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Age and motor insurance

Why motor insurers use age when pricing cover

There are a large number of different rating factors used in setting the price for motor insurance. These include factors associated with the vehicle, where it is kept and the people who drive it. For the latter, age can materially influence both the likelihood of policyholders making a claim and the cost of such claims when they occur.

Impact of age on motor insurance claims and premiums

Chart One shows the percentage of customers claiming per policy, the average cost of a claim and the average premium for different age groups for private motor insurance in 2016 for people aged 18-20, 21-25 and so on in five year bands until age 90. All policies for people aged 91 and over have been grouped together.

Chart One - Average claim, average premium and claims frequency motor insurance by age, 2016


 

The ABI's data for 2016 shows that:

Average premiums for motorists were closely linked to the average claim for all ages, reflecting the higher average claim for young and old drivers, compared to those aged 31-70. Average premiums for those aged 31-70 fall as they get older within this age bracket, reflecting the fall in the claims frequency from 9% to 7% during this period.

Those aged 66-70 are best off, paying just £260 for their car insurance, while 18-20 year olds pay almost four times as much at £973.

The drivers with the lowest average claim costs are between 61 and 65 at £2,161. In contrast, the average claim is highest for older drivers, reaching over £5,500 for those over 91.

The age where you are least likely to make a claim is 71-75 years old, where you are half as likely to make a claim as 18-20 year olds.

If you are finding it difficult to find suitable cover, a specialist insurance broker will usually be able to help. The British Insurance Brokers’ Association (BIBA) can put you in touch with a specialist broker.

If you are finding it difficult to find suitable cover, a specialist insurance broker will usually be able to help. The British Insurance Brokers’ Association (BIBA) can put you in touch with a specialist broker.