Insurance for new drivers | The bank rate
Understanding insurance and what is required can help novice drivers find cheap auto insurance with some of the best insurance companies. Most insurers consider new drivers to be high risk due to their inexperience behind the wheel. By getting multiple quotes for coverage, new drivers can get the cheapest rates for auto insurance and the coverage they need.
Auto insurance for new drivers
Even if you are a new driver with natural driving skills, you are still at risk of making mistakes as you gain more driving experience. The more you practice driving, the less you are seen as a high risk driver by insurance companies. When you choose the right level of auto insurance coverage, anything that exceeds the state’s minimum liability limits is considered optional by the state in which you live.
However, most insurance experts recommend that you take out liability insurance as much as you can afford. In fact, liability insurance covers injuries and material damage to the other party in the event of an accident. Depending on the state in which you live, you could be held financially responsible for any exceeding of the liability insurance limits included in your auto insurance policy.
For example, look at Virginia’s minimum liability requirements. In Virginia, you must have a 25/50/20 policy, which means your policy must provide:
- A maximum of $ 25,000 per person for bodily injuries sustained in an accident
- A maximum of $ 50,000 per accident for bodily injury (that is, the maximum your insurance company will pay per accident for the physical injuries you caused, regardless of the number of people involved)
- A maximum of $ 20,000 for accidental property damage (which includes cars, signs, fences, houses, etc.)
Consider this example; with the base model of a 2020 Ford Explorer costing around $ 33,000, property damage coverage alone could easily exceed your policy limits. To protect yourself against possible financial hardship, you might consider purchasing as much liability as you can comfortably afford.
Additional coverage options to consider
As a new driver, you are at higher risk of having an accident. While liability insurance covers the other person if you cause an accident, medical insurance and physical damage coverage will protect you and your vehicle no matter who is at fault. Consider these additional coverages when purchasing auto insurance for new drivers:
- Full coverage: This covers your car against vandalism, theft, fire, hail, and animal damage.
- Uninsured and Underinsured Coverage: This covers you if you are hit by an uninsured or underinsured motorist, meaning it will help cover your medical bills and possibly the costs of repairing or replacing your car (depending on your place of residence).
- Collision Coverage: This coverage covers you if you hit another car, sign, or property, such as a fence or gate.
- Medical expenses cover: This covers the medical expenses of the driver and passengers in the event of an accident.
- Personal Injury Protection: This also covers medical expenses after an accident, but it can also help with loss of income and child care. Personal injury protection is not available in all states.
These additional covers can give new drivers more peace of mind on the road.
How to find cheaper auto insurance for new drivers
Finding cheap auto insurance for new drivers can take time and patience. Shop around first to find the companies offering the best rates. From there, look for companies that offer a range of discounts that are applicable to you to help lower the cost of auto insurance for new drivers. Most auto insurers have a page dedicated to discounts. If you can’t find it, speak to a customer service representative.
Discounts you may be entitled to include:
- Defensive Driving Courses: Most insurance companies reward continuous driving courses.
- Clean driving record: It is generally necessary to keep your driving record free of speeding tickets and accidents to obtain this reduction.
- Security System: Tracking devices, alarms, and other security features that protect your vehicle can help you save money.
- Good Student: Maintain a high enough GPA and your monthly insurance costs may go down with some insurers rewarding good students and good drivers.
- Family policy: Adding a new driver to the family policy can be less costly than having a new driver on your own policy, as it spreads the risk more evenly among multiple policyholders.
- Multi-policy: Match your auto insurance with homeowners, apartment or even boat to benefit from a discount on each policy, with most insurers.
- Multi-car: Insuring more than one car with the same company will reduce the premium with many companies.
- Full pay: pay your premium in full each year to save money.
The amount of each rebate varies with each business, but the savings are always worth pursuing. When they are stacked together, you may be able to save a significant amount.
Laura Adams, an insurance expert, says, “Another way to make auto insurance affordable for new drivers is to purchase usage-based (UBI) insurance. These programs use technology to assess your driving behaviors and habits, such as how fast you turn and brake, your speed, mileage, and the times you are on the road. When data shows you’re driving safely, you qualify for discounts of up to 50%, depending on your insurer.
The best insurance for new drivers
Getting the cheapest auto insurance for new drivers is all about finding the right company. Some of the best rates are offered by the biggest auto insurance companies. Bankrate compared coverage and discount options based on market share with some of the most popular and highly rated insurance companies and found the following four companies to be particularly attractive options for novice drivers:
- Geico: Geico offers lower rates than most other companies, plus a wide range of discounts to help make your premium more affordable. Geico offers full-time students a good student discount and membership discounts for certain fraternities, honorary societies and sororities.
- At national scale : At national scale is another leading provider that offers competitive rates that new drivers can benefit from. New qualifying drivers can get a good student discount or can choose to include the crash discount, which can protect your fares if you cause a at-fault accident.
- State Farm: On average, State farm charges more than the other major vendors reviewed by Bankrate, but it remains one of the most affordable domestic vendors available. State Farm has an intuitive app where new drivers can change their policies, report an accident, and make payments. Plus, they offer a wide range of discount options to help you lower your premium, like being a safe driver and taking an approved driver training course.
- USAA: Available for active and former military (as well as their immediate family), United States offers some of the best rates and customer service in the industry. USAA also offers accident protection, and new drivers might consider roadside assistance to help if the car breaks down or if you need help on the road.
Cheaper car insurance for new drivers can also be found from a local company, but national companies usually offer more discounts and incentives for membership. However, getting quotes from multiple insurers is the best way to find the one that best suits your needs.
The cost of insurance for new drivers
Lack of experience often means new drivers pay higher auto insurance rates, especially teenage drivers. the The average cost of auto insurance for an 18-year-old driver is $ 2,197 per year for men and $ 1,753 for women. Rates can vary widely depending on the age of the driver, location, annual mileage, type and age of the car and the coverages you choose. If you are a new driver aged 25 or over, you might see lower rates overall, even if you are an inexperienced driver.
Frequently Asked Questions
Why do new drivers pay more for their insurance?
New drivers are more likely to make mistakes, which is the main reason car insurance for new drivers is generally more expensive. Inexperience historically means a greater probability of an accident, and therefore a higher risk for insurers. Higher risk usually equates to higher premiums, so with time and good driving habits new drivers will likely see these rates drop.
When are new drivers seeing their fares drop?
Most new drivers see their fares drop once they hit their mid-twenties or after a few years of clean driving. Laura Adams, insurance expert, says: “As you age and gain years of driving experience, your auto insurance rates should go down. “
What is cheaper to insure for new drivers: a new car or an old car?
Insurance for new drivers can be expensive, some new drivers may consider insurance rates that could be affected by the make and model of their vehicle. Older cars are generally less expensive to insure because they are generally less expensive to replace. However, safety ratings can also affect car insurance rates for new drivers, so discuss your potential vehicle choices with your insurer to determine what might be the best option for affordability and safety.