Does Age Affect Car Insurance Rates?
With most products that we buy during the course of our lifetime, the price we pay is not based on the age of the person making the purchase. For example,
if two people who are ten years apart go into a grocery store to buy a gallon of milk, they will both pay the same amount. Car insurance is certainly the exception to this rule, as the age of a driver will play a big part in determining the cost. Let’s take a look at the role that age plays in the price of insuring a car.
Why Does Age Affect Car Insurance Rates?
Insurance is based on the concept of risk and carriers set their rates based on the probability of a claim occurring with an insured person or thing, such as a building. The higher the risk of an adverse event taking place, the more the insurer will charge the customer. Conversely, if the risk of financial liability on the part of the carrier is low or minimal, the premium quoted will reflect that as well.
Age happens to be one of the biggest factors that insurance underwriters consider when it comes to setting auto rates. Generally speaking, young drivers and older motorists tend to pay the most for car insurance because the risk of an accident happening to them is statistically higher as compared to other drivers.
Insurance premiums are usually the highest for drivers between the ages of 16-25, but will drop significantly after that, assuming a person has a clean driving record. Statistics show that teenage drivers are up to three times more likely to cause an accident than older people are.
In addition, motorists who are 65 or older tend to pay much more than drivers who are just a few years younger than they are. Another rate increase will take place at age 75, as these drivers are more prone to being involved in accidents. This is due to the fact that as we age, our eyesight and reflexes get weaker, which increases the risk of driving problems.
Saving Money On Auto Insurance
Regardless of your age, it is always a good idea to look for ways to save money on car insurance. Younger drivers can sometimes get a discount for being good students. So if there is a young person in your life who is about to get their license, tell them to hit the books! In addition, senior citizens who complete a safe driving course can also be eligible for discounts.
To Wrap Things Up..
It may not seem fair that insurance companies can charge different rates based on one’s age, but statistics have proven that both younger and older drivers have more accidents than others do. For insurance companies, it is all about the risk a driver poses to them, with regard to paying out a claim. Regardless of age, all drivers should shop around for the best available rates and also take advantage of programs such as good student discounts and safe driving courses if they can.
For more information on our auto insurance policies in the Chicagoland area, visit Insure on the Spot today!