Insurance Rates For New Drivers

What Else Affects My Car Insurance Cost

There are additional factors you may need to consider that can affect insurance rates. Here are some of them:

• More specific location data such as your ZIP code or city.

• Your occupation, in many states.

• Your previous insurance company. If it was a nonstandard insurer specializing in high-risk drivers, you might see higher insurance rates with some companies.

• Continuous insurance coverage. Companies charge more for drivers with lapses in coverage.

• Annual mileage driven per car.

• Your marital status. Some insurers believe married people drive more responsibly, which means single people even widows, widowers and divorced folks tend to have higher insurance rates.

How Much Does New Driver Insurance Cost

If youve just passed your test, your car insurance will usually cost more than an experienced drivers. When insurers calculate the risk you pose, inexperience tends to push the price up.

The cost can be particularly high for new drivers under 25, because statistically 17-24 year old car occupants have a higher accident fatality rate than 25-74 years olds.

The good news is your insurance should get cheaper the more experienced you gain. Thats assuming you dont have to claim, and you build up a no-claims bonus .

Check Out Cheap Insurance Companies

Sometimes it is best not to go with the big name insurance companies, especially if you are a new driver. There are many cheap insurance companies out there these days, and they often offer special rates for new drivers. Sure, your rates are still going to be higher than the rates of more experienced drivers, but they will still be less than what other larger insurance companies will charge.

Usually, you will get the very basic insurance with these types of policies, but this is better than nothing, and it may be all that you can currently afford. After you have been driving and insured for a while, you can always see what the other bigger insurance companies offer, and make the switch when you are eligible for lower rates with those companies.

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See What You Can Save On Car Insurance

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If you are a new driver, however, even if you are 25 years or older, you might be subject to higher rates. This is because as a new driver, you don’t have the experience that a traditional 25-year-old has, which is what qualifies them for the insurance discount. You will likely experience rates similar to a 16-year-old driver.

Fortunately, according to Car Insurance Companies, you might receive discounts faster than a teenager. You might notice a decrease in rates within three years of driving experience. You might need to wait up to eight years to see a significant decrease, however. You should notice a significant decrease by the time you reach age 30, and insurance rates will continue to decrease in your 40s and 50s.

If you receive numerous traffic violations or at-fault accidents during this time, your insurance rates are unlikely to decrease, regardless of your age.

Does My Child Have To Take A Driving Course

In between their driver’s permit and getting their actual license, here’s something to keep in mind: driver’s training. While driver’s training may not be mandatory in most provinces, having your child complete the course comes with a ton of benefits. Not only will they be more prepared for their next licensing test, they’ll be better educated on the rules of the road that will help keep them and everyone else safe. And while safety is a main priority, let’s not forget about the money you can save, too. Did you know that by having your child complete driver’s training, it could help reduce the cost of their car insurance? What may cost a couple hundred dollars up front, will have your young driver saving more in the long run.

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Average Auto Insurance Costs For A 20

For a 20-year-old driver with good credit and a clean driving record, average car insurance rates are:

• $3,325 for full coverage.

• $1,191 for minimum required coverage.

But young drivers with blemished credit or a less-than-perfect driving history are likely to shell out more for car insurance.

Check with several companies to find the best possible rate and be sure to ask about car insurance discounts for young drivers.

How Much More Do New Drivers Pay For Insurance

by Christy Bieber |Published on Aug. 31, 2021

Image source: Getty Images

Premiums are a lot more expensive for drivers without a lot of experience on the roads.

New drivers are at a much higher risk of being involved in an accident than more-seasoned motorists.

New drivers are often younger and more prone to high-risk driving behavior, which increases the chance of a collision occurring. They’re also still mastering the rules of the road and getting used to operating their vehicles safely.

Unfortunately, because of the fact that inexperienced motorists present a greater risk of a collision, auto insurance companies tend to charge them a lot more money for insurance coverage.

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How To Get Cheap Car Insurance For First

The best way to find insurance for new drivers thats not too expensive is by shopping around and comparing quotes, but you should also:

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How Does Driving Record Impact The Cost Of Car Insurance

• Speeding ticket: Earning a speeding ticket conviction may be one of the most common driving infractions and, on average, it increases full coverage premiums by 21 percent. Every car insurance carrier will have its own algorithm for determining rates after a speeding ticket. For example, even after a speeding ticket conviction, Erie and USAAs average car insurance rates are around $1,400 annually, both below the national average cost of car insurance.
• At-fault accident: An at-fault accident on your record could raise your monthly full coverage car insurance payment from $148 to $210, and increase your annual premium by 42 percent. If this is your first accident and youve previously added optional coverage like accident forgiveness to your policy, you may be able to avoid the surcharge.
• DUI conviction: Being convicted of a DUI could raise your monthly full coverage premium to nearly $300, and stay on your driving record for 10 years or more. The amount surcharged will also vary in each state. For example, the average cost of car insurance after a DUI for a full coverage policy is $3,539 per year in Kentucky, but around $5,530 per year in Louisiana.

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Best Car Insurance For New Drivers Under 25

Allstate offers the cheapest minimum-coverage car insurance rates for first-time drivers under 25 years old. On average, new drivers can expect to pay $2,743 per year for insurance. However, Allstate’s policy costs 56% less at $1,205 per year.

Find Cheap Auto Insurance Quotes in Your Area

New drivers looking to purchase full-coverage insurance can find the best rates with State Farm, where a policy costs $3,308 per year or $276 per month. The average for full-coverage insurance is nearly double State Farm’s rate at $6,527 per year.

*USAA is only available to current and former military members and their families.

Minimum-liability policies are usually the cheapest form of insurance because they provide the lowest level of coverage you can legally carry in your state. Affordable rates might make minimum-coverage auto insurance seem like the best option, but if you’re involved in an accident, you could end up paying more out of pocket in the long run.

For this reason, we recommend purchasing a full-coverage auto insurance policy rather than a minimum-coverage policy.

Teenage Car Insurance Discounts And Savings

State Farm offers several discounts that may help teen drivers lower the cost of car insurance. Check with a State Farm agent for the discounts you, or your teen, might qualify.

Good Student Discount

Save up to 25% if your teen driver gets good grades. The savings may last until your teen turns 25. Their most recent report card might be the key to lowering their premium. Homeschoolers may also qualify with other options, such as submitting evidence theyve taken certain national standardized tests administered within the past 12 months and ranked in the upper 20%. Ask a State Farm agent for requirement details.

Driver Training Discount

Qualify for a discount if all the operators of your vehicle under the age of 21 complete an approved driver education course.

Student Away at School Discount

Learn if you can save if one of the operators of a covered vehicle is a student under the age of 25 who moves away to school and only uses the car while at home during school vacations and holidays.

Other options to reduce young adult insurance premiums

If right for your situation, you can also lower your premium by:

• Purchasing a safe car for your teenager
• Reducing or removing comprehensive/collision coverage if the teens car is low value
• Increasing the deductible on their coverage

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Speeding And Traffic Tickets

If it’s your first speeding ticket in three years, you may not get an increase at all. But, if you get two or more tickets in a three-year period, you’ll likely get an increase. The good news is that the increase won’t be permanent, and speeding tickets typically fall off your motor vehicle record after a few years.

Learn more about how speeding tickets impact your insurance rate.

Safety Resources For Teen Drivers

• Teen Drivers channel on You Tube: Subscribe for safety videos for and about teens.
• Teen Driving Resources: Find brochures, presentations, and a parent-teen contract for educating teens and parents on the challenges facing young drivers.
• IIHS Teen Driver Info: The Insurance Institute for Highway Safety has information and statistics about graduated licenses, safe cars, and more.
• Are you a distracted driver?: From cell phones to eating your lunch, distracted driving is common and dangerous. Think you know how to drive and multi-task? Read on for tips that might surprise you.
• Parents’ Role in Teen Safety: Tips to help parents shape a responsible driving attitude for their teen driver.

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How To Get Cheap Car Insurance

But you can still find cheap car insurance by shopping around for rates every year and every time something major happens in your life, including marriage, a new job, moving or buying a new car. Additionally, if youve had a recent at-fault accident, DUI or other traffic violation, be sure to shop in the month after the third and fifth anniversaries of the incident.

If youre ready to shop, you can check out the cheapest companies in your own state for several driver profiles.

Car insurance costs $136 per month on average, according to NerdWallets rates analysis. However, your rate will vary depending on factors such as where you live, the vehicle you drive and your driving history. Compare car insurance rates to find the cheapest car insurance for you.

On average, full coverage insurance costs about $136 a month compared to $47 a month for minimum coverage. However, unlike minimum coverage, full coverage insurance pays out if your car is stolen or you need repairs after an accident. Minimum insurance covers damages to another person or vehicle only in an at-fault accident. It does not cover your own repairs or injuries.

Its hard to say exactly who pays the most for car insurance since there are so many factors that affect your auto insurance rates. In general, teen drivers, drivers with a recent DUI and drivers with poor credit pay some of the highest car insurance rates on average.

Do New Drivers Need Car Insurance

Regardless of your level of driving experience, all road users must have car insurance.

Car insurance is there to protect other road users and pedestrians, not just your own car. Thats why third-party car insurance is the bare minimum you legally need.

Driving without insurance is illegal. If youre found to be driving without insurance youll be fined £300 and get six penalty points on your driving licence. If the case goes to court, you face an unlimited fine and a driving ban.

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Choose The Right Car And Insurance Policy

Your new driver may have their heart set on the car of their dreams, but its important to remember that a luxury car is likely going to cost you more in insurance. Your best bet when buying a teens first car is to find one that is safe and reliable, as this is often less of a risk on the road or your wallet.

However, if your teen does have a luxury vehicle, it may be cheaper for them to be on their own car insurance policy, since chances are the insurance premiums will be significantly higher than other cars within your policy. It may also make more sense for them to purchase their own policy if either parent has any DUIs or multiple moving violations, as adding a teen driver can make the current policy cost even more.

In most cases though, its generally cheaper to add your teenager to your household car insurance policy. While doing so will increase your insurance rates, your policys coverage and deductibles will also apply to your teen. You may also be able to save money by signing up for a multi-car insurance policy.

How Much Is Insurance For New Drivers

If you recently got your drivers license, expect to pay more for new driver insurance than friends and loved ones whove been licensed for years. Younger drivers under 25 and older drivers over 50 will see the highest premiums. To give you an idea, lets look at a common scenario a resident of a large city where its typical to not own and drive a car, but who decides its finally time to do so.

Heres a table that gives you an idea of how much insurance for new drivers will cost. The driver profile used for the rates provided is a newly licensed vs. experienced male driver, age 30, living in New York City, driving a 2017 Honda Accord, insured for both state minimum and full coverage, including optional comprehensive and collision coverage with a $500 deductible.

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How Are Insurance Premiums Calculated

First-time drivers, on paper, are the riskiest to insure. Although rates will vary, new drivers have no driving history, making them high-risk in the eyes of insurance providers. Insurance companies use a wide range of information to determine your monthly premium. They collect your individual data to determine how risky you are to insure. They want information such as:

• Insurance history

Older drivers have had more experience behind the wheel, so insurance companies don’t consider them as risky to insure as teenagers. For this reason, teenagers should expect to pay higher rates, as they are more likely to be involved in an accident, says NerdWallet. Even if you are a safe driver, you haven’t had enough experience on the road to prove to the insurance company that you are low-risk. Unfortunately, this results in higher rates for anyone who does not have much driving history.

Get On Your Parents Policy

New drivers who live with their parents typically receive much lower rates when added to their parents car insurance than they do for their own policies.

From an insurance companys perspective, your parents history of responsible driving offsets the perceived risks you present as a new driver, assuming your parents dont have major accidents or violations on their record.

In separate research, we found that new teen drivers are charged 48% less for car insurance when they are added to their parents car insurance.

Parents can usually add a child of any age living in their home to their car insurance, though the specific rules about adding drivers to your car insurance vary by company.

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Compare Car Insurance Quotes For New Drivers

Car insurance is more expensive for new drivers because youve got less experience to show insurers youre a safe driver. You wont have any years of no-claims to get a no-claims discount either.

Thats why its important to do your research and compare quotes so you can find the right cover for you at the best price.