You can also see that car insurance rates are more expensive for drivers with less experience. While most people believe that age 25 is the age at which car insurance rates fall, the most significant declines occur when drivers turn 19 and 21. Age affects car insurance rates because it is an indicator of the risk faced by the driver for an insurance company. Your insurance declines as you age because you're considered less risky to insure; in other words, you're less likely to have an accident. This information is not an insurance policy, does not refer to any specific insurance policy, and does not modify any provision, limitation, or exclusion that is expressly stated in any insurance policy.
Insurance rates are typically the lowest for middle-aged drivers, but car insurance costs for seniors can increase, even for those with an excellent driving record. In general, auto insurance premiums continue to fall every year until age 25, when rates begin to stabilize for the next few decades. For young drivers, car insurance rates go down every year that you renew your policy and haven't filed a claim. When you first get your license as a teenager or young driver, it's very likely that you're not paying for car insurance yourself, which is fortunate, since those first few years of being insured are some of the most expensive of your entire life.
23-year-old drivers pay more for car insurance than older, more experienced drivers because insurers consider them to be high-risk, meaning they're more likely to file a claim. In California, Hawaii and Massachusetts, age won't have a direct effect on what you pay for car insurance. That's because middle aged drivers tend to insure newer, nicer cars and begin to include their children in the policy, which increases the average rate for this age range overall. If you're 26 years old but just got your driver's license, you'll be considered a new driver and you'll pay more for car insurance than a 26-year-old person who's already been driving for a decade.
However, car insurance rates can also rise at the time of renewal, even if you've been absent for the entire term of the policy with no accidents or claims. Car insurance companies use statistical data, among other factors, to determine auto insurance rates. The risk to the insurer and the cost to the insured generally decrease as drivers age and gain experience. Auto insurance companies usually only check your recent driving history, so the accident will “disappear from your record” after enough time has passed.
However, your car insurance won't be automatically reduced when you turn 25. Drivers with accidents or record violations will continue to pay high rates even after they have passed their age outside the highest-risk age group.
