Why Does Age Effect Car Insurance Premiums?

Someone aged 18 to 20 is likely to pay more for their car insurance than any other age of driver

On average, a young driver is likely to pay more for their car insurance policy than an older, experienced driver

It is no secret that when it comes to calculating car insurance premiums your age plays a part in determining the cost of providing your cover. As a general rule, on average, the younger, in-experienced motorist is likely to pay more for their policy than a more mature experienced driver.

This is because a younger driver is likely to be at greater risk of being involved in a road traffic accident and then claim on their policy. In the last few days, the Association of British Insurers has produced some interesting data endorsing the above so let’s have a look at some of the information in a little more detail.

The data looks at the average premium someone pays in comparison to their age and the average amount of the claim that they make. Below are some of the statistics: –

Age Range Average Claim Amount Average Annual Premium
18 to 20 £3,667 £972
21 to 25 £2,905 £649
26 to 30 £2,520 £502
31 to 35 £2,274 £426
36 to 40 £2,279 £378
41 to 45 £2,199 £343
46 to 50 £2,265 £326
51 to 55 £2,233 £306
56 to 60 £2,216 £277
61 to 65 £2,180 £252
66 to 70 £2,225 £241
71 to 75 £2,495 £255
76 to 80 £2,572 £291
81 to 85 £2,886 £352
86 to 90 £3,690 £415
91+      £3,656 £478

As you can see, those in the 18 to 20 age bracket pay, on average, more for their car insurance than any of the other age groups mentioned above and have an average claim of £3,667. Yet, it is those in the 86 to 90 age group that have the biggest average claim of £3,690 yet they only pay £415 on average each year for their car insurance – less than 50% of those in the youngest age bracket who pay an average of £972 per annum. This is because the average younger driver makes more claims on their policy than any other age bracket.

You can see that the lowest average premium of £241 is paid by those in the 66 to 70 age group and that their average claim is £2,225. Although those aged 61 to 65 have a lower average claim of £2,180 they pay a slightly higher average premium of £252 per annum because they tend to make more claims.

When you get to 71 and above you can see that premiums start to rise but so does the average amount of a claim when compared with those aged 31 plus.