Normally 16, 18, 21 are much more significant in someone’s life cycle for obvious reasons. However, twenty-five is a milestone age in terms of automobile insurance. You come across this number many times in schedules and even on hire contracts. For example, some policies only allow occasional drivers who are over this age. So, does that mean premiums go down too? Generally the answer is “yes it should”. However, there are no hard and fast rules that have become the norm in the industry.
You can see it confirmed in some related websites and publications that by turning 25 you may move into a more mature and lower risk group. That is why you may start getting better rates according to esurance although they say that they cannot generalize this statement. For example, you cannot expect quotes to sharply fall just because you turned this corner, especially if you have only couple of years of experience. This makes sense since at this age you are expected to be a good driver with years of experience. You should see a little price drop providing you meet this general assumption.
Furthermore, people in the industry reports from experience that generally, car insurance rates fall. This belief is tested by using online quotes and it is found that premiums can decrease as much as twenty percent. There are a few similar studies that confirm this directly or indirectly..
Why Does Auto Insurance Go down at Twenty Five?
Make no mistake that age is one of the factors in premium calculations and the younger a driver is the higher it gets. They are a huge exposure for underwriters because of certain tendencies and inexperience in life and motoring. In time they learn to slow down and observe the road ahead and others. The ones who learn from near misses turn out fine by this time.
25 is commonly agreed upon to be some sort of crossover point where you are accepted to be statistically more reliable. Actually it is more to do with how risky drivers between the ages of 16 – 24 are. And that is a year shorter than our magic number, as you might have noticed. Many reports by organizations such as the Insurance Institute of Highway Safety (IIHS) and National Highway Traffic Safety Administration (NHTSA) confirm that drivers who are younger than 25 are higher risk (again). Of course, you don’t arrive to this age overnight and that learning curve makes you a wised up motorist who deserves rate cuts.
Listed Drivers’ Ages Affect Vehicle Insurance Premiums
It is a statistically significant data for underwriters. When they look at the accident and claim numbers they see that teenagers are topping the charts. They cause a lot more accidents and these tend to be a lot more serious and fatal. Therefore, it is no surprise companies like to stay away from them unless they can charge high prices for accepting them.
Another problem with teenagers is that they have no history to tell if they are good or bad. As they start building good records they see prices dropping gradually. It is significant because rates drop more once it is reached. Also, most companies may look to it when they are considering a particular risk. For example, some of them may not consider anyone under with sports cars. That makes their preference pretty clear and just being accepted tells you that otherwise the charges would have been ridiculous.
We Believe 25 is Significant for Automobile Insurance
We are convinced that you are not wrong to expect some discounts after passing this milestone. Of course, the size of savings will vary depending on experience and history as well as the carrier. For example, carsdirect believes that male drivers should see about 20% premium decrease at 25 while female ones would only see 12 – 15%. This makes sense from risk point of view since young males are proven to be much more perilous than females.
Furthermore, it may influence insurability in some cases. For example, most of them wouldn’t cover people under twenty-five years old with certain sports cars no matter how good drivers they are.
Does That Mean Youngsters Cannot Get Discounts?
Companies always look for signs and take them into account. For example keeping good grades at school can qualify them for much appreciated discounts. There may also be other savings that everyone can claim regardless of maturity. For example, paying the full amount at the start or completing an advance course would qualify them for discounts too.
Shopping around is another good way of bringing the premiums down no matter what the circumstances are. There could be sizeable differences between auto insurance quotes. It is an open market and every company sets own prices. While one is very cautious about youngsters the other may make it their business to go after this group of people predominantly. It is your job to search for them and why not start right here.