Getting your license can be a liberating experience, as you have a lot more freedom to travel wherever you’d like. With this new power comes responsibility, however, as you have to secure adequate car insurance. Car insurance for a new driver can be more expensive, as providers charge higher rates due to inexperience. Below, you can discover how much car insurance is for a new driver and how to lower the rate you pay.
How Much Is Car Insurance for a New Driver?
Insurance companies often charge newer drivers significantly higher rates than drivers who’ve been driving for several years. Insurance providers justify these higher rates because they view newer drivers as riskier to insure due to their inexperience on the road. The rates that a new driver will pay for their insurance can vary widely, but the average rate is around $5,500 if the new driver joins a policy of their own. If the driver joins an existing policy, like their parent’s policy, the policyholder will typically pay an additional $2,750 each year.
What Kinds of Drivers Will Pay New Driver Insurance Rates?
Teen drivers will need new driver insurance. It’s important to note that a teen will need insurance whether they participate in supervised driving with their learner’s permit or independent driving with their driver’s license. Insurance providers will typically charge teens higher rates for insurance because they’re still learning the rules of the road.
Even if you have had experience with driving in the past, an insurance company may charge you a higher rate if you have gaps in your driving history. They may assume that you’re riskier to insure, as it may have been a while since you last sat behind the wheel. You may also pay a higher rate if you’re an older driver who’s previously relied on public transportation and just obtained your license for the first time.
Insurance providers may also charge people who’ve just immigrated to the United States higher rates for auto insurance. These individuals may have driving experience in their countries of origin, but insurance companies may still view them as high risk. As a result, companies may charge newly immigrated individuals higher rates as they adapt to driving laws in the United States.
Is There a Specific Car Insurance Policy for New Drivers?
No, new drivers don’t have to seek out a specific car insurance policy. The coverage they receive is the same coverage that more experienced drivers get. The main difference is that new drivers will pay higher rates. While there isn’t a specific auto insurance policy for new drivers, all drivers need to purchase whatever their state deems as the minimum required coverage.
This minimum required coverage usually includes liability insurance for property damage and bodily injury. Some states also require you to purchase personal injury protection and uninsured/underinsured motorist coverage. You may also purchase additional coverage depending on your preferences.
What Factors Can Influence the Cost of New Driver Insurance?
Here are some common factors that can influence the cost of new driver insurance:
- Credit score
- Marital status
- Age
- Gender
- Coverage limits
- Driving history
- Vehicle type
- State of residence
Note that some states ban insurance providers from considering certain factors when determining car insurance rates. For example, Massachusetts, Hawaii, and California don’t allow insurance providers to consider credit history. These states, along with Michigan, Maine, Pennsylvania, and North Carolina, also don’t allow insurance providers to base their rates on the driver’s gender.
How Can You Reduce Your Rate for New Driver Insurance?
Here are some ways that you can reduce your rate for new driver insurance:
Seek quotes from different providers
It’s important to not settle with the first insurance provider that you find. You can find the most affordable rate by shopping around with different insurance providers and weighing your options. When you find a provider that offers an affordable rate, you can sign up with them. When you have to renew your auto insurance policy, consider shopping around again. You don’t necessarily always have to sign up with your first provider. This can help you avoid complacency and ensure that you always find the most economical plan available.
Drive a safe and reliable vehicle
Choose a safe vehicle that has good safety ratings and low repair costs. Driving a brand-new vehicle may be a red flag for an insurance provider, as it may feature components that are expensive to repair. On the other hand, driving a 20-year-old vehicle that lacks basic safety features can also signal issues. Find a good middle ground by getting a gently used vehicle that has modern safety features but lacks elaborate materials and flashy, unnecessary features.
Stay on your parents’ policy
One of the most impactful ways to save on new driver insurance is to remain on your parents’ policy. There’s no age at which you have to leave their policy. As long as you primarily live with your parents and don’t hold the vehicle’s title, you can stay on their policy. This is typically much more affordable than signing up for an independent policy.
Opt for a higher deductible
Another way to save on new driver insurance is to opt for a higher deductible. This can lower your premiums, which is the amount you pay each month to maintain your insurance plan. Note that this can be a risky decision, as you’ll have to pay higher out-of-pocket costs in the event of an accident. When you commit to driving safely, you can minimize these risks and benefit from the lower premiums.
What Discounts Can I Look Out for as a First-Time Driver?
Depending on what insurance provider you seek your insurance from, you may have access to certain discounts if you:
- Submit proof of good grades in school
- Maintain a clean driving record with no infractions
- Take a defensive driving course
- Install anti-theft devices in your vehicle
You can use the information in this guide to better understand the world of new driver insurance and reduce the rates you pay.
At FIXD, our mission is to make car ownership as simple, easy, and affordable as possible. Our research team utilizes the latest automotive data and insights to create tools and resources that help drivers get peace of mind and save money over the life of their car.
