Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insuran...

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager Chris Harrigan

UPDATED: Apr 13, 2022

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Here's what you need to know...

  • If you were licensed at age 16 in most states allow, you would not be classified as an experienced driver until you reach 25
  • As you calculate true costs, you will find that car insurance can still be quite costly at 23
  • When policyholders file claims, they will cost the insurer money to investigate

When you are granted the privilege to drive, you are also handed the obligation to buy car insurance. At the age of 23, many new graduates who attend college are ready to start living life independently.

Before you take the leap, it is crucial that your budget and price the true cost of owning a vehicle instead of just the initial cost.

To really determine how much you will pay for your insurance in your state, you should understand how rates are determined.

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Why are insurance premiums age based?


A lot goes into calculating a premium when someone applies for coverage.

While there is a long list of different rating factors that will have a direct effect on your rates, one factor that you cannot change is age.

The primary reason why rates can go up or down because of age is because some age groups are deemed to be riskier than others.

As insurance rates are being drawn up and calculated, insurers will assess the risk to determine just how likely a person or a household is to file a claim.

When policyholders file claims, they will cost the insurer money to investigate, to pay out, and even to represent their parties in court. The higher the likelihood that a claim will be filed, the higher the premiums.

The higher the likelihood that a claim will be filed, the higher the premiums.

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Who are the riskiest drivers?

Based on what the statistics show, drivers in certain age groups are very likely to file a claim and much more probable than others to get into an accident.

The riskiest age groups are between 16 and 20 and also over the age of 65. Younger age groups are risky because of their inexperience behind the wheel.

Older drivers are risky because they have vision problems and their reaction time is not as fast as it was.

Is a 23-year-old still considered a high-risk driver?


Just because you are not in the riskiest age group does not mean that you are out of the woods quite yet.

You may not be the highest risk driver as a 23-year-old, but you are still classified as a high-risk driver in most states until you have at least 9 years of driving experience.

If you were licensed at age 16 in most states allow, you would not be classified as an experienced driver until you reach 25.

This means that your rates can still be inflated because of the year that you were born in, even when you have a blemish-free driving record.

While you are still a high risk, you will pay lower premiums than your peers who are less than 20 and have been licensed for only 1 to 3 years.

This is because you will qualify for a Good Driver discount in most states when you have 3 years of experience with no violations or at-fault accidents.

When this discount is applied to your policy, you will see a dramatic decline in your rates.

What other factors go into calculating your rates?

Underwriters look beyond your age to calculate your rates and this is because there are several factors that can add to or take away from your risk class.

Just because you are still being penalized for being young and inexperienced does not mean that you cannot receive favorable ratings in other categories.

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Here is the list of factors you will see where you can balance out your rates:

Gender and Experience

The more experience the better when you are 23. If you were licensed at 16, you will receive credits for driving for 7 years.

This can drive your premiums down more than a 23-year-old who has only been licensed since age 21.

If you have been licensed in another state or international territory, tell your agent so that you can provide the right proof to get your credits.

All young drivers will pay high premiums, but young males pay much more than young females.

The reason why males are seen to be riskier drivers is that they tend to be more aggressive and are much more likely to get into an accident than their female counterparts.

It is not believed that females are more skilled as drivers, but instead, that evidence shows that males have a higher frequency of breaking traffic laws and taking risks while they drive.

Many argue it is discrimination, but the data does show that men have higher accident rates in this age range.

Vehicle Use and Mileage

Two factors that generally are related to one another that you can control are vehicle usage and annual mileage.

How your car is driven and how often are two factors that will be used by underwriters to assess how likely you are to get a claim.

Obviously, people who are driving in stressful conditions or who are driving double or triple the average commute will be exposed to potential accidents more often.

This is why usage to drive for business or commute will affect your rates. It also has a negative effect if you drive more than 12,000 miles per year.

Pleasure usage and low mileage will qualify you for some favorable ratings.

Vehicle Type

Young drivers really need to put a lot of thought into the car that they buy. When you are 23, you are mature enough to know that it is not always best to buy a sports car.

Not only are you a target for traffic tickets, you will also pay high rates because these are high-risk cars. The vehicle type, claims statistics and safety record of the car will all play a role in premiums.

If you buy a car that costs a lot to repair or that is proven to cause a lot of damage to other cars, you can expect your rates to be high.

Look into the safety record of any car that you would like to buy before you sign a sales contract so that you know you can afford the insurance.

Credit Ratings

Not all states use credit-based scoring to calculate insurance rates, but in those that do your credit information can be used in the determination of your rates.

It is not exactly your score that is used, but your history that will assign you to a risk level.

You should check to see if you live in a state where insurers can look at your credit before you worry about this.

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How can you keep your premiums as low as possible at 23?


As tempting as it might be to be independent, once you see how high your premiums are on your own you might be begging your parents to help you out.

There are ways that you can save on your insurance if you are a wise consumer.

Here are some tips to keep in mind:

Stay on your Parents’ Policy

You can stay on your parents’ policy if you are a college student, if your car is still registered in their name, or if you live in their home.

If you want to save, you can benefit from all of the discounts that they receive and keep your premiums low.

Get Discounts

There are a lot of discounts for young drivers. If you are a student and get good grades, apply for Good Student discounts.

In addition, try to look for Driver Training or affiliation discounts. The best way to determine how much insurance will cost you is to start comparison shopping.

Shopping around for pricing will help you see which insurers want to do business with 23-year-old drivers and which do not

Start comparing car insurance rates now by using our FREE tool below! Enter your zip code to get started!