It’s an unfortunate fact of life that your age can affect your car insurance rates. Young drivers face the highest rates because of inexperience and higher accident rates, with rates decreasing over the years. Some people experience an increase in rates in their senior years. Whatever your age, you can use mitigating factors to help bring rates down even if you can’t fight the rating system.
Young Drivers: The Highest Rates
Without a doubt the highest insurance rates are handed down to drivers who are between 16 and 25 years of age. This age group has a 41% higher rate of claims, according to major insurer Aviva, so insurance companies protect themselves against having to pay out those claims by charging them higher rates.
Stats Canada’s 2011 numbers, the most recent available, show that the age groups of 15-19 and 20-24 have the highest rates of traffic fatalities. This too affects how much these age groups will pay for rates.
One perk that drivers of this age have access to is a Good Student discount, available from most insurance companies. This, along with taking a driver education class, is the most substantial discount available to young drivers from many companies, and can make a pretty good dent in those high rates. The good student discount usually requires that you maintain a B average, or 3.0 GPA, and is available to high school and university students.
Into Adulthood: Rates Improve
From the age of 25 on, most drivers will see a decrease in their insurance rates, provided that they have kept a clean driving record.
Rates for this age group are the highest for single males, as they have a higher rate of collisions. In fact, on average men pay more over a lifetime for insurance, a fact that is true in both Canada and the U.S. During this age range rates go down over time as drivers reach more milestones that impact rates and gain more experience as drivers.
The longer you go without any tickets or accidents, the lower the risk you represent to insurance companies. This means that you should see better rates, although once into adulthood rates in general remain fairly steady.
During this period, the things that most impact rates are the type of car you drive, where you live, your commuting distance, and of course your driving record. Age is no longer a major factor.
Senior Drivers: New Challenges
While it’s not cut and dried, some senior drivers may pay a little more for car insurance as they age. Experience on the road counts for a lot, as does driving record, but as drivers age slower reflexes and changes in eyesight can begin to affect driving skills.
In 2013, Ontario approved a rate increase for drivers over 80 due to the evidence that they are involved in crashes more frequently than their younger counterparts. In fact, between from age 25 and on, no other age group has a higher risk of a crash.
While this can be frustrating to seniors who have been driving for many years, car insurance companies often offer senior discounts and defensive driving course discounts to drivers who make an effort to keep driving skills sharp. This can help to mitigate the increased cost.
What Else Impacts Rates
Age may seem like it’s a big part of what determines rates, but unless you are under 26 or over 80, there are many other factors that are given more weight by insurance companies.
The big factors that go into determining rates, aside from age, are:
- Driving record: tickets and accidents on your record will have more negative impact on rates than almost any other possible factor.
- What kind of car you drive: Some cars cost more to insure due to high cost or repairs or how commonly they are stolen, among other factors. Year, make, and model can all affect your rates
- How far you drive each day: commuting distance and time on the road help determine risk
- Where you live: Your postal code can have an impact on your rates based on claims statistics in that area.
The coverage you choose impacts rates as well. Every province has a minimum amount of coverage required by law. It may be tempting to take the minimum policy, especially if you are in one of the higher-rated categories, but it can carry a lot of risk. Car accidents are expensive, and without the right coverage, you could face serious financial consequences.
Young drivers, however, can probably do without insurance add-ons like rental car coverage that they don’t really need, which can save some money.
Higher limits on liability and optional coverage can both increase your rates. I higher deductible, however, can bring them down quite a bit.
Discounts you qualify for also have a big impact on rates. At most insurance companies multi-vehicle and multi-policy discounts are among the largest. That helps contribute to lower rates into adulthood as people purchase homes and second cars.
A car insurance rate calculator can help you to find the right coverage at the best price no matter what your age. Comparing rates from multiple companies allows you quickly see what you can get for your insurance dollar, and which companies offer the best rates in your age range.