Car insurance Companies use a range of factors to calculate a driver’s rates, including age, driving history and credit score. Young drivers, people with blemishes on their driving record and others often pay significantly more for insurance than people with other risk profiles. Market overview Recently, insurance premiums for people in these risk categories were examined and it was found that some insurers pay exorbitant amounts to insure their vehicles, but some insurers are more flexible than others.
Young drivers, defined as those under the age of 25, tend to pay a lot of money for car insurance unless they are employed or army Veterans. USAA offers the cheapest youth rates, with an average annual rate of $2,366, but the company only works with active or former military personnel and their families. Travelers had the best rates for non-military drivers, at $2,441, while Nationwide was considerably higher, at $3,076. That said, those companies undercut the national average of $3,634 for young drivers, while State Farm came in slightly higher at $3,694.
Interestingly, young drivers pay significantly higher insurance premiums than those with a DUI (driving under the influence) costs on their driving! The national average for those people was $2,711, with many insurers staying under that amount:
- Travelers: $1,656
- State Farm: $1,868
- Progressive: $1,874
- USA: $1,884
- Geico: $2,605
Bad credit also weighs heavily on insurance rates. Drivers with spotty credit pay an average of $4,285 nationwide, but the good news is that there are several companies that charge much less:
- Geico: $1,930
- USA: $1,987
- Travelers: $2,012
- National: $2,021
- Progressive: $2,446
Calculating insurance costs is a game of risk assessment, with insurers charging more to people they think are driving irresponsibly. It may seem unfair (and often it is) that car insurance Companies can punish executives for poor credit or other factors, but there are ways to save money about the coverage if you belong to one of the risk groups.
Shopping around is one of the best ways to lower your insurance costs. All of the companies covered here are large national insurers, but regional or local entities may offer a better price. You may also be able to save money by reducing your coverage levels, although some states minimum coverage limits that must be met. Finally, working on improving your credit score and maintaining a clean driving record can work wonders, but neither can happen overnight.