How Important is Driving Experience for Insurance Rates?

Proof of driving experience for insurance isn't mandatory, but the more driving experience you have the lower your auto insurance rates likely will be. Driving experience for auto insurance rates also depends on how many years you've been licensed for, but being older isn't always better. Drivers under the age of 25 and over the age of 65 pay more for car insurance regardless of driver experience.

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Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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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, largely in the insurance...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years Leslie Kasperowicz

UPDATED: May 10, 2022

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So you’re applying for vehicle insurance – but you don’t have a lot of experience.

Or maybe you’re an experienced driver with 40+ years of accident-free driving history and you’re looking for a discount.

How important is driving experience when it comes to calculating insurance rates? How much of an effect does experience have on the cost of your insurance? Keep reading to find out more.

Inexperienced Drivers Typically Pay More for Insurance

First, let’s get something obvious out of the way. Generally speaking, the more driving experience you have, the less likely you are to get in a collision, all other things being equal. If you have a long history of safely driving on city roads, then the insurance company is going to look at you more favorably than someone who has 2 years of safe driving experience.

Insurance companies are in the business of making money. They can charge experienced drivers less because they’re generally less likely to make an insurance claim. Inexperienced drivers, on the other hand, are statistically more likely to file an insurance claim.

Understand all of that? Good. Now, let’s take a look at some specific ways in which experience relates to insurance prices.

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Age Versus Experience: Do Younger or Older Drivers Pay More for Car Insurance?

Young drivers obviously have less driving experience than older drivers.

However, inexperience is just one reason why younger drivers are costlier to insure than older drivers. Other reasons include higher rates of impaired driving and higher rates of dangerous driving behavior – particularly among younger men. Overall, the rate of crash-related deaths per mile is 2 times higher for 16 and 17 year old drivers than it is for 18 and 19-year-old drivers, and the rate of crash-related deaths per mile is 3 times higher for 16 to 19 year old drivers than it is among 20 year old drivers. Young drivers, put simply, are some of the worst drivers on the roads.

This is where there’s a blurry line between age and experience. Are young drivers bad drivers because they’re inexperienced? Or are they bad drivers because they’re young and don’t know any better?

Of course, experience doesn’t always mean you pay less: eventually, older drivers will actually start paying more for car insurance due to risk factors unrelated to experience.

Here’s what it all boils down to: at most insurance companies, you’re going to pay more for car insurance when you’re under 25 or over 65 years of age.

The Number of Years You’ve Been Licensed is a Huge Factor

So you’re a 35 year old driver applying for car insurance for the first time. You’ve never had an insurance policy before, but you’re not considered a young driver. How much will you pay for insurance?

Unfortunately for you, the insurance company sees you as a risky driver – almost as risky as a younger driver. That’s because you have no real verifiable driving history. In the eyes of the insurance company, you haven’t driven a vehicle in 15 years – and that means you’re relatively inexperienced (even if you got your driver’s license the day you turned 16).

Different insurance companies put different weights on continuous insurance coverage. Some companies put a huge emphasis on having continuous years of insurance coverage.

If you have 20 years of continuous insurance coverage with no history of accidents, then the insurance company sees you as a good, low-risk, experienced driver.

On the other hand, if you haven’t had your own insurance policy in 20 years, then the insurance company has no real way of knowing your driving history. That makes it difficult for them to assess your risk as a driver. When an insurance company doesn’t know your risk factor, they err on the side of caution and charge a higher price for your car insurance.

Insurance Companies Need to Verify Your Prior Driving History

Here’s why driving experience is so important: insurance companies need to verify your previous driving history. If they can’t verify your previous driving history, or if you don’t have a previous driving history, then you could end up paying insurance rates as high as a brand new 16 year old driver.

This gets messy for drivers traveling between countries. You might have 20 years of driving experience in Canada, for example, but your new American insurance company struggles to verify that driving history. Sometimes, this can even happen when drivers are moving from state to state – particularly with smaller insurance companies with unique recordkeeping systems.

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Conclusion: Compare Insurance Quotes to Find the Perfect Price

Experience has an enormous impact on your car insurance. In general, drivers with experience are safer drivers who are less likely to file claims. That means they pay less.

However, not all insurance companies place the same emphasis on experience. Some companies will charge relatively cheap rates to younger drivers and relatively expensive rates to experienced drivers, while other companies do the opposite. Compare auto insurance quotes online today to make sure you’re getting the best deal.

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