How age and driving experience affect car insurance

Why age matters to car insurance companies

Insurers set prices from the expected cost of future claims. Age and years of driving experience are two of the strongest predictors they have, because crash risk changes so much across a lifetime. The NAIC lists age or years of driving experience among the standard auto rating factors.

Age and experience usually move together, but they are not the same thing. A 30-year-old who just got a first license has the age of an experienced driver but the experience of a beginner. Insurers handle this in different ways. Some rate mainly by age, some by years licensed, and many use both. California law requires years of driving experience to be one of the three most heavily weighted factors, together with driving safety record and annual miles. The other two come first.

Crash risk by age: what the data shows

The Insurance Institute for Highway Safety (IIHS) calculates how often drivers of each age are involved in fatal crashes for every 100 million miles traveled they drive. Measuring per mile matters, because teens and older drivers tend to drive fewer miles than people in their thirties and forties.

The pattern is a "U" shape. Risk is highest for teens, falls steeply through the twenties, is lowest from about 30 to 69, and rises again after 70. The IIHS says risk is highest at ages 16 and 17. The CDC, citing IIHS research, reports that 16-year-olds crash at about 1.5 times the per-mile rate of 18- and 19-year-olds. So even one or two years of experience make a large difference.

Why new drivers crash more

The CDC lists several reasons teens are at higher risk:

• Inexperience. New drivers have had little practice recognizing and reacting to hazards.
• Night driving. In 2020, 44% of teen crash deaths happened between 9 pm and 6 am.
• Teen passengers. Other young people in the car can distract a new driver.
• Speeding, distraction and not wearing seat belts. All are more common among young drivers.

Insurers do not price on these behaviors one by one. They price on the claims that drivers in each age group actually generate, and those claims reflect all of these risks together.

Older drivers

The IIHS reports that per-mile fatal crash rates rise from ages 70-74 onward, peaking among drivers 85 and older. It notes that much of this increase comes from older people being more fragile and more easily injured in a crash, not from crashing more often. Some insurers raise prices for the oldest drivers, while others focus more on the driving record. See our guide to car insurance for senior drivers for discounts and options.

When do car insurance rates go down?

There is no national rule that says rates drop at a certain birthday. Each insurer files its own rating plan, and the age bands and amounts differ. What the crash data and common rating practice suggest is this:

1. The first years of driving are the most expensive. A newly licensed teen added to a family policy usually raises the premium the most.
2. Prices tend to ease each year through the late teens and early twenties as experience builds and the driver stays claim-free.
3. The mid-twenties are often a turning point. Many rating plans use age bands that change around this time, but the size of the drop depends on the insurer and state.
4. Rates are usually lowest from middle age onward, assuming a clean record.
5. Prices may rise again for the oldest drivers, depending on the insurer.

A ticket or at-fault crash can offset some or all of the benefit of getting older, so a clean record matters at every age.

Experience counts even if you start late

If you get your first license as an adult, many insurers will still treat you as a new driver for your first few years. Ask how your insurer counts experience. Some use the date of first license, and some give credit for a license held in another country. In California, years licensed is a required rating factor, and the Good Driver Discount needs at least 3 years licensed. See our guide for new drivers.

List every driver in your household

Insurers usually ask you to list everyone in the household who is licensed or has a learner's permit, and many want to know when a teen gets a permit or license. Leaving a young driver off the policy to keep the price down can backfire: if that driver crashes, the insurer may dispute the claim or cancel the policy. If a household member will never drive your car, ask whether the insurer lets you exclude them by name, and what that means if they drive anyway. Rules on named driver exclusions vary by state.

Gender and marital status

Many insurers also rate by gender and marital status, often alongside age. IIHS data show young men have much higher fatal crash rates per mile than young women. Some states do not allow these factors. California banned gender as an auto rating factor from 2019. If you are unsure what your state allows, your state insurance department can tell you.

Ways young drivers can lower car insurance costs

You cannot change your age, but young drivers and their parents have several options:

1. Stay on a parent's policy while living at home, rather than buying a separate policy. Adding a teen to an existing policy is often cheaper than a teen buying alone, but compare both.
2. Ask about good student discounts. Many insurers offer them for students with strong grades. California lists "academic standing" as an allowed rating factor.
3. Take a driver training or defensive driving course. Some insurers and states give a discount. See defensive driving courses.
4. Choose the car carefully. A modest, safe car with lower repair costs usually costs less to insure than a sports car. See how your vehicle affects rates.
5. Consider a telematics program. Usage-based insurance can reward safe driving habits. See telematics.
6. Keep the record clean. Avoiding tickets and crashes is the single most effective long-term saving.
7. Compare quotes at each renewal. Insurers price young drivers very differently.

For more detail, see car insurance for teen drivers and car insurance for young drivers.

Example: adding a teen driver

For example, a couple with a clean record adds their 16-year-old to their policy. The insurer rates the teen as the driver of one of the family cars and adds a large surcharge for an inexperienced driver. The parents can lower the increase by assigning the teen to the cheaper-to-insure car (if the insurer allows), asking about a good student discount and enrolling the teen in a telematics program. Each year the teen stays claim-free, the surcharge usually shrinks.