The good news for young drivers is that their car insurance quotes will go down as they get older. The bad news for everyone is that rates eventually go up again. We’ve all heard that young people pay more for auto coverage. But NerdWallet dug into the data to show how car insurance for older drivers can also come with high rates.
How auto insurance rates change
NerdWallet looked at rates from large insurance companies for a typical New York state driver each decade from age 20 to 90. We found that rates start out high, bottom out at age 60 and then creep up again.
Insurance rates by age in New York
|Age||Average||Difference from lowest|
NerdWallet researched rates from six large auto insurers for men and women in 10 New York ZIP codes. Rates shown are for liability injury limits of $100,000 per person and $300,000 per accident; property damage limits of $50,000; personal injury protection; and comprehensive and collision coverage for a 2012 Toyota Camry. Your own rates will be different.
Why rates change
Insurance companies base auto insurance quotes on their experience with different types of cars, locations and drivers. Driver factors include driving record, marital status and, yes, age. Why age? Because very young and very old drivers get into more accidents.
Accident rates are 2.2 times the national average for drivers up to age 20 and 1.7 times the average from 21 to 24, according to the most recent report from the National Highway Traffic Safety Administration. Accident rates are actually below average for people above age 74, although these statistics don’t consider the number of miles driven, and older people tend to drive less.
Statistics from the Insurance Institute for Highway Safety, which do account for miles driven, show fatal accident rates are more than twice the average for drivers under 30 and for drivers ages 80 to 85. For drivers over 85, the rate is nearly five times the average.
Hawaii and North Carolina ban factoring age into auto insurance quotes, although North Carolina allows a surcharge for drivers with fewer than three years of experience.
What you can do about it
While you can’t age faster or turn back time, there are things drivers of all ages can do to lower their car insurance quotes.
Younger drivers can save money by taking a driving course, getting good grades (if they’re still in school), reducing their liability coverage limits if they don’t have many assets, and forgoing comprehensive and collision coverage if they drive an old car that isn’t worth much.
Those who think they’re safer than the average young driver might want to look into usage-based insurance, which provides savings to those who drive limited miles, avoid risky maneuvers and don’t drive at night.
Older drivers can save money by taking a safe-driving class, buying usage-based insurance and dropping comprehensive and collision coverage on older cars. Also, make sure your rates reflect any decline in how much you drive — you might be eligible for a low-mileage discount.
The key is to remember that, while risks change at various ages, so do insurance needs. Your car insurance quotes should reflect that.
Image via iStock.