Car insurance companies use a range of factors to calculate a driver’s rates, including their age, driving history, and credit score. Young drivers, people with blemishes on their driving records, and others often pay way more for insurance than people with different risk profiles. MarketWatch recently studied insurance rates for people who fall into those high-risk categories and found that while some pay exorbitant amounts to cover their vehicles, certain insurers are more lenient than others.
Young drivers, defined as people under 25, tend to pay a ton for car insurance unless they are enlisted or military veterans. USAA offers the cheapest rates for young people, with an average annual rate of $2,366, but the company only works with active or former military members and their families. Travelers had the best rates for non-military drivers, at $2,441, while Nationwide was considerably higher, at $3,076. That said, those companies undercut the $3,634 national average for young drivers, while State Farm came in slightly higher at $3,694.
Interestingly, young drivers pay significantly higher insurance rates than people with a DUI (driving under the influence) charge on their driving records! The national average for those people landed at $2,711, with many insurers coming in under that amount:
- Travelers: $1,656
- State Farm: $1,868
- Progressive: $1,874
- USAA: $1,884
- Geico: $2,605
Bad credit also weighs heavily on insurance rates. Drivers with spotty credit histories pay an average of $4,285 nationally, but the good news is that there are several companies that charge far less:
- Geico: $1,930
- USAA: $1,987
- Travelers: $2,012
- Nationwide: $2,021
- Progressive: $2,446
Calculating insurance costs is a game of risk assessment, with insurers charging more for people they believe may be irresponsible behind the wheel. It might seem unfair (and many times, it is) that car insurance companies can penalize drivers for bad credit or other factors, but there are ways to save money on coverage if you fall into one of the high-risk groups.
Shopping around is one of the best ways to cut your insurance costs. All of the companies covered here are major national insurers, but regional or local entities may offer a better price. You might also be able to save money by reducing your coverage levels, though some states have minimum coverage limits that must be met. Finally, working to improve your credit score and maintain a clean driving record can do wonders, but neither can happen overnight.