Living at home is not always cheaper, as millennials living at home pay nearly double what a millennial who owns a condo will pay.
Millennials live at home to save money, but when it comes to auto insurance, they are actually paying more. According to a study by the auto insurance quoting website Compare.com, millennials who live at home are paying 73% more on auto policies than home owning millennials.
Compare.com conducted research from 2.3 million of its customers. The study found the following average yearly premiums for millennials.
Millennials living with parents: $1,750
Millennials, home owning: $1,205
Millennials, condo owning: $1,009
The logic behind auto insurance companies charging millennials more has to do with risk. Younger people have always paid higher auto insurance premiums, as they simply have less driving experience. But where’s the risk correlation between homeowning and safe driving? Homeownership is not directly attributable for the higher premiums, but is more of an indicator of other factors that are--namely higher insurance scores and a longer history of making insurance payments.
A deeper auto insurance payment history begets lower premiums. Conversely, a driver short on history with poor credit is deemed “high risk” by insurers. It just so happens that drivers in the later camp tend to live with their parents.
Homeowners also have the opportunity to lower their premiums by bundling their auto and home insurance. Millennials, however, do have one advantage--they are smart shoppers, more apt to use the internet to find the best bargains. It behooves millennials to reshop their auto policy whenever they have a life change, whether it’s homeowning, moving to a new zip code, a new job or marriage, as these factors may have potential to lower premiums.