Young people may wonder why they pay higher insurance rates than older age groups. It has to do with risk on various levels for the insurer and the inexperienced driver who hasn’t driven enough to face and overcome challenging traffic situations. Even so, what happens when you turn 25? Hasn’t the driver had enough experience by then to establish a safe driving record?

Your age does matter, but it’s one of several factors that determine monthly premiums. Avoiding accidents and violations is the best way to maintain a good driving record, which actually has more impact on rates than your age.

Why Age Is an Important Factor?

Traffic statistics tell the story of which age groups suffer the most accidents. The 16 to 19 age group has a particularly high rate of fatal collisions, according to the Insurance Institute for Highway Safety (IIHS). This teenage group that represents the youngest legal drivers on the road is four times more likely to get involved in an accident of any kind compared to drivers 20 and over.

Consequently, younger drivers pay more expensive premiums unless they have outstanding driving records. However, it’s important to note that rates also go up for seniors in their late 70s as they get into more accidents than middle-aged drivers due to impairment of sight, bad reflexes, and inaccurate judgment.

Teen drivers can expect to see drops in their premiums starting around age 18. By the time they turn 21, they should be paying several hundred dollars less in insurance per year than when they started. From then on, the policyholder should see continued reductions every year for several years, assuming they maintain a spotless driving record.

Is Gender a Factor for Determining Insurance Rates?

Yes, gender is a factor in determining insurance rates due to consistent statistics that show young men are more likely to get involved in an auto accident than young women. Men tend to spend more time with vehicles than women, increasing their accident risks. Another consistent statistic is young men tend to rack up more traffic violations than young women. Young men are also more likely to drive higher-risk sports cars and under the influence of alcohol.

Much of what you may have heard about 25 being the age of automatic lower insurance rates is misinformation. Your insurance rates depend on other factors as well, such as your driving record, location, etc. Contact our experts at Scautub Agency to learn more about your auto insurance coverage options. We are here to assist you with all your car insurance needs.