The majority of new drivers are young people who are getting behind the wheel for the first time, but anyone without a recent driving record or insurance policy poses the same risk to auto insurers.
New drivers, especially young individuals, are often seen as high risk by auto insurance companies due to their lack of driving experience and previous driving records. This can result in high insurance premiums for new drivers, making it difficult for them to afford coverage.
However, it’s important for new drivers to have car insurance as it provides financial protection in the event of an accident.
Keeping this in mind, it is a good idea to investigate the various ways in which new drivers can save money on auto insurance.
In this article, we will discuss some tips and strategies that new drivers can use to find the Best Cheap Car Insurance coverage.
Who Needs Car Insurance for A New Driver?
Auto insurance companies often categorize certain groups of individuals as “new drivers”. These include:
- Teenagers who have recently received their driver’s license
- Individuals above the age of 50 who have never driven before.
- Foreign nationals or immigrants.
- Drivers of any age who haven’t driven in a long time or who haven’t updated their insurance policy.
Because of their higher perceived risk, these drivers typically face higher insurance costs than more experienced drivers. Car insurance companies view new drivers as a greater risk to insure. Hence they charge higher prices.
Car Insurance for New Teenage Drivers
Teenagers are considered the most accident-prone group among drivers, so auto insurance companies can justify higher premiums for this demographic. The best option for a teenager to obtain affordable insurance is to remain on their parent’s policy while they have the same permanent residence.
It’s important to note that the term “cheap” is relative, as adding a teenager to a married couple’s insurance policy can increase their premium at least four times, according to NerdWallet.
However, getting insurance as an individual is likely to be even more costly. It’s a good idea to check several new driver insurance rates online to ensure you get the best deal.
Car Insurance Prices for A Couple with Two Cars and A New Teen Driver
The good news for young drivers is that insurance companies offer a variety of discounts, and their rates will improve as they drive safely over time. Once a driver reaches their mid-twenties, their insurance premiums become more reasonable, on average.
The right time to get your own insurance policy can depend on various factors such as your age, location, and gender. If you are in your early twenties and your permanent address is different from your parents, getting your own insurance policy is simple.
If you and your parents reside at the same address but prefer separate insurance policies, it is important to consult an agent to ensure both policies reflect this.
When searching for your own insurance policy, obtaining a quote from your parents’ insurance company is a good starting point. However, it’s crucial to compare it with other options to ensure you receive a competitive price.
Immigrants and Foreign Nationals Car Insurance
Keep in mind that even if you have prior driving experience in another country, U.S. insurance companies will treat you as a new driver when determining your auto insurance premiums. The reason for this is that they only take into consideration domestic driving records when determining rates.
The same applies to your credit history, which is used to calculate insurance rates in all states except for California, Hawaii, and Massachusetts.
Driving without a valid U.S. driver’s license can make obtaining insurance coverage difficult. Renting a car may be a good alternative as it usually comes with insurance included.
To make things easier, getting a license in the state you reside in is advised. In some states, like California, licenses are available even to undocumented immigrants. To get the best deal on insurance, it’s a good idea to compare quotes from at least three different insurers.
After A Driving or Coverage Lapse, Car Insurance Is Required
If you’ve had a break from driving or your driver’s license has lapsed, you may be considered a new driver by auto insurance companies. A lack of driving history or continuous auto coverage could result in you being deemed a high-risk driver, leading to higher insurance premiums.
It’s important to compare different insurance options even if you have a driving history, as a gap in coverage can increase your costs. This is particularly relevant for those who have been deployed in the military, as some insurance providers offer exceptions for this scenario.
However, if you’ve had breaks in coverage, it may be more difficult to obtain insurance from traditional providers. In such a case, you may want to consider seeking coverage from specialized insurance companies that cater to high-risk drivers.
A Car Insurance Quote’s Pricing Factors
Factors that influence car insurance prices for new drivers are given below:
Individual Factors
Age, gender, and marital status can all affect insurance rates.
Coverage Type
The amount of coverage you choose can impact the cost of insurance.
Vehicle
The type and model of your car, as well as its safety features and risk of theft, can influence insurance pricing.
Location
State minimum insurance requirements and local factors like crime and population density can affect insurance costs.
Credit Score
Insurance rates are often higher for drivers with poor credit, but credit scores cannot be used to determine insurance prices in California, Hawaii, or Massachusetts.
As A New Driver, How Can You Obtain Reasonable Auto Insurance?
Shop Around for Insurance
Rates can vary greatly between insurance providers, so it’s a good idea to compare quotes every year to make sure you’re getting the best deal. Don’t assume you have the best rates just because you did last year.
Check into Family Insurance
If you still live at the same address as your parents, consider staying on their car insurance policy instead of getting a separate policy. This could result in lower insurance premiums, depending on your individual situation.
Consider The Car You Drive
Higher-end vehicles, sports cars, and those that are commonly stolen tend to have higher insurance rates. To keep costs down, opt for a car that is cheaper to insure.
Take Advantage of Discounts
New drivers can take advantage of a variety of discounts offered by auto insurance companies, including:
- A discount for academic achievement.
- A reduction for drivers who successfully complete a defensive driving program.
- A savings opportunity for students who are away from home and still covered by their parent’s insurance.
- A discount for having multiple policies, such as renters or homeowners insurance.
- Discounts for those in the military or a specific occupation.
- A reduction for having safety features installed on your vehicle.
