Car insurance companies use a variety of factors to determine drivers’ rates, such as age, driving history, and credit score. MarketWatch recently conducted a study on insurance rates for high-risk categories, revealing that certain insurers are more lenient than others. This article will explore the findings of this study, focusing on young drivers, individuals with DUI charges, and those with bad credit. The study shows that while some individuals pay excessive amounts for insurance, there are ways to save money on coverage.
Young Drivers
Young drivers, individuals under 25 years old, typically pay high insurance rates. USAA offers the cheapest rates for young people at $2,366 annually, but this is exclusive to military members and their families. For non-military drivers, Travelers has the best rates at $2,441, while Nationwide charges $3,076. State Farm falls slightly above the national young driver average at $3,694.
Drivers with DUI Charges
Interestingly, individuals with DUI charges on their driving records pay lower insurance rates than young drivers on average. The national average for those with DUI charges is $2,711, with insurers like Travelers, State Farm, Progressive, USAA, and Geico offering rates below that amount.
Drivers with Bad Credit
Drivers with poor credit histories pay an average of $4,285 nationally for car insurance. However, companies like Geico, USAA, Travelers, Nationwide, and Progressive offer significantly lower rates for individuals with bad credit.
Factors Affecting Insurance Rates
Insurance costs are determined based on risk assessment, with insurers charging more for individuals deemed potentially irresponsible behind the wheel. While it may seem unfair, individuals can save money on insurance by shopping around for better rates, adjusting coverage levels, working to improve their credit score, and maintaining a clean driving record.
Ways to Save Money
One of the best ways to reduce insurance costs is by comparing quotes from different insurers. Regional or local insurance companies may offer better rates than major national insurers. Additionally, adjusting coverage levels and working towards improving credit and driving records can help lower insurance costs in the long run.
In conclusion, understanding the various factors that impact insurance rates and exploring different options can help individuals in high-risk categories save money on car insurance. By being proactive and making informed decisions, drivers can take control of their insurance costs and potentially reduce their premiums over time.