Buying insurance for a new driver can be tough and expensive. In most cases, this person will be a teen who’s just getting their license. But they could also be an adult who’s just getting their start behind the wheel. Either way, you might run into some roadblocks while buying car insurance if you’re a new or first-time driver.
Car insurance for new drivers is expensive because they’re prone to tickets and accidents. Motorists younger than 25 may also see higher rates because of their inexperience. Luckily, there are ways that new or young drivers can make their coverage more affordable.
This article will define what a new driver is and explain why they pay the most for auto insurance. It’ll also provide tips for acquiring coverage for the lowest price if you or your child are in this group. Finally, we’ll answer some of the most common questions about insurance for new or teen drivers.
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What Is a New Driver?
Many people can fit into the “new driver” category. Most people will probably think of teens when they think of these drivers. But there are plenty of other driving novices who’ll likely have high rates. Insurers will view you as a new driver if you fit into any of the categories below:
- Teens. This group immediately comes to mind when discussing new drivers. Teens have no driving experience and no record. They are just beginning their driving career and are still learning how to drive. Their rates are high because of their age and inexperience.
- Inexperienced adults. An adult at any age who has little to no experience behind the wheel is also a new driver, still learning the ropes. Insurers will still view you as a risk and raise your rates accordingly in this situation.
- Drivers with a gap in their record. This is usually someone who has driven but took a long break. This creates a lapse in coverage. Companies will likely consider you “new” because they don’t have any recent info on you.
- Immigrants. Immigrants will see higher premiums because they have no driving or insurance record. They might not be beginner drivers, but insurers and the state have no way of knowing otherwise.
Why Car Insurance for New Drivers Is So Expensive
New drivers pay more for auto insurance coverage because they have no track record or history. In addition, statistics indicate that these motorists, in general, have more incidents behind the wheel than their experienced counterparts. You could be the safest driver in the world, destined to never receive a ticket or get into an accident. But until you begin to establish a driving history, your provider will consider you a risk and price your premium accordingly.
To lower your coverage costs, you’ll need to prove, over time, that you aren’t a risk to your provider’s bottom line. You can do this by gaining driving experience over time without reporting any any tickets or at-fault accidents to your insurance company. Another way you can inject trust into your relationship with your insurer is by installing a telematics device. At some point, your insurer won’t think of you as a newcomer to driving and your premium will become more affordable.
Carriers might also start you off with high rates because you don’t have recent insurance history. They want to know that you’ll make your payments on time and show them loyalty. Staying with a company for years can lower your costs.
Insurance for teens can cost even more because learning drivers lack driving experience. Expect to pay higher rates until your 25th birthday This is just the unfortunate reality of being a young.
How Much New Drivers Pay
There isn’t a set insurance rate for all new drivers. Each novice driver’s premium will be determined by many factors, driving experience being just one of them. Remember that insurers use many personal details to determine the price of a policy including:
In general, young or new drivers should expect to pay more for their insurance than those with experience. Providers believe that beginning drivers carry a higher risk. Also, those who don’t have a credit history might see higher premiums. This is because they haven’t shown that they can make consistent payments.
How to Lower Your Rates as a New Driver
Newer drivers usually pay high rates, but there are ways to lower them. Insurers offer many solutions to make coverage more affordable. Below is an outline of the most effective ways to make you or your teen’s insurance more affordable:
One of the best ways to lower your rates is to take advantage of auto insurance discounts. These can lower your premium quite a bit. Each discount can knock a percentage off your rates. There are plenty of different perks that insurers offer. Here are the most common discounts that you could qualify for if you’re a new driver:
Note that these aren’t the only discounts available. These are some of the best and most common ones for people with little to no driving experience. Not all insurance carriers and states offer the same discounts. Be sure to check with your agent to see which specific discounts you can qualify for.
Insurance Companies with New Driver Discounts
Everyone knows how outrageous premiums are for people with newly minted driver’s licenses. Some insurance providers offer savings for fledgling motorists to make their coverage more affordable. Here’s a partial list of major auto insurance companies that offer a new driver discount:
Make Good Choices
You can lower your coverage costs if you make good choices in your daily life. The first step to lowering your rates is to drive safely and avoid tickets and accidents as much as you can. Never drink and drive!
You should also try and maintain a good credit score to get cheaper premiums. In many states, insurers use a driver’s credit score to select their rates. Paying off your credit card each month and making consistent payments on time can help raise your credit and lower your premiums.
If you’re a teen, there are specific ways you can lower your coverage costs by making smart choices. According to the Insurance Information Institute (III), here are the best ways for teens to lower their rates:
- Get a good student discount by maintaining a “B” average in school (this also works for college students)
- College students at least 100 miles from home but who don’t bring their car to campus can lower their rates
- Taking a recognized driver course can help lower premiums
Find the Best Insurer for You
You shouldn’t settle for the first provider that you see. Each insurer will likely offer you a slightly different rate. It’s smart to shop around and find the best price. You can do this by gathering quotes and comparing them to find the best deal.
Rates will probably be cheaper if everyone in your household is on the same policy. Having multiple persons on a policy is a common discount that people take advantage of. Plus, your parents’ or your policy may be cheaper if it has a home and auto bundle. Having everyone on the same policy will most likely be more affordable than going out and getting one with another company.
If you’re looking for a policy, we ranked the best auto insurers for new drivers. This should help you find the coverage you need.
Consider Raising Your Deductible
Another common way new drivers can lower costs is by raising their deductible. If you’re unfamiliar with the term, a deductible is what you pay before your insurance covers your expenses in an accident. Raising your deductible can lower your rates, but it’ll mean you’ll pay more if you get into an accident. Only raise your deductible if you’re able to pay it.
Drive a Safe Car
The car you drive affects your rates. New drivers should try to find a safe car that will get cheaper insurance prices. The best way to do this is to compare rates for the car that you’re looking to buy or drive. By doing this, you should have an idea of whether you’ll want to drive it or not.
Frequently Asked Questions
Do I need coverage if I have a learner’s permit?
This can vary and depends on your provider. Some insurers will require drivers with learner’s permits to have their own policy. If the person with the permit is driving someone else’s car, they might need to be part of the vehicle owner’s insurance policy. Or, at the very least, the car owner might need to notify their insurer. Drivers with a permit who own a car will need a separate policy to drive.
Why is car insurance so expensive for young drivers?
Insurance can be expensive for young drivers for a couple of reasons. The first is that companies use age as a determining factor for rates. Drivers under 25 typically pay more for coverage because they tend to have more accidents than older motorists.
The second reason young drivers pay more for coverage is that they’re novices with unproven skill. Insurers default on the notion that inexperienced motorists are risky and more likely to cause an accident. Insurance companies reflect this perceived risk by setting higher rates for these newer drivers.
A third reason young drivers pay more is that many are single, and insurers consider your marital status when determining your rates. Unmarried drivers pay slightly more for coverage than married drivers. The reason is that single motorists get into more incidents and file more insurance claims.
Is it better for a new driver to be on their own policy?
It’s usually cheaper for a teen or new driver if they’re on someone else’s policy. This is because having a multi-vehicle policy will typically get cheaper rates. Be sure to talk with your insurer to see what the effect would be if you add a beginner to your policy.