How much you may be charged for car insurance is influenced by a range of factors, with your age and gender being key deciders for insurance providers.
Insurers will assess your riskiness as a driver when you apply for a policy. This helps to inform the premium that you may be charged, as the insurer will need to determine your likelihood of getting into an accident or making a claim.
Just as every driver is different, each insurance provider will have its own metrics and assessment criteria, so it’s challenging to say exactly what you may be charged just on those two factors alone.
If you’re considering taking out a car insurance policy and want to know how much you could be charged for your premium, you may want to familiarise yourself with the risk factors insurers assess to get a rough estimate beforehand.
Insurance providers base their premiums on statistical data indicating that certain age groups may be more prone to accidents. Car insurance age brackets categorise drivers into different risk levels based on their age. Young drivers, particularly males, often face higher insurance costs due to their perceived higher risk. As drivers gain experience and demonstrate responsible behaviour, their premiums might decrease.
Your age plays a significant role in determining the cost of your car insurance. In Australia, a significant number of road accidents involve younger male drivers below the age of 25. This statistic almost guarantees that any male driver aged 18-25 pays among the highest costs of car insurance in the country.
Female drivers, on the other hand, typically pay less for car insurance than male drivers. This difference can be more pronounced among younger drivers than among drivers in their 30s and 40s. If you’re wondering at what age car insurance goes down for male drivers, the answer is commonly 25.
Once you cross 25, you are no longer considered as much of an accident risk, and your insurance premiums start trending downwards. Typically, the age range of 26-69 may be seen as the golden period in which car insurance rates decrease with age. However, this may not be true for everyone in that age group, as there may be other reasons for charging the driver a higher premium.
Older drivers, especially those over 70, may see their premiums increase again due to the potential for age-related illnesses and higher accident risks. Many Aussie seniors continue to be in excellent health well into their 70s. However, for the insurance industry, they are prone to age-related illnesses which puts them at greater risk of being involved in an accident while driving.
Also, seniors may need to pass several medical tests before they can renew their driving license, which adds an additional risk from an insurer’s perspective. These risks translate into seniors having to pay more for car insurance.
Seniors may qualify for lower premiums if they agree to specific conditions such as driving only during daylight hours or staying off freeways when driving. One way of avoiding steep car insurance premiums is by opting for a ‘pay as you drive’ policy, which allows you to pay for the kilometres you drive with a short-term car insurance policy.
This type of policy is suitable for seniors who only expect to drive when absolutely necessary or once in a while. Both standard insurance policies and ‘pay as you drive’ policies can require seniors to pay a higher car insurance excess, which brings down the insurer’s share of the compensation to be paid in case of an accident. You may need to check if you can afford this excess before buying the policy.
Generally speaking, women may get lower car insurance rates than men as they are statistically considered to be safer drivers. Data shows that male drivers represent the majority of fatalities and serious injuries. This trend is consistent across various regions.
Data from the Department for Infrastructure and Transport (DIT) in South Australia shows that male drivers represent the majority of fatalities and serious injuries across the state. Between 2012 - 2016, men represented 69% of all fatalities and 65% of serious injuries.
Interestingly, women were more likely (52%) to represent minor injuries. This trend is also reflected across Australia, according to DIT.
Male vs female insurance rates could differ for the same age group. For example, a study published by The New Daily found that 'male' applicants were quoted up to $155 more than 'female' applicants for comprehensive cover by three out of four insurance providers.
Where you live may impact the premium that the insurer could charge you, as well as your policy inclusions. Areas prone to natural disasters, high crime rates, or heavy traffic might have higher insurance rates due to the increased risk of claims. In regions with a high likelihood of disasters such as bushfires, insurers may either exclude coverage for these events or charge a significant premium for inclusion.
Where you park your vehicle can also play a role in determining your insurance premium. Cars that are locked up in secure garages are less likely to be exposed to theft or damages compared to street-parked vehicles.
Your driving history, including any past accidents (even if you were not at fault), past claims, and demerit points, also plays a role in determining your car insurance premium. Generally speaking, a clean driving history means a lower premium.
Your personal information is used alongside actuarial data to assess your risk. If statistics show that one particular age group has more accidents, individuals in this group may be charged higher premiums. That being said, having a tangible history of adverse events will be taken more seriously by insurance providers than what statistics may indicate.
Even if you ticked all the boxes to be considered a statistically lower-risk driver (female, aged over 25, parking securely in a safe neighbourhood), having a history of accidents or loss of licence could play a much larger role in determining the cost of your insurance.
This is why it’s so important to carefully compare a range of car insurance quotes. Whether you’re looking at CTP insurance, third-party insurance or comprehensive car insurance, each car insurance company will use different metrics and calculations to determine what you may be charged. If you’re finding that your standard insurance provider is quoting you an eye-watering premium, don’t be afraid to shop around for a more competitive offer.
You can also take a few steps to lower your car insurance costs such as continuing to drive responsibly and maintaining an incident-free driving history. Taking precautions to safeguard your car, especially if you live in a neighbourhood with a high crime rate, can also help. It’s also important to ensure you abide by the terms and conditions of the insurance policy. For instance, be sure to avoid lending your car to unlisted drivers unlikely to drive responsibly, and don’t modify your vehicle in ways that can increase the risk of accidents. You may want to check from time to time if switching your insurance provider can lower your premium.
This article was reviewed by Mark Bristow before it was published as part of RateCity's Fact Check process.
