Insurance is one of few industries where the age limit can be used to discriminate between individuals based on their age. Different charges are assessed by insurance companies for different ages. If you think that you will get a higher premium if you’re a 16-year-old than your 22-year old friend because you are more committed, then you’re wrong.
Insurance companies calculate their insurance costs using “brackets”, or groups of consumers that are grouped together with common elements. These classes can differ depending on many factors such as marital status, gender and area. This essay only addresses the age component.
Young Operators Groups:
Below 18: This age group is where the insurance prices are at an all-time high. This age group can pay up to 175% to 225% more for insurance than older operators. Any operator under 18 who drives a motor vehicle with business coverage could be at risk of losing coverage in the event that they need it.
18 to 20 years: Although they are still considered young drivers, they have to pay more than mature drivers. However, their premiums are lower than those of the older bracket. Individuals can obtain their CDL at age 18. Many insurers will not consider them for insurance submissions for policies that require interstate setup coverage. They will be denied coverage for intrastate activities by companies that allow them to be covered under a business policy.
21-24: This bracket is for young drivers. Private insurance premiums begin to stabilize when compared to prices paid to mature insurance operators. Many commercial insurance companies begin to accept interstate-bearing applicants for commercial auto insurance. Commercial operators younger than 21 years of age will be charged an extra price. Some insurance companies may also require that they have 12-24 months of experience in order to consider them for insurance coverage.
25-69 year old: Many insurance companies have very similar prices for this age group, though a few insurance companies start charging small increases in premiums after age 60. This class does not appear to have an age limit.
Senior citizens over 70 years old: Unfortunately, the insurance company is the only place where senior citizens are denied discounts. Auto insurance is expensive for seniors. Insurance companies and the National Highway Traffic Safety Administration- NHTSA have conducted important studies that show that people over 70 years old are more likely to cause traffic accidents. Insurance companies have taken certain steps to ensure that the correct rate is set and they obtain the required medical reports. Many business policies do not cover those over the age of 71 or 72. For customers over 76 years old, nearly all insurance companies will stop selling older polices. Other companies may make the insurance very expensive.
What can you do to reduce the impact of age on premiums and other factors? Young and old drivers cannot do much. Highway accidents are becoming more common with older drivers and younger operators. They must pay the price. Insurance companies often offer discounts to students who are younger than the average operator, while other companies might allow occasional operator status. It is important to provide the representative with the proper medical records that show the driver’s physical and mental ability to drive the car. Failure to provide this note in a timely manner could result in the cancellation of your policy.