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 for yourself or a first-time motorist.
Insurers see new drivers as a risk because they’re more prone to tickets and accidents. Auto insurance is expensive for these people because of this. Drivers 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 explain what a new driver is and why their rates are usually so high. It’ll also tell you how to get insurance if you or your child are in this group. This includes an explanation of how to lower premium costs as much as possible. 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” category. Most people will probably think of teens when they think of these drivers. But there are plenty of other types of new drivers who’ll likely have high rates. Insurers will view you as a new driver if you fit into any of the categories below:
- Teens. Probably the most obvious type. Teens have no driving experience and no record. Their rates are high because of their age and inexperience.
- Inexperienced adults. This could be an adult at any age who has little to no driving experience. 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.
Why Is Car Insurance for New Drivers So Expensive?
This is a common question. The answer is that insurers just don’t know you or your teen that well. This makes new drivers risky to cover. For this reason, new drivers pay more for auto insurance.
When you’re a new driver, providers don’t know whether you’re a risk for tickets and accidents. This is because you don’t have a driving record that proves you’re safe behind the wheel. More accident claims mean more money that your insurer will need to pay. To lower your costs, you’ll need to prove that you aren’t a risk. You can do this by driving safely and adding years of experience.
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 rates.
Insurance for teens can cost even more because they lack driving experience and are young. Being under the age of 25 can mean higher rates. This is just the unfortunate reality of being young.
How Much Do New Drivers Pay?
There isn’t a set rate for all new drivers. Your insurance costs are going to be different from everyone else. Remember that insurers use several factors to determine your premiums. These factors are:
- Age (younger or older than 25)
- Marital status
- Driving history
- Annual mileage
- Where you live
In general, new or young drivers should expect to pay more for their insurance than those with experience. Providers believe that inexperienced 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:
Get Discounts
One of the best ways to lower your rates is to take advantage of discounts that providers offer. Discounts add up and can bring down your costs by a large percentage. Each discount can knock a percentage off your rates. There are plenty of different discounts that insurers offer. Here are the most common discounts that you could qualify for if you’re a new driver:
- Anti-theft device discount
- Early signing discount
- Passive restraint discount (airbag)
- Good student discount
- Student away at school discount
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
Here’s a partial list of major auto insurance companies that offer some kind of discount for new drivers:
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 insurance costs by making smart choices. According to the Insurance Information Institute (III), here are the best ways for teens to lower their costs:
- 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 car insurance companies for new drivers. This should help you find the coverage you need.
Consider Raising Your Deductible
Another common way to lower your costs is by raising your 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 car insurance 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 a 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 high 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 their insurance because they tend to have more accidents than older people.
The second reason young drivers can see higher rates is that they’re new behind the wheel. New drivers are unproven to insurers. Because of this, insurers view them as having a higher risk of getting tickets and accidents. Providers reflect this risk by setting higher rates for these 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 new or teen 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 someone to your policy.
