Do people in their 40s and 50s pay the least for auto insurance?

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The good news is yes they do. People in their 40s and 50s with a history of 5-star driving pay less than their risk-taking friends. But your age is not the only thing that counts. Let’s have a look at how much difference, age really makes.

Quadrant Information Services worked out the cost of having liability coverage for a nearly new Honda Accord, based on averaging the rates of six insurers. We have simplified one of its tables here:

Age      State minimum coverage             Liability

16         $2,593                                         $2,957

20         $1,102                                         $1,261

45         $525                                            $596

55         $494                                            $560

65         $515                                            $585

75         $630                                            $718

There’s no doubt age 55 is the sweet spot for premiums, at only 19% of the insured 16-year-old. Even being 45 is not as sweet as 55 and it still costs more than being 65. However, while there are definitely benefits to being an older driver, premiums start to go up faster around 70.

Why is it good being 55?

To answer this question, we can look at what’s bad about being another age. For example, 16-year-olds have no driving experience and their brains are not yet fully formed. Their risks go through the roof. Did you know drivers 16 to 19 are three times more likely to be in a car accident than older drivers?

Drivers who are 20 have a little more experience but, in this case, a little experience is a dangerous thing. They can get overconfident. This is where being married helps their case. A single 20-year-old male pays 25% more for insurance than if he were married and a single woman of that age pays 28% more than her married friend. But for drivers, it’s still better to be 25 than 20.

At the other end of the spectrum, drivers over 70 have to contend with the symptoms of aging. Their reflexes are slower and their eyesight may not be so acute. Even so, the statewide minimum coverage still costs a young person more than an older person.

Meanwhile, at 55, you may be more likely to possess those other insurer desirables – good driving history, married, safe vehicle, good credit history.

What does it cost?

Here is a selection of prices for full auto insurance coverage in California, Florida, New York and Texas:

                           Age 45              Age 55              Age 65

California          $2,018              $1,876              $1,848

Florida              $2,502              $2,313              $2,313

New York         $1,777              $1,707              $1,743

Texas                $1,618              $1,510              $1,589

Once again, the 55-year-old comes up smiling. There might also be a good reason to move from Florida to Texas!

You can’t change your age

When insurers assess your risk of making a claim, they consider more than your age. This is just as well because you can’t change your age (as much as you might like to). Some other important factors are:

  • gender – Hawaii, Massachusetts and North Carolina prohibit gender from being used and there is no gender difference in Michigan, Montana and Pennsylvania
  • marital status – married people tend to drive more safely
  • address – more expensive in densely populated areas
  • type of car – the safer the better
  • driving record – no tickets
  • distance traveled
  • credit history – it always counts
  • any small claims – even one claim worth $2,000 can increase your premium by a national average of 41%.

Even if you can’t change your age, you can drive more safely in a safer car. That way, you reduce your chances of having an accident and making a claim. If you are still younger than 40 to 50, lucky you – the best is yet to come!

By Jesse Huges

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