Why your age affects your insurance premiums
Why do young drivers pay so much in insurance? Because the collisions they have cost more to fix, new data shows.
A street wrapped in bubble wrap to highlight the importance of road safety
New data from the Association of British Insurers shows exactly why age is such a significant factor in deciding the level of premiums for motor insurance policies.
The data shows the average premiums that customers of different age groups pay for their car insurance, compared to the cost of the average claim they make.
So, for example, drivers aged 18-20 pay the highest premiums, with an average of £972: this is because any claims that drivers in this age group make tend to not only be more expensive, with an average of £3,667, but also more frequent that older drivers.
Conversely, the age group with the lowest average premiums is those aged 66-70, who pay £241, because their claims average out at £2,225.
The 61-65 age group has the lowest average claim costs (£2,180), but their premiums are more than the 66-70-year-olds because they tend to make more claims.
The figures also show that drivers over the age of 70 tend to pay higher premiums than middle-aged drivers because they make more expensive claims: drivers over the age of 90 pay average premiums of £478, for example, because their average claim is £3,656, which is around 62% more than motorists who are 40 years younger.
However, these older drivers still pay less than the £502 paid by motorists aged 26-30.
Rob Cummings, manager for general insurance at the ABI said: “This data shows the clear link between the age of a driver and the risk of making an expensive claim on a car insurance policy. Older and younger drivers will pay more for their car insurance than those in their middle age, because they are more likely to have accidents and make expensive claims for personal injuries.
“Rising life expectancy is leading to an increase in the number of older drivers who naturally want competitively priced insurance. But the price of insurance is based on risk, including the higher average claims costs as drivers get older. In addition to a driver’s age, insurers will consider many factors when setting the price of car insurance including claims history, the vehicle, postcode and driving record.”
Age of Policyholder Average premium Average claim:
18-20 £972 £3,667
21-25 £649 £2,905
26-30 £502 £2,520
31-35 £426 £2,274
36-40 £378 £2,279
41-45 £343 £2,199
46-50 £326 £2,265
51-55 £306 £2,233
56-60 £277 £2,216
61-65 £252 £2,180
66-70 £241 £2,225
71-75 £255 £2,495
76-80 £291 £2,572
81-85 £352 £2,886
86-90 £415 £3,690
91+ £478 £3,656