Just as you manage risks in your own life, insurance companies must also mange the risk they face of insuring someone who is at greater risk of having an accident. That’s why insurance premiums vary depending on your age, life situation, property value, and other seemingly random factors such as gender, education, and driving history. The higher the risk you are at having an accident, the higher your premiums will be.

Have you ever heard your parents comment that you can get your driver’s license when you turn 25? While that joke (to them) may seem like your worst nightmare, the truth is that your parents are aware that the cost of car insurance often doubles when a teen driver is added to a family policy.  Did you know that a 16-year-old driver is 20 times more likely to have a traffic accident than the general population? That’s why insurance rates are highest among the 16-24 age group.

Do I have to pay it all now?

How much coverage you need usually depends on the value of your vehicle and your state requirements. Of course, the more coverage you want, the higher your payments will be. You have the option of paying your insurance in a lump payment annually or semi-annually, or you can choose to make monthly payments. Most insurance providers will work with you to choose a payment plan that best suits your financial situation.