When Does Car Insurance Go Down?

When does car insurance go down? This is a common question, especially for new drivers. Car insurance is unique in that the cost varies based on circumstances that are unique to each motorist. When your circumstances change, rates may increase or decrease accordingly. Reviewing the factors that influence the price of car insurance can help you figure out how to get a better rate on your policy.

Age

According to Money Under 30, The Zebra, The Balance, and Policy Genius, most people notice that as they get older their auto insurance policy cost decreases. After you turn 25, your insurance company should provide a lower rate each time you renew your policy as long as you have a safe driving record without accidents or claims. Teens can get a cheaper rate by joining a parent's policy as a new driver or by taking a driver education course.

Why do new drivers, teens, and other young people have to pay significantly higher car insurance rates? This discrepancy is based on the fact that these drivers are at much higher risk for a crash and are thus more expensive for the company to insure. However, even younger drivers will notice that their policy cost decreases each year. The biggest drop typically happens between ages 18 and 19. Premium prices decline slowly between ages 20 to 24 and significantly between ages 25 and 30.

After 30, the decline is small but steady through age 60. As you enter your senior years, rates begin going up again after 65. The physical changes of old age are associated with a higher risk of accidents. Drivers older than 70 are more likely than younger drivers to cause fatal car accidents. However, seniors can also ask for age-related car insurance discounts.

Credit Score

According to Money Under 30, The Zebra, The Balance, and Policy Genius, drivers with below average or poor credit scores should get multiple quotes to try to find a good auto insurance rate. You can also request quotes from companies that do not use your credit score as a factor in your premium price. That strategy will likely result in cheaper rates for those who are attempting to repair credit. The Balance also notes that if your credit score improves, you should shop around to potentially qualify for a significantly lower rate.

Driving Record and Safety

According to Money Under 30, The Zebra, The Balance, and Policy Genius, you can often qualify for a lower auto insurance premium by purchasing a car that boasts exceptional crash test scores or a robust selection of safety features.

The Zebra, The Balance, and Policy Genius note that most insurance companies provide special pricing for drivers that go for several renewal periods without a claim. When you get a quote, ask about preferred rates, good driver discounts, and claim-free discounts. Conversely, drivers who have many incidents will pay higher car insurance rates. Expect sky-high premiums if you have a history of auto accidents, traffic tickets, speeding violations, or arrests for driving under the influence of drugs or alcohol.

According to The Balance and The Zebra, one auto insurance claim in which you were at fault can affect your rates for at least three years. Multiple claims, especially several incidents within a year or two, will classify you as a high-risk driver and significantly raise your premiums. Money Under 30 notes that taking a driving safety course is a good way for drivers with a negative driving history to lower high premiums that come from their high-risk category.

Insurance policy rates change frequently and often vary dramatically among insurance companies. The Zebra, Coverhound, and The Balance recommend seeking a new insurance quote every six months, especially if you feel like you pay too much for your current policy.

Lifestyle Factors

Money Under 30, The Balance, and Policy Genius note that if you don't drive very often, you may want to seek an insurance company that offers pay-as-you-go policies for infrequent motorists. With this type of program, you have to install a monitor in your car that logs your miles and then charges you for insurance only for the amount of time that you used the vehicle.

If you are married and/or have children of driving age, take advantage of multiple driver discounts. Typically, you receive a lower rate by adding multiple drivers to a single policy rather than having a separate policy for each family member, according to Money Under 30 and The Balance. Money Under 30 also notes that single drivers tend to pay up to 50-percent more for auto insurance than married drivers do. This can be a helpful way to save on your policy if you have some past violations but your spouse has a good driving history.

Coverhound and Policy Genius indicate that if you drive a friend's car or a friend drives your car, your auto insurance policy should cover damage that occurs. However, if you have excluded this individual from being covered by your policy, they would not be covered while driving your vehicle, and you should not lend your car to them.

Policy Genius also recommends asking about other available discounts. You may qualify for lower prices if you bundle your home, auto, and other insurance policies. Discounts for vehicle safety devices, good driving records, and good grades are also common. The Balance notes that discounts may be available if you are a member of a professional organization or alumni association.

Gender

According to Money Under 30, The Zebra, and Coverhound, car insurance premiums typically cost less for women than they do for men. Money Under 30 attributes this difference to the statistics indicating that men are more likely to be arrested for DUI and to get other types of traffic tickets. Men also more commonly own sports cars and other high-risk vehicles that are costly to insure. However, female drivers between 30 and 40 tend to have slightly higher premium rates than men of the same age.

Understanding all of the factors that influence insurance rates will help you evaluate your current policy and find the best deal possible.

References

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