How much an individual pays for car insurance can vary greatly, depending on factors such as age, gender, and address. In general, younger people have the highest rates, and men have higher rates than women. Many factors are in play when insurance rates are calculated. Our American Auto Insurance team invites you to explore the primary driver characteristics that determine insurance costs and how to find the best coverage that meets your insurance needs and budget.
The Effects of Age on Your Policy
Risk factors vary depending on age, starting high, lowering over the years, and then going back up for senior citizen drivers. Age is one of the top determining factors in insurance rates.
Teen and Young Adult Drivers (16-24)
Teen and young adult drivers have triple the risk of being in a fatal crash than older drivers. They have more than four times the accidents of those over 20 and more moving violations, making this the riskiest age group. Teens may be able to reduce rates through good student and driver’s education discounts.
Adult Drivers (25-69)
Adults have a lower risk as they gain driving experience. Rates drop in the early 20s and may fall substantially after age 25. Depending on driving and claim history, rates will remain lower than other age groups for some time.
Senior Citizen Drivers (70+)
Senior citizen drivers experience rate hikes as they reach their mid-70s. Risks increase due to age, including vision, hearing, and response time. Insurance rates for seniors will be higher but not as high as for teens if they have a good driving record. Seniors may be able to reduce their rates through driver’s education programs.
The Effects of Gender on Your Policy
Gender is used to determine risk when setting car insurance rates. Men are more likely to have accidents and engage in high-risk behaviors while driving. Men generally pay more, but many factors determine that. Gender plays a role, but its effect varies depending on location and other criteria. California, Hawaii, Massachusetts, Michigan, North Carolina, and Pennsylvania are the only states that prohibit using gender as a determining factor in setting rates. People in these states should have equal rates if other factors such as age, vehicle, driving history, and claims history are identical.
Credit scores may override gender in determining rates, with low credit scores increasing rates due to risks associated with them. A female with a low credit score could pay more than a male with a good credit score. Currently, California, Hawaii, Massachusetts, and Michigan don’t allow credit scores to be included in determining insurance rates. Regardless of gender, maintaining a good driving record is key to keeping car insurance rates down. While gender is one factor used in most states, other essential factors include driving record, age, and claims history.
What Are the Other Factors That Determine Insurance Costs?
Age and gender lead to the cost insurance companies place on their policies. The highest insurance rates are for male drivers who are 18 years old. The difference between gender-affecting rates is highest at age 17, with males paying 18% more for insurance. The gender gap in insurance costs nearly disappears around age 70.
Driving records and claims history are significant factors as well. Accidents, speeding tickets, and driving under the influence violations increase rates depending on the severity of the violation. Claims may raise rates for up to three years.
Your address is used in factoring risk for insurance policies, with state, city, and even ZIP code playing a role in determining rates. Some states have higher requirements for insurance policies, with higher minimum coverage amounts and other regulations like bodily injury coverage. Local information, like city and ZIP code, shows insurers your local demographics, including population and rates of thefts and accidents. Areas with severe weather risks will also have higher rates. Insurers in California and Michigan can’t use the driver’s ZIP code in determining rates, though.
The insured vehicle affects insurance rates, with newer vehicles costing more since the policy is based on replacement costs. However, newer cars may qualify for safety equipment discounts. Larger vehicles generally cost more to insure because they can cause more damage in an accident. Sporty body styles may be associated with higher-risk driving. Repair costs for the make and model are factored in as well.
Other factors include miles driven annually, coverage types, and coverage limits. Insurance history affects rates. A history of keeping your policy in effect helps reduce rates, while lapses in coverage could lead to increased renewal rates.
How Does Illinois Compare To Other States?
Overall, car insurance in Illinois is 15% less than the national average of $1,771 per year for full coverage. Drivers closer to Chicago will pay higher rates since drivers who live in a large metropolitan area encounter more risks.
Illinois requires $25,000 coverage for bodily injury or death of one person, $50,000 for bodily injury or death of more than one person, and $20,000 for property damage coverage as bare minimums. Illinois also requires uninsured motorist coverage to protect drivers if they have an accident with an uninsured driver. Collision, comprehensive, medical payment, and uninsured property damage coverage aren’t required. Regardless of minimum coverage requirements, drivers should obtain a policy that offers adequate protection that meets their needs.
How Do I Get Better Insurance Coverage?
While some factors, such as age and address, are fixed, and issues like driving record blemishes take time to improve, you can improve your insurance rates and coverage when seeking a policy now by working on the following:
- Look at minimum coverage requirements and determine which type meets your needs. Older vehicles may only require liability coverage. Underinsured and uninsured motorist coverage requirements may apply, so balance your budget with your insurance needs.
- Check for lender requirements if you have a financed or leased vehicle. Lenders generally require full coverage, including collision and comprehensive, to cover losses from totaled or stolen cars.
- Consider your insurance needs, personalizing the product to suit you. Some drivers may need to maintain SR-22 insurance that meets Illinois requirements for proof of insurance.
If you have more questions about vehicle insurance coverage, contact our American Auto Insurance team today. We can help answer your questions or provide a free quote. With offices all over Illinois, you’re sure to find an American Auto Insurance agent near you. Call us now at 800-483-4868 to get started.