s in your best interest to combine your insurance for lower rates.

Being on a policy with your parents will qualify you for discounts like multi-car and multi-line, which all have a big impact on rates.

Why is it so important to shop around for coverage when you’re under 25?

 

Insurance companies like to target niche markets. Some target people with serious moving violations and others target young drivers under 25. Shopping around will help you seek out the companies that have fair pricing in your niche.

Comparing insurance premiums can take a lot of time when you’re 25 or younger. If you want to use your time wisely, enter all of your personal information into a rate comparison tool online.

After entering your home zip code, you’ll be able to look over instant local insurance quotes.

Enter your zip code below to compare car insurance rates from multiple companies at once!