Many people expect their car insurance to automatically drop because they have been with the same insurance company for a couple years. The assumption is that if they do not have any claims, their rates will go down. Unfortunately, this is not always the case.
Drivers who are thought to be at risk for accumulating points on their driving record will always pay a higher premium. That is why everyone starts out as a young driver with high rates. A lack of driving experience is associated with a higher risk of accidents, so if you are under 25, it is unlikely that you will see a yearly discount on your insurance premium.
“Drivers who are thought to be at risk for accumulating points on their driving record will always pay a higher premium”
~Chad Mullen, Lane’s Insurance
For those over 25, practicing safe driving habits can be good – not only for your well-being, but for your bank account. As you gain more experience, insurance companies are more likely to give you a break. Drivers without any accidents or tickets on their driving record are considered lower-risk, and are likely to see their insurance premium decrease marginally each year until the maximum discount level is reached.
Still, having a clean driving record does not guarantee that your premium will decrease. Rates are occasionally affected by other factors, such as across the board rate increases. If an insurance company raises the rates on all of their policies, you may see your premium stay the same, or even increase, for that particular year.
This blog post is part of the “Top 10 Auto Insurance FAQ’s” eBook.
