The Best Insurance for Every Type of Driver

Istockphoto - woman driving a car

Insurance has long been the bane of many car-buyers’ budgets. Today, perhaps more than ever, affordable insurance rates—which still provide appropriate coverage—have become the budgeting equivalent of the holy grail.

You see, as new-car prices continue to rise, auto loan terms have grown alongside them. CarGurus recently calculated the average new car listing prices for the past few years, and to frustratingly little surprise, the average asking price grew 4.13% between 2014 and 2016—from $33,861 three years ago to $35,259 last year. American consumers don’t appear inclined to buy cheaper cars in light of this market inflation, so ever-lengthening loan terms continue to proliferate. After all, for another 6 months of payments, you can still have that V8 instead of settling for the cheaper, V6-powered Challenger.

And this mindset has led shoppers astray, choosing to budget for their cars based on monthly payments, rather than the total cost of the vehicle. Unfortunately, if you enter a dealership saying, “I can afford $400 per month,” chances are slim the dealer will include the cost of insurance when he or she manipulates your finance payments.

By now you can see how the cost of insurance has been kicked down the road and toward the back of your mind. It takes plenty of time and effort to pick the perfect car. Once you’ve found it, how can you pick an insurance policy that will both protect your new prized possession and fit into your budget?

Luckily, Dr. Kate Williams and the research team at Consumer Affairs completed extensive research in the field of auto insurance and identified some leading options for drivers in different places in life. As Williams explains,

Recognizing whether or not a particular insurance company is targeting your demographic is critical for keeping premiums low. But with so many insurance companies out there, and with so little public data on who each company is targeting, it is up to consumers to be diligent by shopping around for the lowest price and being up front about asking for discounts.

That said, Williams and her team have chosen some companies worth considering whether you’re a parent, a millennial, or a member of the military.”

Thanks to student-focused discounts ranging from 10% off for completion of the teenSMART driver safety program to a 25% discount for students that receive good grades, AllState is the top choice for parents looking to insure their teen drivers. Furthering the argument for the 65-year-old insurance company are discounts for good driving records; three years without an accident will earn you a 22% discount, and 5 years will boost that number to 35%.

Unsurprisingly, AllState also appeals to drivers over 55 years old, thanks to a 10% discount, and an additional 10% if you’re retired.

If you’re in your twenties and finally paying your own insurance, GEICO is most likely to deliver the lowest rates. The Government Employees Insurance Company works with less overhead than non-direct providers like AllState and Liberty Mutual, meaning it can save you some money if you’re willing to sacrifice on local customer service.

GEICO is also the pick for members of the military, thanks to a 15% to discount for members of the armed forces, which grows to 25% for personnel deployed in high-risk areas.

Insurance rates are determined by a number of factors. Some are outside your control, such as your age and gender, but others, like your credit score, driving record, and the type of car you’re driving, are things you can at least influence. One opportunity many insurance companies provide to drivers looking to lower their rates is an on-board device designed to monitor driving habits. These monitors plug into the vehicle’s OBD-II port and will process information regarding acceleration, braking, and the time of day the car is being driven. The discounts packaged with a good driving record can be considerable and will rarely (if ever) increase your rates. That said, they’ve proven to be a polarizing topic, with many drivers not interested in volunteering the details of their driving habits to insurance agencies.

Would you let an insurance company monitor your driving in exchange for a discounted rate?

-Matt Smith

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  1. l am retired lns. is a big think in my live, so people over 65years of age have to pay so much ins. what can be done about that.

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