Do Insurance Rates Go Down at 21?

June 23, 2011 No Comments »


Car insurance Q&A: “Do insurance rates go down at 21?”

First off, congratulations on legally being able to drink a libation.

As far as this question goes, it’s a little bit of yes, and a little bit of no.

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It should be noted that there are thousands of car insurance companies out there with almost unlimited ways of determining insurance premium.

And there are likely a bunch of them that decrease car insurance premiums for those over the age of 21.

Although, a discount for turning the legal drinking age seems a little counter-intuitive.

However, you certainly can’t call your insurer on your 21th birthday dinner to get your “XYZ percent” discount applied to your policy, nor should you expect a return premium check in the mail from you insurer when you turn 21.

The reality here is that insurance companies base their premiums on hundreds, if not thousands, of different combinations of characteristics of drivers and their vehicles.

Age, driving record, insurance score and type of coverage requested come into play.

Do you want liability only, physical damage coverage, PIP, Med Pay…the list goes on.

Somewhere in there is your age…used in an algorithm with 100 other unique characteristics of you, your car and requested coverage.

You may not have noticed because of all the other things changing each year (age of vehicle and most important, the insurer’s previous year’s profits) but you likely got a discount at age 22.

You may get another minor downward bump at 30, 35, 40 or 45. But once you get “way up there” in age, expect higher rates as insurer data expects more accidents and subsequent insurance claims.

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If the above information bummed you out, don’t fret. There are several ways to lower your car insurance rate regardless of age.

The first thing you can do is call you current insurer or agent and ask for a review of your policy to see if there are any missing or overlooked discounts (good driver, good student, hybrid discount, etc.)

If the answer to that inquiry is a “no,” ask to have your policy shopped with multiple different carriers. That will only work if you have an independent insurance agent.

Assuming you use a captive agent, you’ll only be able to lower your premium by reducing coverage or raising your deductible, which isn’t recommended.

So if you just turned 21, shop around and grab a few insurance quotes to be sure you’re getting the best deal out there.

Read more: Is auto insurance negotiable?

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