The calculation for car insurance premiums can seem like an arcane-at-best art that combines a multiple factors to arrive at a number that almost always seems at least a little too high. In addition to the actual vehicle, factors like age, gender and marital status are known to play a role in the final bill. A newly released study is actually challenging some of the beliefs about rates, though.
An analysis from InsuranceQuotes.com finds that walking down the aisle can mean big savings on auto insurance – at least during your 20s. For example, a married 20-year-old would pay an average of 21-percent less than the same person who is single. Unfortunately, the lower bill doesn’t last long, and by age 25, the discrepancy falls to just seven percent. It shrinks to only two percent for those over 30 years old.
InsuranceQuotes.com senior analyst Laura Adams spoke to Autoblog and said insurance companies are basing the premiums on the actual claims they get from people in these demographics. Being married “really plays a role for young people,” she said. “They are not a risky consumer.”
There is also a commonly held perception that men are riskier drivers and therefore pay higher insurance rates. This study somewhat challenges that belief, though. At 20 years old, males do have premiums 22-percent greater than a woman of the same age. But after 25, the gap shrinks to just 3 percent, and then between 30 and 55, females actually pay slightly more. “We saw the same thing last year,” said Adams when the website conducted the study.
Age is also a well-known cause of higher premiums, and it’s true that young folks get things the worst. The study finds that between 20 and 25, rates drop an astounding 41 percent and keep falling all the way to 60. Although, as a person gets older the numbers start ticking up again with the average 75-year-old paying about 17-percent more than someone who is 60.
Adams indicates the biggest coming trend in auto insurance are pay-as-you-drive programs. Young men especially can realize “substantial savings” because they can prove themselves better behind the wheel than the overall data suggests.
All of the study’s information assumes this hypothetical person to be employed with a bachelor’s degree, have a clean driving record, an excellent credit score and driving a 2012-model-year sedan. The analysis then compared the premiums nationwide based on info from the largest carriers representing 60 to 70 percent of the market.