What Influences Car Insurance Rates And Why?

Impact of Age

As one can imagine, an older and more seasoned driver is less likely to have a car accident than someone who has only been driving for a few months. This is the ideology many insurance companies believe when insuring drivers across multiple age groups and determining the impact of age. Younger drivers are seen as more risky customers than drivers who have been driving for a few years. Therefore, insurance is more expensive for younger drivers, and for most drivers, insurance premiums don't begin to decrease until they turn twenty-five years old. However, elderly drivers also pay higher insurance rates due to their physical limitations, as these can restrict them from driving properly or reacting as quickly.

As far as for younger drivers, many studies have shown younger drivers tend to be distracted much easier when driving. This leads to more accidents among younger age groups, particularly when combined with inexperience. As a result, younger drivers file more insurance claims, so insurance companies raise the premium to compensate. However, it is crucial to note insurance companies cannot distinguish customers based on age in California, Hawaii, and Massachusetts.

Continue reading to discover how gender may influence insurance rates.