First-time auto drivers usually pay higher premiums than older, experienced drivers. The rates for auto insurance premiums are set by each state’s insurance requirements. It’s essential for young drivers to buy enough insurance to protect them in case of an accident or emergency. It’s a good idea to learn the differences between liability and comprehensive insurance and how much it will cost you each month. Most states have mandatory minimum laws on insurance requirements. Read on for specific factors that can impact auto insurance costs for younger drivers:
1. Your age
Drivers under the age of 25 usually pay higher premiums for auto insurance. Drivers in their teens and early 20s generally pay higher premiums. Statistically, drivers under the age of 25 are more likely to be involved in an accident than drivers that are older, making them harder to insure. When drivers are older, they’re not as much of a risk, and premiums are lower.
2. Personal driving history and experience
Accidents, traffic tickets, and whether you’ve ever been charged with inebriated driving reflect what you pay for auto insurance. If you file a claim, your insurance rate could go up by nearly 50 percent. Research indicates that unlike millennials, Gen z drivers focus more on cars that suit their lifestyle and that they are more likely to use public transportation. This means that they typically have less driving experience which can be reflected in their insurance.
3. Your gender
Most insurance companies charge male teenage drivers 25 percent more for insurance than female drivers. When a woman under 25 is the primary driver, insurance companies assume it’s less likely that there are multiple drivers than with a male driver. Studies on driving habits indicate that males tend to have more accidents compared to female drivers. Men usually drive further than women. Younger male drivers under the age of 25 tend to be more aggressive on the road.
4. How much and how far you drive
Whether you drive your car for work or leisure could affect the amount you pay for car insurance. Some auto insurance companies refer to this as pleasure use. The number of miles that are put on your car can be reflected by how many drivers are in your family. A driver under 25 may drive to and from work but are more likely to work closer to home. If your car is used primarily for leisure, you may pay less for insurance. However, if you use your car to commute to work, you’ll be on the road more and pose a higher risk.
5. Your vehicle’s history
Newer cars have higher value and cost more to insure. Additionally, the make and model of the car is a consideration since some models are likely to have repairs that are expensive. If you’ve been in an accident and your car is totaled and could be salvaged, it may be considered to be a higher risk. When a car is salvaged, it means that it was able to be repaired, inspected at a state inspection center, and declared driveable. Many large insurance companies won’t insure a salvaged car. However, you may be able to buy a policy with a small, local company.
