Why is car insurance so expensive at 21?
Asked by: Miss Alverta Mertz | Last update: September 3, 2025Score: 4.3/5 (6 votes)
Why is car insurance so expensive for a 21-year-old?
High crash rates are the main reason why car insurance is so expensive for 21-year-olds. Drivers in their early 20s have higher crash rates than every other age group except teens. Crashes cost car insurance companies money in the form of claims payments.
How can I lower my insurance at 21?
- Increase your deductible.
- Check for discounts you qualify for.
- Compare auto insurance quotes.
- Maintain a good driving record.
- Participate in a safe driving program.
- Take a defensive driving course.
- Explore payment options.
- Improve your credit score.
Does car insurance automatically go down at 21?
Yes, car insurance goes down at 21. In fact, your car insurance premium begins to decrease every year starting from 17-18 years of age, depending on insurer. The biggest drops are typically registered when you turn 19 and 21.
Why is my car insurance so high at 20?
Insurance is about assessing risk. Young drivers have less experience, which puts them in a higher class of risk for insurers. As a result, car insurance rates for a 20-year-old are higher than those for a more experienced driver, though a 20-year-old driver is still less expensive to insure than a teen.
Why has CAR INSURANCE become so EXPENSIVE?
What age are you kicked off car insurance?
Unlike health insurance, which can have an age limit of 26, you can stay on your parent's car insurance policy indefinitely if you live in the same house. Now, if you move out, you'll probably need your own.
Does credit score affect car insurance?
How credit-based insurance scores work. Most U.S. insurance companies use credit-based insurance scores along with your driving history, claims history and many other factors to establish eligibility for payment plans and to help determine insurance rates. Again, except in California, Hawaii, and Massachusetts.
At what age does insurance stop being expensive?
On average, auto insurance rates for 25-year-olds are cheaper than rates for younger drivers. Auto insurance premiums tend to decrease as you get older, until about age 75. But your age is just one factor insurers consider when setting rates.
Why is my insurance so high at 23?
Auto insurance companies view young adults as riskier to insure than older drivers since they do not have as much experience behind the wheel and have a greater accident frequency rate than older adults. To account for the added risk of insuring a younger driver, many insurers charge higher rates.
How does insurance work in 21?
Insurance is a type of side bet that you can make in blackjack. It is offered when the dealer's up card is an ace. If you decide to take insurance, you are betting that the dealer has blackjack. This bet pays out at two-to-one odds if the dealer does indeed have a blackjack.
What happens to your insurance when you turn 21?
In CA it goes down either at 25, or at 9 years driving experience. 21 year olds are still a super high risk group.
At what age is car insurance cheapest?
Both male and female drivers see the biggest drop in average annual car insurance premiums between the ages of 18 and 19. This is because younger drivers are seen by most auto insurance companies as riskier to insure due to their overall inexperience behind the wheel.
What age is most expensive to insure?
Key takeaways. 18-year-old drivers on their own policy pay the highest car insurance premiums out of the age groups Bankrate analyzed. The most significant difference in premiums by gender occurs at age 18. On average, 18-year-old males cost 9 percent less to insure than their female counterparts.
How much is insurance for new drivers under 21?
The average cost of liability-only car insurance for teenage drivers on their own policy is $197 per month, though you could save if your parents can add you to their policy. Young drivers have the least experience and the highest crash rates, so insurers set higher rates to account for that risk.
Does State Farm run your credit?
Most major car insurance companies like GEICO, Progressive and State Farm factor in your credit score when giving you a quote. Some smaller, regional insurers skip credit checks, though their coverage options (and available online information) can be limited.
What bills improve your credit score?
As with cell phone bills, cable and internet bills can help your score if you opt in to a service like Experian Boost that gives you credit for utility and other kinds of payments. Just be mindful that not all of your credit reports will be affected.
Does having bad credit make car insurance more expensive?
Drivers with poor credit (a credit score under 580) pay 97% more, on average, for full coverage car insurance premiums than do their counterpart drivers with exceptional credit (a credit score above 800), according to a study by Bankrate.
Will my insurance go down when I turn 21?
States Where Age Does Not Affect Rates
In the following states, insurance companies cannot take age into account when calculating insurance premiums: California.
At what age does auto insurance go up?
According to countrywide data from Progressive, the cost of auto insurance in most states for seniors tends to start rising at the age of 75. In contrast, middle-aged drivers in their 50s and 60s may pay less for insurance than at any other time in their lives.
Should I put my adult child on my car insurance?
Do my parents have to put me on their car insurance? Only if you live with them. Insurers typically require all licensed drivers who live at the same address to be listed on a policy, especially if they frequently borrow each other's cars.
Is it better to be under your parents' car insurance?
Cost Benefits
Staying on your parents' car insurance policy has significant financial advantages. It's typically more cost-effective, especially for drivers under 25. You can benefit from lower rates due to your parents' extensive driving record and potential discounts.
What happens if I don't add my child to my auto insurance?
One of the biggest risks of not adding your teenager to your car insurance is what happens if they get into an accident. Even if it's a minor fender bender with no injuries or property damage, it can open up a can of worms with your insurer.