March 4, 2024

If you’ve ever wondered “How much is insurance for a new driver?”, chances are that you are a new driver or worried about a new driver. If that sounds like you, here is all you need to know!

How Much is Insurance for a New Driver

Overview of Insurance for a New Driver

Car insurance is required in almost every state, and even in those where it isn’t, you must pay for any damage you cause in the event of an accident.

If you own and drive your own vehicle, you will be responsible for paying a monthly insurance payment.

Young drivers should understand about insurance before getting their licenses, but especially before purchasing their own vehicles.

Understanding the different types of coverage and how insurance companies calculate adolescent rates will help you budget for what you’ll spend when you start driving.

When planning their driving expenses, many new drivers solely consider the vehicle’s purchase price, monthly payment, and gasoline costs.

Maintenance and repairs, registration, and insurance are all elements to consider for an exact estimate.

Read Also!!

Do New Drivers Need Car Insurance?

If they want to legally drive on city streets and interstates, new drivers must have some form of insurance coverage.

Drivers in both Virginia and New Hampshire can opt out of insurance, but this does not imply they will not have to pay if they are involved in an accident.

Virginia permits drivers to pay the state $500 if they do not wish to have automobile insurance, but they must pay for damages in an at-fault accident out of pocket.

Drivers in New Hampshire must pay a maximum of $50,000 in liability and $25,000 in personal property damage for accidents they cause.

So, if you are in an accident, not having insurance will not help you save money.

For a variety of reasons, car insurance for new drivers is frequently more expensive, but they can find ways to save.

Although there is no specific insurance policy for new drivers, you may want to consider purchasing additional coverage until you gain more driving experience.

How Much is Insurance for a New Driver?

The cost of insurance for a new driver varies, but the fact that adolescent drivers pay more is consistent independent of other conditions.

It is also true that men pay more for insurance than women, therefore insuring an adolescent boy will cost more than insuring a teen female.

Teenage guys pay substantially higher vehicle insurance premiums than adolescent girls because they are at a far higher risk of car accidents.

A 17-year-old male pays around 196% more than a 25-year-old male for comparable coverage.

A 17-year-old female will spend 103% more on auto insurance than a 25-year-old female will pay for comparable coverage.

When most people reach the age of 25, their auto insurance prices begin to fall. However, if you have a history of accidents or claims, you will continue to pay high rates.

As a new driver, your monthly premium could range anywhere from $150 to $200 or more.

Why Do New Drivers Pay More for Insurance?

Because of their inexperience and short driving history, insurance firms consider younger drivers to be a higher risk.

According to data, teen and young adult drivers had a greater accident rate, as well as a higher rate of distracted and intoxicated driving.

More accidents equal more payouts for insurance companies, which is why teen insurance prices are higher.

Insurers can reduce their risk by charging a higher premium, just as lenders can reduce their risk by charging a higher interest rate on a loan.

According to the Insurance Information Institute, the following factors will be considered when calculating your auto insurance premium:

  • The track record of paying your auto insurance.
  • Your postal code.
  • Your vehicle’s make, model, and year.
  • Your credit rating.
  • Your driving record.
  • Your age bracket.

Each of these characteristics assists an insurance company in determining how dangerous you are to cover. This enables businesses to charge various prices to each client based on the risk they assume.

If your parent adds you to their insurance, they will pay a higher monthly premium because of your age.

How Can New Drivers Save on Car Insurance Policies?

Although new drivers will pay higher insurance premiums until they reach the age of 25, there are ways for them to save money on their monthly insurance costs.

If you want to save money on auto insurance, consider the following suggestions:

Get Multiple Quotes

When shopping for vehicle insurance coverage, drivers of all ages should obtain many quotations from various insurance firms.

To ensure you obtain the best deal, check prices from both online auto insurance companies and small local insurance agents that work independently.

Remember that major corporations with large TV advertising budgets may devote fewer resources to offering excellent customer service.

Having a local agent allows you to simply contact them with inquiries and file a claim if necessary.

Remember that the lowest rate is not necessarily the best option. Check that the policy you desire covers the coverage you require.

Ask for Discounts

Don’t be afraid to ask for new-driver discounts. You may be eligible for a number of money-saving initiatives, both through your state and through your particular insurance company.

Many insurance companies provide the following discounts to teens and young drivers:

  • Discount for safe drivers.
  • Excellent student discount.
  • Discounted defensive driving course.

Other reductions may be available to you as a student or new driver if you inquire with your insurance carrier.

Young drivers must have outstanding grades to qualify for the good-student discount. If you are under the age of 25 and have a 3.0 GPA in high school or college, you may be eligible.

When shopping for insurance quotes, inquire about these programs, but be prepared to produce an official grade report to take full benefit of this reduction.

If you are a new driver who is already employed, you may be eligible for an occupation or company discount.

Based on data, teachers and law enforcement officials are eligible for lower insurance rates, but it’s worth checking to see if your employment or workplace qualifies you for a lower insurance premium.

To qualify for the savings, you must, like with the good-student discount, submit verification of where you work.

Drive the Right Vehicle

If you want to save money on auto insurance, choose your vehicle intelligently. Luxury automobiles are more expensive to insure since they are more expensive to restore if they are damaged or stolen.

Newer automobiles are also more expensive to replace, so if you have an affordable, safe car that is a few years old, you’ll pay lower rates.

Depending on the insurance company, taking advantage of available safety features might potentially lower your auto insurance cost.

Insurance companies value safety technology that helps reduce accidents, so you may get a better rate if you have specific features installed.

Stay on Your Parents’ Policy

If you’re a teen or young adult, you should consider continuing on your parent’s auto insurance policy if possible.

You will ideally profit from their driving record, insurance claims history and credit score. In fact, you might save thousands of dollars per year compared to the expense of maintaining your own coverage.

If they want to add you to their policy, they must notify their insurance agent, and they should expect a slight rise in their monthly payment. However, it will still be less expensive than purchasing your own coverage.

The only time enrolling on your parent’s policy may not benefit you is if they have a poor driving record, a very low credit score, or a history of insurance claims.

Choose the Right Coverage and Provider

If you own an older vehicle, you may be able to save money by purchasing the bare minimum of auto insurance required by your state.

If you finance or lease a vehicle, the terms of your loan or lease will require you to pay for costly full comprehensive and collision coverage.

The lender wants you to obtain as much coverage as possible since it reduces the amount they lose if your automobile is damaged or totaled.

Furthermore, selecting the correct insurance company will assist you in lowering your auto insurance prices. You can look into which firms often provide the most economical new-driver premiums.

Select a Deductible

When you choose a policy, you must choose your deductible. If you file an auto insurance claim, the deductible is the amount you pay out of pocket for repairs or other associated coverages.

Your monthly premium will be lower the larger your deductible. However, make certain that you are comfortable paying the premium amount you select, as this is the amount you are responsible for paying before any insurance kicks in.

For example, if you buy insurance with a $2,000 deductible, your premium will be significantly lower than if you choose a policy with a $250 deductible. If you are in an accident, you will have to pay $2,000 out of pocket.

Anything above the $2,000 deductible will be covered by insurance up to the limitations you specify.

If you don’t feel comfortable coming up with $2,000 to cover losses, you should choose a lower deductible and pay extra each month.

You can also select different deductible amounts for your collision coverage and comprehensive coverage.

If you believe you are more likely to incur a shattered windshield or other comprehensive loss, you could choose a reduced deductible for that coverage solely.

Improve Your Credit Score

Most kids do not have credit yet, but you should start developing it as soon as possible. Even as a young driver, this can have a favorable impact on the price you pay for auto insurance.

For example, if you have good credit, you may be able to pay only 65% of the premium cost for a new driver with a shaky credit history.

Paying your bills on time will reduce your price over time, so you may not have to wait until you’re 25 to obtain the best insurance cost.

Take a Course

If you want to save money on your car insurance, consider completing a defensive driving course. Many insurers will give you a discount if you can provide documentation of completing a driving safety course.

Depending on where you reside, your state may even offer rewards for driving defensively.

Some states require driver’s education, but taking this class could help you save money on your insurance. Check with your service provider to see if this type of deal is available to you.

Bundle Your Insurance

If you no longer live with your parents, you may be able to save money by combining your homeowner’s or renter’s insurance policy with your motor insurance coverage.

Some businesses may also provide bundles with other policies, such as life insurance.

Multiple insurance discounts can help you save a lot of money, so keep this in mind if you live alone or are thinking about moving.

Read Also!!

What are the Cheapest Insurance Companies for New Drivers?

GEICO, Nationwide, and USAA are the lowest insurance companies for new drivers. Unfortunately, USAA is only available to service members and their families.

NJM is another wonderful choice for teen drivers. However, it is only accessible in Connecticut, Maryland, New Jersey, Ohio, and Pennsylvania.

Because GEICO and Nationwide are more widely available, they may be better choices for beginning drivers.

Liberty Mutual has some of the finest discounts for young drivers and college students, while Allstate and Farmers have some of the highest prices for teen drivers.

Knowing what to expect when purchasing auto insurance for the first time can make you feel more prepared. Because new drivers have less experience, they must pay higher premiums.

Keeping a clean driving record and taking advantage of discounts might help you save money month after month.

Check out other unique articles on our blog for more detailed information and do well to share with your friends and family. Follow us on our Twitter and Facebook to stay updated with premium information.