The main takeaway:
- New drivers are people who do not have a valid driving history in the United States and can include teens who are only learning to drive, people who have chosen not to drive before or had a gap in coverage, and those who have recently immigrated to the United States.
- There are many discounts and savings methods in car insurance for new drivers, including multi-policy discounts and good student discounts. As the parent of a teen driver, it will usually be less expensive to add the teen to your policy than to get a new, separate policy.
- It is helpful to compare prices to find the cheapest insurance for new drivers. Use our price comparison tool to find the best options when looking for new driver insurance.
Ahhhhh, you are finally going to drive! With a new driver’s license in hand, you can sit behind the wheel and enjoy the freedom of the road.
It’s exhilarating, exciting, and more than a little scary (especially for parents)!
But wait – you have to make sure you get the right car insurance for first time drivers. And since you have no experience or any history of driving, new driver insurance can be expensive.
In this article we look at what you need to get the best insurance for new drivers and how to save on your annual premiums.
Who is considered a new driver?
According to insurance companies, a new driver can be anyone who has never driven their car before and does not have a driving record to guide the insurance company in assessing their skills and experience.
This can include teens who are just beginning to drive, but also people of any age who have never driven before including immigrants who may have had driving experience in another country but have just started driving in the United States.
Teens and driving
Car insurance for first-time drivers is more expensive than for more experienced drivers because new drivers are more at risk of being involved in an accident.
These facts cannot be circumvented:
- The The second cause of death For teens in 2019 were car accidents. Although this number has decreased significantly in the past several decades (from 9,524 in 1980 to 2,375 in 2019), it is still relevant for insurance companies.
- Teen drivers aged 16-19 years old are almost three times Being in a fatal car accident such as those aged 20 or older (based on miles traveled).
This is due to the following:
- General inexperience
- Driving while distracted in the car, loud music, texting or talking on the phone
- Not using seat belts (according to the CDC, more 40% of high school students Do not wear seat belts when riding in cars driven by friends)
- reckless driving
- poor driving
- Driving at night
Types of car insurance for new drivers
If a new driver lives in an already insured home, whether it’s a teen or an adult, it’s usually cheaper to add the person to the existing policy. In fact, most states only allow teen drivers to implement an individual policy if the vehicle is registered in their name.
Adding an additional driver will increase the cost of the policy, and if this new driver is a teenager without a driving record, this cost can be significant.
An alternative solution could be a usage-based or pay-per-mile policy. Through the use of remote IT (an additional device that monitors miles, speeds, stopping frequency or “hard braking,” etc.), the insurance company can monitor driving and charging habits per mile. This can be a good alternative for those who do not have a long commute or when trying to curb risky behavior in teens.
How are car insurance rates calculated?
When searching for the best car insurance for new drivers, it is helpful to understand all the things that affect the cost of a car insurance policy.
Insurance companies set policy premiums based on a variety of historical factors or actuarial data. Basically, they keep historical information about everything. From there, they use risk prediction analysis, based on a person’s personal history and driving group as a whole, to determine how likely someone is to have an accident.
Insurance companies will take into account the following:
This will include age, gender, location, commuting miles, and crime rate where you live and work. For new drivers, it is important to update your mileage to and from work or school so that your carrier has accurate information.
All teenagers dream of driving a hot sports car with loud music playing from the windows as they roam the highway at full speed.
Fortunately, most parents know how dangerous this can be and choose safe car options.
Premiums depend on the type of car a person drives, and safety ratings make a huge difference when it comes to saving money on cheap car insurance for new drivers. (Plus, there are discounts available for different types of safety gear.)
Based on safety, this is it Top ten used cars for teens And new drivers if you want to save money on insurance premiums:
- Mazda 3
- Toyota Prius
- Honda Civic car
- Subaru Forester
- Honda Accord
- Hyundai Tucson
- Toyota RAV4
- Ford Edge
- Toyota Highlander
- Toyota Sienna
New drivers’ auto insurance will have some coverage options, but most states require a minimum level of liability coverage. Be sure to check your status here if you have questions about the requirements.
Here are the four main components of coverage available today:
- responsibility Liability insurance covers other people, including damage to another’s vehicle and property, and their medical coverage if they are injured. This is considered the minimum coverage and is required in nearly every state (except New Hampshire and Virginia where a person is still personally liable for damages).
- collision Coverage that repairs or replaces the insured’s car, whatever the defect. If you rent or finance a car, this type of coverage will be required to name the rental company or bank as the primary lien holder.
- Inclusive Coverage for the insured’s vehicle that pays for damage caused by non-accident events, such as fire, theft, weather-related disasters, falling objects, or vandalism.
- Uninsured motorist Covers damages caused by an uninsured driver, including medical and funeral expenses.
Insurance companies want to know what kind of driver a person is before they agree to take the risk. When they look at the cost of new driver insurance, it is difficult for the insurance company to know how someone is performing on the road because there is no history.
This is where they completely retract actuarial data for the same age group in the same region or location. This leads to higher premiums until a driving history is established.
Credit score and credit history
A credit score is used for more than just getting a new credit card. Insurance companies use a person’s credit report and score as a personality reference. The belief that you can tell a lot about a person by the way they handle their finances, basic insurance coverage and premium decisions about whether someone has poor, fair, good or excellent credit.
For new drivers, this can affect their ability to get insurance and how much they will pay for coverage since teens and those new to the US usually don’t have a significant credit history yet.
City or county of residence
Insurance companies adjust their coverage rates based on what is happening in different regions. If someone lives in an area with increased crime rates or more climate-related disasters, there is a good chance their car insurance premiums will go up as well.
Ways to Find Affordable New Driving Insurance Quotes
There are ways to positively impact car insurance for new drivers and get more affordable premiums.
Keep your family car insurance policy
Putting a new driver on a family insurance policy is one way to cut costs. This can help control costs as well as give the new driver time to establish a safe driving record before they are alone.
Trade in that luxury sports car
We have already talked about the safest cars for new drivers, but this does not always matter. When choosing a new graduation or Christmas gift, remember that a safe car will save money in the long run and may help tame the brutal nature of the teen behind the wheel.
Increase the deductible
Insurance policies can be customized with a discount that saves money on monthly premiums. A $0 discount policy will be much more expensive than one with a $500 or $1,000 discount. By increasing the deductible, the cost may be more manageable for the new driver.
Shop around to get the best price
Insurance seems to be a fixed cost that people get used to paying and don’t question. At first, and every year after that, it’s a good idea to check the market for new quotes for driver car insurance. Prices change and conditions can change as well.
It is always good to know the average price based on your situation especially when a new driver is gaining experience.
Get all the available discounts
Whether it’s an individual policy for a new driver or as an add-on to a family policy, it’s always a good idea to review the available discounts, including:
- Defensive Driver Course – Discounts are available for taking a defensive driving course or driving course for students, which is not only beneficial for cost savings, but can be invaluable for a new, inexperienced driver.
- Good Student Discount – Most insurance companies offer a discount when a high school or college student maintains good grades. In most cases, they want to see an average GPA of 3.0, B or higher.
- Multiple policy discount – Companies often offer discounts when there are multiple policies or drivers in one home. This can include home or renters insurance, life insurance, or recreational vehicle insurance.
- Safety Equipment Discount – If the vehicle is equipped with safety or anti-theft equipment, most insurance companies will offer a discount as long as the equipment is in good working order and is used.
- Military or job-related discount – Many insurance companies offer military or job-related discounts.
- Auto Pay Discounts – Save up to 1% by paying through our Auto Pay Program.
Get the best price
For new drivers, getting the best price comes from finding a reputable insurance company that offers new quotes for driver’s car insurance.
In the past, this meant a great deal of leg work. Contact different insurance agents, get references from friends or family, and compare mounds of information manually. At best, it was a waste of time – at worst, you were left in a confusing mess and not sure where to head for help.
Fortunately, today things are much easier with the availability of online insurance quotes. Sure, you should still talk to an agent, but now you know what to expect and what questions to ask.
For new drivers, it is important to understand coverage options and what you can do to reduce costs now and in the future. Will a safe driving record help? Does improving your credit score help? These are things to prepare for over time to lower your premiums.
All insurance companies look at similar things as we’ve discussed, but they don’t reveal the exact details. Therefore, it can be very helpful to look at the rates for all the major insurance companies. There is no way of knowing where your particular circumstances will rate the best offer.
Contact us at einsurance.com and start comparing auto insurance rates for your new driver’s insurance today.