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How Does Age Affect Car Insurance?

age and auto insurance

Insurance companies charge inexperienced drivers higher rates. Teenagers are billed the highest, as they are the most likely to cause accidents due to reckless driving and unnecessary speeding. Statistics show that one in four young drivers are likely to cause an accident, therefore they pose a huge risk to the insurer. And this is why American teenagers aged 16 to 19 pay an average of around $3,000 a year for auto insurance, while the 20-24 age group is billed a bit over $2,000.

Average rates will reach a somewhat reasonable level when you turn 25 and decrease gradually until you are in your forties. The difference isn’t significant though, the 25-29 age group pays on average only $100/year more than someone in the 40-44 interval. Rates tend to increase once you are over 60 because, even though you are likely to be a responsible driver, reflexes slow down.

A lot of insurance companies have special promotions for responsible teenagers. Esurance, for instance, understands that kids don’t have a lot of money, so they offer consistent rebates if you can prove you are a good student (a GPA of at least 3.0) and are enrolled full-time as a student in a high school, college or university. Similarly, they offer to help aged drivers who pass a mature driver safety course and meet certain age criteria.

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