The Most Affordable Auto Insurance Companies for Each Major Demographic
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UPDATED: May 5, 2023
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- Car insurance provides financial protection against vehicle damage and any bodily injury to those involved
- Several other factors affect the cost of car insurance like vehicle type, insurance company, vehicle owner, age, gender, marital status, driving record, and credit score
- Many insurance companies offer affordable rates for each of these demographics with particular additional benefits
Car insurance provides financial protection against any collision that might cause vehicle damage or bodily injury to the people involved in an accident.
Though car insurance costs depend on the vehicle owner, vehicle type, and vary from one insurance company to another, several other factors affect car insurance rates, such as age, gender, marital status, driving record, and credit score.
Keep reading to learn more about some of the most common demographics that affect your car insurance rates. We will also discuss how to find companies that offer great deals for its customers, regardless of demographic.
Affordable Auto Insurance Companies for Each Demographic
Age is a significant factor that affects car insurance rates in every state across the United States except Hawaii and Massachusetts. Different age groups present different levels of risk to the insurer.
Younger drivers between the ages of 16 and 17 have a higher probability of getting in a car accident than drivers between 40 and 49. Hence, younger drivers pay higher car insurance rates than older drivers.
How does age affect car insurance rates?
Though younger drivers pay a higher car insurance rate, it decreases as they grow older and gain more experience behind the wheel. However, the prices may hike up again as the driver ages due to the risks involved with older adults.
Insurers consider teens the riskiest drivers and have the highest chance of getting into a car accident. They charge more to insure teen drivers to offset the higher costs with their claims. For adults, the prices start to drop around their early 20s, with a significant drop at age 25. Throughout adulthood, rates continue to drop as drivers gain more experience, provided the driver’s history is clear and has no claims.
As drivers reach the age of 70, they may see a spike in their rates again. Age-related factors like vision loss, hearing loss, or slower response increase the risk of accidents among older adults. However, if the driving record is clear, they do not have to pay insurance rates as high as teen drivers.
What insurance companies offer the cheapest deals?
In the United States, the average car insurance rate is $1,674 per year for full coverage. According to a study by Bankrate on quoted annual premiums, the average cost of car insurance for an 18-year-old driver is between $4,844 to $5,650 for full coverage.
Many insurers also offer discounts to these age groups, as it can be difficult for them to pay these expensive rates. Discounts for young drivers include student discounts and driver training discounts. Senior drivers are eligible for company discounts for loyalty and affiliation with certain organizations.
GEICO offers the best affordable automotive insurance deals for teen and senior drivers. Compared with the national average rate for teen drivers — ranging from $4,860 to $5,503 — GEICO policyholders can save up to 35%.
GEICO’s average rate for a 17-year-old driver ranges from $3,166 to $3,555 per year for full coverage, significantly less than the national average. The national average rate for senior drivers ranges from $1,245 to $1,282 for a year of auto coverage. GEICO offers 18% lower rates ranging from $1,049 to $1,085 per year.
In many states, gender plays a significant role in deciding car insurance rates. Men tend to pay a higher rate because they are statistically more likely to engage in risky driving behavior, increasing the likelihood of an accident. Along with gender, the state you live in also plays a deciding factor for the insurance rates.
How does gender affect the car insurance rate?
Statistics suggest that men are more likely to indulge in risky driving behavior and be involved in accidents than women. Consequently, the common trend is that men pay more for car insurance than women. In many states, men pay roughly the same amount as women for car insurance, though men pay more for car insurance in other states.
However, states like California, Hawaii, Massachusetts, Montana, North Carolina, and Pennsylvania do not consider gender a factor to determine car insurance rates. All the states have roughly an equal rate for both men and women.
Insurance Companies That Offer The Cheapest Deals
Younger men and women tend to have larger gaps between insurance rates, whereas adult men and women pay almost the same amount, with a variable difference of 1%. Progressive Insurance offers slightly lower insurance rates to women than men.
The average annual insurance rate Progressive offers to women is $1,963, compared to the $2,048 they offer to men. The company has a difference of 4.2% between the rates for either gender, though other companies offer similar rates for both genders.
Marital status is another one of the many factors that affect car insurance rates. It certainly does not make a significant difference, but some companies offer discounts based on your marital status. States like Hawaii, Massachusetts, and Michigan do not consider marital status a deciding factor for insurance rates.
How does marital status affect car insurance rates?
Auto insurance companies assign rates based on risk. Insurers believe married couples have a more robust financial foundation than single customers, reducing their insurable risk. As a result, there is a chance that your insurance rates could decrease if you get married.
You can qualify for additional discounts like policy bundling, multi-driver, or multi-car if you are married. Single drivers can also get other deals for vehicle safety equipment, claims-free driving, auto-pay, or being a good student.
Insurance Companies That Offer The Best Deals
On average, the full coverage insurance rate for single drivers is $1,674 annually, whereas it is $1,625 for married drivers.
Combining two separate policies into one when you get married is a more affordable option. If you are a married driver looking for cheap auto insurance rates, you should consider Progressive and State Farm.
State Farm provides the best overall rates for married drivers with an average annual premium of $1,643 for full coverage. State Farm offers single drivers 1% less than married drivers, totaling about $1,629 per year for full coverage.
Driving Record and Violations History for Affordable Auto Insurance
Your driving record impacts your car insurance rates, including traffic violations, accidents, and claims. It is simple math that any insurer would charge drivers with lousy driving records more than drivers with clean records.
How does bad driving affect car insurance rates?
Insurers charge higher rates to drivers that they expect to cost their company more through their claims payout. When setting rates, companies keep in mind that drivers with previous accident and violation records are more likely to do the same in the future.
However, minor accidents or traffic violations cause only an increase of 14% in insurance rates. If you are convicted of a serious offense like DUI, insurance rates can increase by around 41%.
Insurers only consider records from the driver’s previous three-year history, meaning any violations before three years do not impact your rates. The only exception is a DUI conviction, which they can consider for five years.
Insurance Companies That Offer The Most Affordable Deals
Rate increases vary based on the type of violation. For a basic speeding violation, the average annual rate after a ticket is $1,767, amounting to an increase of roughly 23% in the base rate. The average annual rate for a DUI violation is $2,320, an increase of about 61% in the base rate for a driver with a clean driving record.
American Family offers affordable auto insurance rates for drivers with a bad driving history or violation records. It offers an average annual rate of $1,628 for a speeding ticket and an average annual rate of $1,715 after a DUI violation. The company has the third-lowest average rate for drivers with a DUI violation, costing nearly 19% less than the national average in this demographic.
Many car insurers calculate your insurance rates by checking your credit score. Generally, insurers view individuals with higher credit scores as less likely to make late payments and file a claim — the higher your credit score, the lower your insurance premium.
The states of California, Hawaii, and Massachusetts do not consider credit scores when deciding car insurance rates.
How does credit score affect car insurance rates?
Some insurance companies use credit-based insurance scores. With this method, the company does not care how much money you make but how well you manage your money. Insurance companies look at outstanding debt, credit history length, credit mix, payment history, and pursuit of new credit.
These factors help insurance companies assess the level of risk. Typically, policyholders with lower credit scores are more likely to file a claim, so insurance companies charge them more to offset the increased risk.
Insurance Companies That Offer The Best Deals
The average annual rate for drivers with a poor credit score is $2,524. These rates are sometimes more than those charged for a DUI violation.
Nationwide offers affordable deals for drivers with a bad credit score. The company offers an average annual rate of $1,837 for drivers with a poor credit score and a base rate of $1,327.
It is not easy to figure out which car insurance policy best suits your needs without burning a hole in your pocket. Compare the best affordable auto insurance policies on QuoteInspector to find a car insurance company that fulfills your insurance needs.
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