A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products, including home, life, auto, and commercial, and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, mainly in the insuranc...

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Reviewed by Leslie Kasperowicz
Farmers Insurance CSR 4 Years

UPDATED: Oct 15, 2021

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Car insurance rates are highly personalized and based on a wide range of different factors that are all contributory to risk. One of the rating factors that has the greatest affect on your rate quotes and the premiums that you will pay is your age. Both the statistics and the insurance companies say that young drivers simply are not good risk or good drivers. Start comparing car insurance rates now by using our FREE tool above! While this is not true for everyone, companies cannot independently monitor every young driver to see if they are an exception to the rule. Because of this, the company must offer a base rate for each age group and then raise or lower the rates based on a long list of other rating factors.

The first time that any young driver buys car insurance, they may suffer from sticker shock. According to surveys, adding a 16-year-old male driver to a policy will raise the premiums by an astounding 92 percent. Adding a female counterpart in the same age group will lead to an increase of 67 percent, and this is without even adding a vehicle. As you can see, there is no denying the fact that age can make it difficult to continuously carry insurance. If you are trying to find out how age rating brackets work and when rates for the inexperienced will go down, read this guide.

What is risk and why is it important?

Car insurance is designed to protect you financially is you are negligent in an accident. A basic plan will pay for third-party damages and also for your court costs. While this is the universal purpose for requiring and buying coverage, you may also buy protection that will pay for your own medical expenses or repair costs.

There are base rates for each coverage option and each raised limit that you choose, but personal factors that indicate risk drive the base rate up or down.

Insurance companies determine how likely a driver is to file a claim and then estimate how high the claim costs could potentially be when a claim is filed. In doing this, they will know just how much they will need to collect from a specific driver or a specific household to justify taking on the risk. When a client is considered to be a lower risk, they are charged less premiums due to the fact that the chances of them filing a claim is low. When clients are high-risk, however, insurers must either charge high premiums or decide not to extend an offer for coverage because of the underwriting guidelines.

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Rating Categories for Different Types of Risk

There is a lot of mystery behind auto insurance formulas, eligibility guidelines, and risk classifications. When you are trying to essentially learn what age you will be when your perceived risk class will go down, you first need to understand how risk classes work. The class that you fall into and the guidelines for working your way out of a high-priced class are what will ultimately save you money in the end.

There are currently three different types of risk classes that you can be assigned to: preferred, standard and high risk. Each class has its own base rate, rate filing and equations that are used to determine personal premiums.


Preferred drivers often have zero violations, zero recent accidents and are experienced behind the wheel. Most in this class have 9 or more years of experience, clean records and also good to excellent credit ratings.


A standard driver may have some minor blemishes or multiple non-fault claims that disqualify them for a low-cost preferred premium. It is even possible to have one at-fault accident that was property damage only. Again, you will need at least 5 years of experience before you can go from a high-risk to a standard driver.


High-risk drivers can have major violations, accidents resulting in injury, gaps in coverage or a birth date that shows how inexperienced they are. No matter what your record looks like or what type of vehicle you drive, you will fall into the stereotypical high-risk rating class when you are young and have no driving experience under your belt. If you are young and your record is not perfect, your rates will be exorbitantly higher.

How will age affect your rating class?

Now that you get the general idea as to how rates are calculated, the next step is learning how age alone will help carriers place you in a risk class. In most states, the younger you are, the higher the risk class. There are a few states, however, that have laws that prevent insurers from strictly looking at age. In these states, it is your years of driving experience that matters. In states that rate on driving experience, it is possible for a 25-year-old to pay 16-year-old premiums when they were just licensed. For those who think using age against a driver is discrimination, this makes more sense.

Which ages carry the highest premiums?

Typically, anyone who is between the ages of 16 and 19 will pay the highest rates based on age. Males in this age group will pay more than females with the same exact factors, but either way, drivers who are between 16 and 19 will pay more because the risk of a crash is three times higher than it is for drivers in other experienced age ranges.

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When will premiums begin to drop?

Once a drive reaches 20, they will be able to demonstrate that they are responsible behind the wheel. As long as the driver has no infractions or accidents, they will see their rate decline. In most states, a driver with a clean record for 3 years or longer will receive a sizable good driver discount. Still, at this point the driver can receive high-risk ratings.

It is not until a driver has been licensed for 9 years that they climb out of the high-risk branding.

This is why most say that at 25 their rates took the biggest plunge. Between 20 and 25 you will gradually see the rates fall as long as you are being safe and responsible.

If you want to see if you can find lower rates from a new carrier, it is time to comparison shop. Use a quote tool on the Internet and you can enter your personal details from home. You can even adjust your age to see how much you would pay with more experience so that you can see insurance rating in action. Start comparing car insurance rates now by entering your zip code in our FREE tool below!