Car insurance Insurance companies use a variety of factors to calculate a driver’s premium, including age, driving history, and credit score. Young drivers, those with blemishes on their driving records, and others often pay more for insurance than those with other risk profiles. Market Watch recently studied insurance premiums for people in high-risk groups and found that while some people pay exorbitant amounts to insure their cars, some insurance companies are more lenient than others.
Young drivers, defined as those under 25 years old, tend to pay a large sum for car insurance unless they are drafted or army Veterans. USAA offers the cheapest rates for young drivers, with an average annual rate of $2,366, but the company only works with active or retired military and their families. Travelers has the best rates for non-military drivers, at $2,441, while Nationwide is significantly higher at $3,076. However, those companies beat the national average of $3,634 for young drivers, while State Farm has a slightly higher rate of $3,694.
Interestingly, younger drivers pay significantly higher insurance premiums than older drivers. DUI (driving under the influence) charged on their driving record! The national average for these people is $2,711, with many insurance companies charging less than that amount:
- Tourist: $1,656
- State Farm: $1,868
- Progress: $1,874
- USAA: $1,884
- Geico: $2,605
Bad credit also has a big impact on insurance prices. Drivers with bad credit pay an average of $4,285 nationwide, but the good news is that there are some companies that charge much less:
- Geico: $1,930
- USAA: $1,987
- Tourist: $2,012
- Nationwide: $2,021
- Progress: $2,446
Calculating insurance costs is a game of risk assessment, with insurance companies charging more to people they believe are likely to drive irresponsibly. It seems unfair (and often it is) that Car’s insurrance Companies can penalize drivers for bad credit or other factors, but there are how to save money about coverage if you are in one of the high-risk groups.
Shopping around is one of the best ways to cut your insurance costs. All of the companies mentioned here are large national insurers, but regional or local groups may offer better rates. You may also be able to save money by reducing your coverage, although some states have Minimum insurance limit Ultimately, working on improving your credit score and maintaining a clean driving record can work wonders, but none of it happens overnight.
