When inexperienced drivers are just starting out with their license, they have no prior record to prove that they practice safe driving habits. Since accident rates for young drivers have always been high, especially for young single males, insurance companies need to protect themselves against potential losses. This protection is passed on to young drivers in the form of higher premium rates.
As young drivers mature and gain more experience, they are statistically less likely to be involved in an accident. For this reason, many insurance companies consider drivers over 25 to be in a lower risk category.
Insurance companies frequently calculate premium rates, at least partially, based on category of risk, which often translates into a lower premium for drivers over the age of 25. It is important to note that if you have any accidents or traffic violations on your driving record, those may place you back in a higher-risk category and cancel out any lower premium rate that you may have been eligible for because of your age.
“As young drivers mature and gain more experience, they are statistically less likely to be involved in an accident. For this reason, many insurance companies consider drivers over 25 to be in a lower risk category”
~Chad Mullen, Lane’s Insurance
Insurance premiums are typically calculated based on an annual contract, so it is likely that you will have to wait until your annual contract is renewed before you are able to take advantage of the savings. Some insurance companies are able to change the terms of the contract mid-term, so as you cross that quarter-century milestone, it is important call your broker to inquire about this discount.
This blog post is part of the “Top 10 Auto Insurance FAQ’s” eBook.
