Why is car insurance so expensive for 20 year olds?
Drivers see higher car insurance rates well into their 20s because of this, even if they have clean driving records. You might be the safest 20-year-old driver out there, but the average cost of car insurance for your age group is higher because of the drivers who do get into accidents.
A 20-year-old driver generally pays less for auto insurance than they did as a teen, but rates won't drop into the more affordable range for a few more years. That's because 20-year-olds are still more likely to be in fatal car accidents than drivers age 25 and older.
Your particular driver profile, which includes factors like where you live, your age and your driving record, influences what you pay for car insurance. But rising car repair costs and an increase in disaster-related claims are significant reasons why car insurance rates are surging for many drivers.
Young drivers ages 16 to 24 tend to have the most expensive car insurance. Drivers in this age group are often inexperienced and are more likely to get into car accidents and file insurance claims. As a result, car insurance companies often charge higher premiums to young drivers.
Insurance companies view young motorists as high-risk drivers due to their lack of driving experience. As a result, they pay significantly higher annual premiums than older drivers with more experience on the road.
Travelers is the overall best car insurance company for 20-year-olds. Nationwide is the cheapest insurer, offering a full coverage policy at about $2,170 per year when added to a family policy.
Lack of Experience and Driving History
Young drivers are seen as more prone to accidents due to inexperience, making them riskier clients for insurers. This can result in higher premiums and even difficulty obtaining insurance coverage.
The rise in insurance costs is in addition to historically high prices for new and used vehicles since the coronavirus pandemic, as well as rising costs to repair vehicles.
Geico is so expensive because car insurance is expensive in general, due to rising costs for insurers. But at $462 per year, the average Geico car insurance policy is actually cheaper than coverage from most competitors. In fact, Geico is one of the cheapest car insurance companies nationally.
At Progressive, the average premium per driver tends to decrease significantly from 19-34 and then stabilize or decrease slightly from 34-75. At age 75, the average premium begins trending upward.
Which gender pays more car insurance?
In general, car insurance companies charge male drivers more for coverage because they're more likely to get into accidents. But while most states allow insurers to consider gender when setting rates, your age, location, insurance provider and driving record usually make a bigger difference.
Although car insurance in general becomes cheaper as you move into your twenties, you'll still be considered a young driver at 21, and it's not until your thirties and forties that premiums start to drop further.
Young Drivers and Accident Rates
The primary reason automobile coverage for teenagers is so expensive is that young people get into more car accidents than older drivers. As drivers mature and get used to handling vehicles, they become far less likely to get into a wreck.
Why Is Car Insurance So High for a 21-Year-Old? Compared to older drivers, 21-year-olds have less driving experience and are more likely to be involved in accidents. Car insurance companies compensate for these risk factors by charging this age group higher rates.
As a younger driver, you're riskier to insure, according to the insurance company. Teenagers and young drivers have less experience, so they are more likely to be involved in accidents. When you bring more risk, you're more expensive to insure.
- For men: Nationwide, $178 per month, $2,133 per year.
- For women: Nationwide, $163 per month, $1,950 per year.
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, up until about age 75 when they start increasing again. But your age is just one of many factors insurers consider when setting rates.
| Age | Average cost per year for men | Average cost per year for women |
|---|---|---|
| 20 | $2,284 | $2,025 |
| 30 | $3,310 | $2,903 |
| 40 | $4,471 | $4,123 |
| 50 | $6,531 | $5,831 |
GEICO stands out as the best car insurance company for 22-year-olds, offering excellent services and coverage. For those seeking the most affordable rates, GEICO is also the cheapest, with a monthly premium for full coverage at only $154.
Some states don't permit gender to impact insurance rates
There are a few states that explicitly forbid insurance companies from considering gender when it comes to insurance rates. Those states are: California. Hawaii.
Why is insurance more expensive for boys?
On average, young men pay much more for car insurance than young women. This is because car insurance providers find men to be riskier drivers than women, especially when they are younger. When they are older, women start to pay slightly higher rates.
Age has the biggest impact on your rate, along with the level of coverage you choose. Insurance companies use age to figure out how likely you are to need medical care. Older people are more likely to have health problems, which means the insurance company has to pay more for their medical bills.
Healthcare system complexity
This complexity often results in administrative inefficiencies, increased paperwork, and higher operational costs for both healthcare providers and insurers. These added expenses are eventually passed on to consumers in the form of higher insurance premiums, deductibles, and copayments.
Why is Allstate so expensive? Many factors contribute to Allstate being expensive, including rising costs for insurance companies and the way it pays its agents.
Car insurance costs have been on the rise, leaving drivers searching for ways to save on car ownership costs. In fact, according to a report from Bankrate, the average annual premium of full coverage auto insurance rose to $2,543 in 2024 — up 26% from the previous year.
