Whether you’ve been driving since you were old enough to get a driver’s license or you’re just starting out, you’ll need to have car insurance. While you may pay more for car insurance as a teenager and in your early 20s, once you turn 25, and you have a good driving record, you may be able to get lower rates on your auto insurance policy.
What Is Car Insurance?
Having car insurance safeguards you and your vehicle in case of an accident, theft, or act of nature. With the right insurance policy and coverage, your carrier will pay for repairs, medical expenses, and damages to the other vehicle and people caused by an accident. Without car insurance, you’d have to pay out of pocket for any repairs or medical expenses. With auto insurance, you pay a monthly or yearly premium to an insurance company that will pay the expenses associated with an auto accident.
Who Needs Car Insurance?
All states, except Virginia and New Hampshire, require some form of auto insurance. While New Hampshire doesn’t require mandatory car insurance, they recommend that you at least get basic liability and property damage coverage or show proof of financial responsibility. Virginia requires you to pay $500 per year to the state, and you’re still responsible for costs incurred for an accident. Depending on the state, you’ll need to have minimum bodily liability insurance and property damage liability.
In general, most states want you to have a policy that has $25,000 per person or $50,000 per accident for bodily injury and $25,000 per accident for property damage. These numbers do vary by state. Select states also mandate that you have underinsured or uninsured motorist coverage for bodily injury.
What’s Covered in Car Insurance?
Car insurance policies generally include five areas of coverage:
Bodily Injury Liability
Your insurance carrier will cover medical expenses for people injured in an accident where you are found to be at fault. While most states require a minimum bodily injury liability amount, you may want to consider adding more than the minimum to pay for medical expenses incurred during a serious accident, or to protect your assets if you get sued for an accident where you’re found to be at fault.
Property Damage Liability
Property damage liability covers the cost of repairs to another vehicle or someone’s property in an at-fault accident. While this type of coverage pays for the other vehicle, it doesn’t pay for damage to your car or property.
Uninsured or Underinsured Motorist Coverage
If someone doesn’t have liability car insurance or enough coverage to pay for damages or medical expenses caused by the accident, you won’t get reimbursed from their insurance coverage. When you ask your insurance carrier for coverage, include uninsured or underinsured motorist coverage. This coverage can help pay for your medical bills, pain and suffering compensation, lost wages, and, in some states, repairs to your car.
Collision Coverage
Collision coverage on your insurance policy pays for damage to your vehicle no matter who caused the accident. Collision coverage is generally sold separately, with a deductible.
Comprehensive Coverage
If your car gets stolen, vandalized, or is involved in a natural disaster or damaging event, comprehensive coverage will pay for expenses after the deductible. Some comprehensive coverage also pays for your cracked or shattered windshield.
Does Car Insurance Go Down at 25 Years of Age?
In general, car insurance goes down after you turn 25. However, there are many factors that car insurance companies consider before reducing your insurance rates.
When you turn 25, insurance companies feel that you have driving experience, are less likely to drive recklessly, and are better able to avoid accidents and claims. In fact, if you have an excellent driving record with minimal claims, you might save thousands of dollars a year on your car insurance. According to Policygenius, rates for a 25-year-old drop by 29% compared to a 21-year-old driver. The older you get, provided you have a good driving record and credit score, the lower your auto insurance payments will become.
What Factors Determine Car Insurance Rates for an Older Driver?
Age isn’t the only factor insurance providers look at when determining a driver’s rate. Even though rates typically drop once you reach 25, the company will look at your profile to see if you might be a high-risk driver. These factors include:
- Past accidents or driving violations: If you’ve been in at-fault accidents, have a history of speeding tickets, or have been convicted of reckless driving, insurance carriers may view you as a risky driver.
- How long you’ve been driving: Even though you’re 25, it doesn’t mean you have driving experience. The longer you’ve held a car insurance policy, the more likely you are to have a driving history.
- Poor credit score: Auto insurance carriers often look at your credit score to help determine your insurance rate. The higher your score, the less you’ll have to pay. According to ValuePenguin, they state that a driver with poor credit can pay up to 59% more than someone with very good credit depending on the car insurance carrier. This is not allowed in certain states, so your credit score would have no effect on your rates there.
- Where you live: Certain ZIP codes raise red flags for insurance companies. For instance, if you live in an area where vandalism and theft are high, you may pay a higher insurance premium.
How Can I Lower My Car Insurance Rates?
You can lower your car insurance rates after 25 with a safe driving record and these tips:
- Keep an excellent driving record. Avoid at-fault accidents, driving violations, and reckless driving.
- Have a good credit score. If you have a poor credit score or minimal credit history, work on getting your score as high as possible. You can get a free credit report and see what your score is.
- Enroll in a defensive driving class. Talk with your insurance broker and see if they offer a discount if you take a defensive driving class.
- Adjust deductibles and optional coverage. You may not need gap insurance or car rental reimbursement. You might consider increasing your deductible to reduce your premiums. Consult with your insurance broker to see where you can cut costs on your policy.
Car insurance is a necessity for your financial and physical well-being. When looking for the best car insurance policy for your age, look for an insurance carrier who can help you get the maximum coverage and benefits.

At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.