Will I have to pay more for an insurance policy because I'm young?

By Jacques Wong | Last updated: March 13, 2017

I heard that a lot of things can affect insurance premiums. Does that mean I will have to pay more for my insurance because I'm young?

In general, the answer is no. However, there are situations where premiums may be higher due to factors incidentally related to a prospective insured's age. These things are generally related to perceived risk like:

1. Experience: For some policies, like commercial or boat insurance, the experience of the owner or operator greatly affects their premiums. While experience is not necessarily tied to age, it is typically related.

2. Insurance History: Somewhat related to experience, in many cases, a first-time buyer of a particular type of insurance or someone with little to no claims-free history won't be able to secure the best discounts on their policy.

While there are some rumors floating around that younger drivers pay more for auto insurance due to higher accident rates for that demographic, there is nothing in the available underwriting literature that confirms this (for advice on lowering your costs, see 10 Ways to Reduce Your Auto Insurance Rate).

It is also worth noting that, when it comes to something like life insurance, your payments may actually be lower because you are deemed to be less at risk of death or disability (find out What Influences Life Insurance Premiums).

At the end of the day, what determines your premiums are the set of factors laid out in your chosen insurer's underwriting guidelines, with a little wiggle room built in for the underwriter's own judgement. And from what I have seen, age is not laid out as an explicit factor in these guidelines.

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Written by Jacques Wong

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Jacques grew up around the insurance industry and began actively participating in 2013. Since then, he has gotten a Level 2 license, won Insurance Council of BC awards in 2015 and 2020 for academic excellence in the insurance licensing courses. He educates insurance professionals through PNC Learning and as a Thought Leader at ReFrame Insurance.

In his day job as an insurance broker, he helps businesses with creative risk management solutions and strategic advice when it comes to insurance.

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