The Effect of Age in Car Insurance Rates


Car insurance rates are affected by a lot of factors. These factors determine how much you are about to pay. Some of these factors are gender, vehicle model and type, coverage, and your driving record or driving history. Still, the age of the policyholder also determines the rate of the premium. Sometimes car owners find this category complex and fail to understand it. This article is about to answer why and how age affects the premium you pay in car insurance. But before that, it is important to understand the functions of other factors first.

The harsh truth is that you are required to have car insurance as long as you are a car owner, regardless of the age bracket you are in. Car insurance is a requisite according to law for you in order to drive on the roads and highways of America. This is to ensure the protection of drivers and passengers every time they are to drive. This leads to the car insurance being a necessity for drivers; though it may seem to be added expenditure, it still pays for the money it costs by protecting you.

This is where the importance of your premium rates comes in. Always remember that insurance providers judge your premium depending on your driving style. It matters if you are the safe driver who obeys traffic rules or if you have a high tendency to violate these rules or if you are most likely to hit or get hit by another vehicle when you are on wheels. This is termed as the ‘risk factor’ of the driver. When the companies see the driver as riskier then the company decides to heighten up the premium rate so the company would not go broke. Likewise, less risky drivers get lower premiums.

Insurance providers are also businesses. They have to make profit, which is why they would not do things that could jeopardize the profit they will get. Putting this into consideration, a risky driver would be more involved in accidents. With more accidents, the companies need to release more money, which would in turn be deducted from the company’s profit. This is the main reason why risky drivers get higher premiums, so the company would not hit bankruptcy.

This also justifies the effect of age in the rate of premium you pay. Companies actually look into drivers and categorize them in age brackets. In the event that the driver is a teenager, the company sees it as a riskier driver because teens are stronger magnets of accidents. Teenagers are riskier drivers because they attract more accidents than grown-ups, and that is statistically proven. It could also be because of being a first-time driver, and being less responsible than adults, and being too excited into driving that they become involved in road accidents.

Cheap car insurance is easily accessed by young adults. This particular bracket ranges from ages 25 – 50. Companies consider the young adults to be responsible enough to drive safely and follow traffic rules and regulations whenever they hit the road. This also is a sign to insurance providers that the driver has already earned enough experience to avoid accidents as much as possible.
However, when the driver reaches an age above 50, they are again considered as a risky driver because these car owners are more prone to illnesses and disabilities which strain them from being more careful in the road. This causes them to be more involved in vehicular accidents.

Just when you think you have known a trick to obtain cheap car insurance, pay a visit so you can receive help and answers in all your car insurance questions and also acquire free insurance quotes.