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9 Life Events that Affect Car Insurance Rates
From marriage to starting a new job, which major life events result in car insurance rates going up or down?
Why do car insurance rates change?
our car insurance rates are largely dictated by you: your driving history, location, and other personalized rating factors. Any major life change you undertake can alter your insurability — and the auto insurance rates you pay. Remaining mindful of the effect of life events on car insurance is the first step toward finding the best possible car insurance rate at every stage of life.
At what age does car insurance get cheaper?
The primary ages at which car insurance gets cheaper are 18 and 25. On average, a driver can expect to save almost $1,600 per year after their 18th birthday, and again after they turn 25. This varies depending on gender, with females' car insurance rates dropping more substantially at age 18. If you’re a young driver — or if you carry a young driver on your car insurance policy — it’s worth shopping around for a new policy when you reach these age milestones.
Average car insurance premiums by age
| Age | Average Annual Premium | Difference from Prior Age |
|---|---|---|
| 16 | $6,647 | -- |
| 17 | $5,749 | -$898 |
| 18 | $5,033 | -$716 |
| 19 | $3,438 | -$1,596 |
| 20 | $3,07 | -$361 |
| 21 | $2,461 | -$615 |
| 22 | $2,217 | -$244 |
| 23 | $2,059 | -$158 |
| 24 | $1,921 | -$138 |
| 25 | $1,649 | -$272 |
Fifty-year-olds pay the least for car insurance. Car insurance companies don't see much risk in insuring a 50-year-old, as many drivers this age are financially stable and experienced drivers.
The typical 50-year-old pays nearly $200 less per year than does the average American driver.
Average car insurance cost by age range :-
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| Age Range | Average Annual Premium |
|---|---|
| 16-19 | $5,217 |
| 20-29 | $1,979 |
| 30-39 | $1,449 |
| 40-49 | $1,396 |
| 50-59 | $1,396 |
| 60-69 | $1,325 |
| 70-79 | $1,556 |
| 80-85 | $1,847 |
Does getting married change car insurance rates?
Marriage typically results in lower car insurance rates. Insurance companies view married couples as more likely to share driving responsibilities and less likely to file a claim, i.e., less costly clients. After you’re officially married, consider updating your car insurance policy. Even if your spouse doesn’t drive, most car insurance companies will require a spouse to be listed on the policy. If they’re not licensed to drive, you can list them as an excluded driver with no penalty.
If you and your spouse both drive, your car insurance company may require both of you and your vehicles to be listed on the same policy. We did some of the legwork, creating a generic user profile and surveying top insurers to find the cheapest insurance rates for married couples.
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Average annual insurance rates for a married couple
| Company | Average Premium |
|---|---|
| Sate Farm | $1,468 |
| Allstate | $2,359 |
| GEIco | $1,674 |
| Progressive | $1,366 |
| Liberty Mutual | $2,453 |
Progressive is the cheapest car insurance company for a married couple, offering an average annual two-vehicle premium of just $1,366 ($113.83 per month).
Car insurance after a divorce
Handling car insurance during a divorce can be tricky. While there are some specific details to review related to car insurance and divorce, the big-picture impact on rates is insubstantial. On average, auto insurance premiums increase by $130 per year after a divorce.
Average annual car insurance costs by marital status:-
| Marital Status | Average Annual Premium |
|---|---|
| Single | $1,844 |
| Married | $1,708 |
| Divorced | $1,838 |
| Widowed | $1,757 |
Car insurance companies associate different risk levels to single drivers, divorced policyholders, and married couples. Married couples share driving responsibilities and have historically filed fewer claims than unmarried couples or single individuals. The difference between married and divorced couples' car insurance premiums is about $65 per policy period, so it isn’t a significant gap.
Car insurance when buying a second car
Buying a second car — even without adding another driver — can impact your auto insurance rates. Many companies offer a multi-car discount, charging you less when you open an additional line of business. The discount won’t be enough to offset the cost of insuring an additional vehicle, but every little bit helps. The amount of the discount will vary by insurer, but typical multi-car discounts total between 10-25%.
This discount may make it worthwhile to keep all of your vehicles on one policy. There are some scenarios in which you might not be able to keep them together — this typically relates to specialty vehicles. If you own a classic car or an exceedingly valuable vehicle, it might fall into a separate category of insurance which is ineligible for a multi-car policy.
It’s unlikely you’d want to insure one vehicle with one company and a second car with another.
Car insurance rates after buying a home
Buying your first — or second — home is a big step, and one that leads to insurance savings. Homeowners are considered more financially stable and less risky than their renter counterparts, resulting in lower auto insurance premiums.
The real benefit of being a homeowner comes from the multi-policy discounts offered by most insurers. Much like buying a second car, a multi-policy discount becomes available when you're able to open a home insurance policy with the same company you're using for your car insurance. It's usually a good idea to insure your home and auto with the same company. As a homeowner, you can save an average of $138 per year via a multi-policy home-and-car insurance setup.
| Homeowners Status | Average Annual Premium |
|---|---|
| Renter | $1,470 |
| Condo Owner | $1,436 |
| Homeowner | $1,435 |
Total Loss Formula States
If you live in one of the states listed below, a vehicle will be declared a total loss if the value of the repairs is greater than the percentage listed in the right column
Car insurance after repaying loans
Paying off a loan can lead to more affordable car insurance because of one primary rating factor: credit score. Credit is a major rating factor, used by nearly every major insurance provider. Car insurance companies use credit scores to gauge insurability because historical data indicates drivers with good credit tend to drive more carefully and file fewer claims than do drivers with poor credit. When drivers with high credit do file claims, they tend to be less costly than claims filed by drivers with low credit.
| Credit Tier | Average Annual Premium |
|---|---|
| Very Poor(300-579) | $2,729 |
| Fair(580-669) | $2,240 |
