Car insurance companies take many factors into account when determining how much to charge a driver for coverage. Factors such as age, driving history, and credit score all play a role in the final rate that a driver will pay. Young drivers and those with blemishes on their driving records are often considered high-risk and end up paying more for insurance compared to others.
A recent study by MarketWatch looked at insurance rates for high-risk drivers and found that some insurance companies are more lenient when it comes to setting rates. Young drivers, typically those under 25, usually face high insurance costs unless they are enlisted in the military or veterans. USAA offers the most affordable rates for young drivers at an average annual rate of $2,366, but they exclusively work with active or former military members and their families. For non-military young drivers, Travelers had the best rates at $2,441, followed by Nationwide at $3,076. State Farm came in slightly higher at $3,694, but still undercut the national average of $3,634 for young drivers.
Surprisingly, young drivers pay higher insurance rates compared to individuals with a DUI charge on their driving records. The national average for those with a DUI was $2,711, with insurers like Travelers, State Farm, Progressive, USAA, and Geico offering rates below that average.
Drivers with bad credit also face high insurance rates, with a national average of $4,285. However, companies like Geico, USAA, Travelers, Nationwide, and Progressive charge significantly less for drivers with poor credit histories.
Insurance costs are based on risk assessment, with insurers charging more for individuals they deem as potentially irresponsible behind the wheel. While it may seem unfair, there are ways for high-risk drivers to save money on insurance coverage. Shopping around for quotes from different companies is one effective way to lower insurance costs. Regional or local insurers may offer better rates than major national companies. It’s also possible to save money by reducing coverage levels, although some states have minimum coverage requirements that must be met.
Improving your credit score and maintaining a clean driving record can also help lower insurance rates over time. While these changes won’t happen overnight, they can have a significant impact on the cost of insurance in the long run. Being proactive about finding ways to save on insurance can make a big difference for high-risk drivers looking to lower their premiums.