Insurance
Age is key influence on price of car insurance
The Association of British Insurers has published new data today which reveals why age is an important factor in deciding premiums for motor insurance policies.
The data shows the average premiums that motorists from different age groups pay for their insurance, compared to the cost of the average claims they make.
18-20 year olds pay the highest average premium of £972, because their claims are likely to be expensive – an average of £3,667 – and more frequent than other age bands. The group with the cheapest average car insurance premiums are 66-70 year olds who pay £241, since the cost of their average claim is relatively low – £2,225.
The data indicates that drivers over-70 tend to pay higher premiums than those in their middle age, because they are more likely to make more expensive claims. Over-90s pay an average premium of £478, because the cost of their average claim is £3,656 – almost 50 per cent higher than those who are 20 years younger. However, these older drivers pay less than those in their late 20s, who pay an average of £502.
The ABI’s average motor insurance premium tracker for Q1 2015 shows that the average premium for all age groups is £360, a figure that has fallen by 5 per cent over the last two years. Drivers aged 86 and over only pay 15 per cent more than this.
The table below details the average premium and cost of claim per age group.
“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,” said Rob Cummings, manager for General Insurance at the ABI.
“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 and the motor insurance market is meeting this demand. 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.”
