Some people throw shade at millennials living with mom and dad.
It appears car-insurance carriers can be counted among them.
Millennial drivers who live with their parents pay higher average premiums than their condo and house-owning counterparts, according to a new study.
Compare.com, an online aggregator pulling insurance rates from more than 50 different auto insurers in the U.S., found that millennial drivers living with their parents pay an average $1,750 in yearly premiums. That’s 73% more than the average $1,009 premium for millennial condo dwellers and 45% greater than the $1,205 premiums for millennials who own single-family homes.
Andrew Rose, CEO of Compare.com, said the price differentials couldn’t be traced exclusively to home ownership, but the profile of a person owning their place tend to be in line with what insurers consider cheaper to insure: Higher insurance scores, a longer track record of being insured and more driving experience.
Another reason: Penny Gusner, a consumer analyst at CarInsurance.com, said people living with their parents might not be getting a homeowner discount or have access to a bundle discount when purchasing their home and car insurance together.
‘A driver living with his or her parents may not have a healthy credit history built up yet, while those who own a home in most cases would.’ Penny Gusner, a consumer analyst at Carinsurance.com
“People with fair or poor credit typically pay more for insurance, because though controversial, insurers deem them as higher risk,” Gusner said. “A driver living with his or her parents may not have a healthy credit history built up yet, while those who own a home in most cases would.”
The study said of the stay-at-home millennial demographic, 53% were in their 20s.
Regardless of drivers’ living arrangements, average car insurance is costly for anyone in the millennial age bracket, the study said, using aggregate information from 2.3 million drivers.
Drivers aged 22 to 37 paid an average $1,280 premium, which is 44% higher than the premium paid by baby boomers, aged 54 to 72, and 28% more expensive than GenX drivers, aged 38 to 53.
Prices for millennials were even more expensive than those for the oldest of drivers in most cases. Compare.com determined millennial premiums are also 15% higher than prices for drivers aged 73 to 90.
In general, steeper premiums make sense for younger drivers, Rose acknowledged.
Nevertheless, he said insurers were slow to adjust pricing criteria even in the face of generational trends like increasing delays in getting drivers licenses or credit cards.
Still, Rose noted the range on individual rates prices could be “massive.”
“Shop. That is the thing that is the message,” Rose said.
Car insurance is another tight pinch for millennial consumers who already have plenty of expenses gnawing at their budget. Many also cope with student-debt payments, sky-high child care costs and plans to tuck away money for retirement.
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