Most teenagers look forward to the day they can finally get a driver’s license. But if your teen is planning to drive their own vehicle, they’ll need to get a car insurance policy first. The cost of car insurance for new drivers tends to be very expensive because young drivers lack experience on the road and are more likely to get into an accident than older drivers.
Although teenagers generally pay the highest car insurance rates, there are ways to get more affordable coverage. Here’s what you need to know about car insurance for new drivers, including how much the policies cost, what type of coverage is required, and how new drivers can lower their auto insurance premiums.
Who is considered a new driver?
A new driver is any individual who recently got their driver’s license. For the most part, new drivers tend to be teenagers or young adults. However, a new driver might also be someone who got their driver’s license later in life, an immigrant who is getting licensed in the U.S., or an individual who had a driver’s license in the past and is learning to drive again after a long hiatus.
After getting a driver’s license, teenagers are typically considered “new drivers” for at least several years. According to Progressive, car insurance rates usually decrease steadily between the ages of 19 and 34 and start to stabilize after age 34.
However, car insurance premiums depend on several factors besides age, such as location, gender, and driving record. Getting car insurance quotes from multiple companies can help you find the cheapest car insurance policy for your driver profile.
How does car insurance for new drivers work?
In almost every state, vehicle owners are required to carry a minimum amount of car insurance. New drivers with their own vehicles must purchase auto insurance before they can legally drive. If you’re the parent of a teen driver who only drives your vehicle, you can add them as a secondary driver on your current policy.
Although new drivers are statistically riskier to insure than more experienced drivers, new drivers aren’t required to carry special types of car insurance. You only need to carry the minimum amount of car insurance that’s required in your state, which often includes personal liability insurance and uninsured/underinsured motorist insurance.
However, new drivers can usually benefit from optional coverages, like collision insurance, comprehensive insurance, and accident forgiveness. Most car insurance companies sell these policies and many others that provide higher levels of protection in the event of an accident or other insured loss.
How much does car insurance for a new driver cost?
Car insurance premiums for new drivers tend to be expensive. According to Progressive, the average car insurance rate for an 18-year-old driver is $230 per month. For drivers between the ages of 21 and 22, the average rate is $176 per month.
Because car insurance premiums are personalized for each driver, it’s difficult to determine exactly how much policies cost for new drivers. Your ZIP code, vehicle type, coverage types, and coverage limits can affect your rate, in addition to other factors.
To find the cheapest car insurance for new drivers, it’s a good idea to shop around and compare rates. The first quote you receive isn’t always the best deal you can find.
Why does car insurance for new drivers cost so much?
Car insurance can be pricey for new drivers because they have little driving experience. For example, data from the Centers for Disease Control and Prevention (CDC) shows that teen drivers between the ages of 16 and 19 have a higher risk of accidents than other age groups.
Additionally, teens have the highest crash risk within their first month of having a driver’s license. The CDC found that the crash rate per mile driven is about 1.5 times higher for 16-year-olds than it is for 18- and 19-year-olds.
Despite these risks, car insurance premiums usually decrease as drivers get older. However, new drivers must maintain a good driving record and avoid tickets and accidents to see their premiums go down.
How to save on car insurance for new drivers
New drivers should plan for high car insurance premiums. However, there are a variety of ways to reduce the cost of your insurance policy. Here are a few ways that new drivers can save money on auto insurance:
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Look for discounts: Most car insurance companies offer discounts that may reduce your premium. If you’re a high school or college student, look for insurers that offer good student discounts or student away-at-school discounts.
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Enroll in a safe driver telematics program: Many insurance providers have a telematics-based safe driver rewards program. These programs track your driving behaviors, like accelerating and phone use, and give you a discount when you demonstrate safe driving habits.
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Choose the right car: The make and model of your vehicle can impact the cost of your car insurance policy. To get the most affordable rate, consider buying a used vehicle instead of a brand-new car. It’s also a good idea to get quotes for the cars you’re interested in before you purchase one.
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Stay on a parent’s policy: If possible, young adults should stay on a parent’s car insurance policy. It’s almost always cheaper for new drivers to be insured on a parent’s policy rather than purchasing their own car insurance.
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Choose higher deductibles: For car insurance policies that require a deductible, like collision and comprehensive insurance, select a higher deductible to get a lower monthly premium.
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Pay in full: You can usually get a discounted car insurance rate when you pay your annual premium upfront and in full, rather than in monthly installments.
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Shop around: Before you purchase a car insurance policy, spend some time shopping around and comparing quotes. You might find that different insurers offer different quotes for the same types and amounts of coverage. Aim to get three or four quotes to see which car insurance company can give you the best deal.
Bottom line
New drivers often pay the highest rates for car insurance. Assuming you maintain a clean driving record, premiums usually decrease with age and driving experience. However, it’s still possible to find cheap car insurance online for new drivers.
To find the lowest rate for your situation, shop around and compare rates, look for insurers that offer discounts, and avoid tickets and accidents. Teen drivers should also see if they can stay on a parent’s policy, which is typically a much cheaper way to get car insurance.
Editorial Disclosure: All articles are prepared by editorial staff and contributors. Opinions expressed therein are solely those of the editorial team and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in this article is accurate as of the date of the publish. Check the lender’s website for the most current information.
This article was originally published on SFGate.com and reviewed by Lauren Williamson, who serves as Financial and Home Services Editor for the Hearst E-Commerce team. Email her at [email protected].
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