Sir Isaac discovered that axiom when an apple fell on his head and got lost in his hair.
So why doesn’t that apply to auto insurance rates?
It seems like auto insurance premiums are always rising and never falling. Any time you get into a fender bender, or receive a speeding ticket, or even file a claim for a wreck that wasn’t your fault – your insurance rates usually appear to be a little higher than they were before. Sometimes, these rates rise for no apparent reason at all. But do they ever decrease?
Actually, auto insurance rates decline all the time – and you don’t have to change insurance companies or jump through hoops to enjoy these rate cuts. Here are some common examples:
When you turn 25. Drivers between the ages of 16 and 24 are greener and usually less skilled than their elders. Plus, auto crashes are the top cause of death in the U.S. among that age group. Reaching your 25th birthday earns you a rate cut of 12 to 15 percent (if you’re female) or 20 percent (if you’re male).
When you study hard and get good grades. Lots of insurers offer “good student discounts” for high school and college students who maintain a B average or higher. Others provide rate cuts in premiums for individuals with college degrees. Because the incidence of vehicle collisions is inversely proportional to a driver’s education level, insurance companies like to reward good students with discounts of up to 20 percent or more.
Betcha their auto insurance rates are higher than yours. Losers!
When you retire at age 55 or older. Retirement-age Americans under 70 are statistically among the safest drivers in the nation. Plus, retirees don’t have that daily commute to worry about, so they tend to drive less. These drivers frequently see their rates reduced by 10 percent.
Granted, it’s hard to get into a wreck when you’re driving eight miles an hour.
When you’ve been accident-free and ticket-free for three years. That’s the standard amount of time it takes to earn a “clean driving record” in the eyes of insurance companies. They figure that if you’ve gone 36 straight months without a wreck or ticket, you’re probably a pretty safe driver – and they reward you with major discounts of between 20 percent and 45 percent.
Here’s the secret: auto insurance rates are primarily determined using crash statistics. If you fall into a category which is associated with a high incidence of collisions, then you’ll pay more for insurance. Conversely, if you are in a classification characterized by fewer wrecks, then your rates will be lower. So you see, there are times in your life when you naturally become a less risky driver – and that gets reflected in your lower auto insurance rates.