Do you remember the excitement of getting your first car or driver’s license? The freedom to go anywhere at any time is exhilarating. However, with that freedom comes a responsibility that many new drivers overlook: car insurance. Inaddition to gas, you could pay an average of $2,472 annually for teen drivers aged 17 and under. Insurance is a must in the United States, but how can you keep prices down?
Whether you’re a parent covering your child or a new driver, insurance premiums for young drivers younger than 25 are among the highest. Below you’ll find nine steps to secure affordable and comprehensive insurance to protect yourself or your child.
Why it can costs more to insure young drivers
Insurance companies have to protect their profits in case of a higher probability of accidents. For this reason, insurance premiums are based on statistics. How statistically likely a driver in a specific demographic is to have an accident and need insurance coverage will affect premiums.
Age, gender, credit score, and accident history can all also impact premiums on auto insurance for young drivers. Building a strong credit score could help insurance premiums drop over time. And a clear driving record can reduce premiums with time.
According to the U.S. Department of Transportation’s Fatality Analysis Reporting System (FARS), in 2021, rates of fatal driving accidents were substantially higher for males than for females ages 16 to 29, which drives insurance premiums higher.
9 Steps to securing one of the best car insurance for young drivers
Securing auto insurance for young drivers is so important to protect you, so in case something unfortunate happens, you’re not also strapped with debt. The key is to find insurance for young drivers that balances coverage with cost. Here are nine steps to finding the best options in your area.
1. Research different insurance providers
Step one in finding one of the best insurance for young drivers is research. You can request quotes online from as many insurance providers as you want without further obligation. In addition, consider local or regional insurance options. You may be able to get better pricing under a parent-child insurance arrangement where the same insurer covers all family cars.
At this stage, start to consider what type of auto insurance for young drivers you’ll need. you’ll want to familiarize yourself with the different coverage and pricing options available. Get familiar with insurance terms like liability coverage, collision coverage, and comprehensive coverage.
2. Compare coverage options
From the statistics above, it’s clear why young drivers are typically considered high-risk drivers and why young car driver insurance costs more. Knowing this, young drivers may need additional coverage to be adequately protected. This can include:
- Liability coverage protects the young driver in case the accident is their fault.
- Collision coverage protects them in case their vehicle is in an accident that is someone else’s fault.
- Comprehensive coverage typically includes liability coverage and collision coverage, but read the fine print to see what the plan excludes.
- Personal injury protection adds additional insurance to cover medical expenses and lost wages in case of an accident to the policyholder and any passengers.
3. Consider higher deductibles
A higher deductible can help offset costs by reducing the monthly premium. A deductible is an amount you’ll be responsible to pay before insurance covers the rest in case you are in an accident or need insurance coverage. Keep in mind that you or your family need to be able to pay this amount in case the worst happens, so don’t choose a deductible that is too high.
For many families, a $1,000 or $5,000 deductible will significantly reduce the monthly costs. If you’re confident you have safe driving behaviors or can pay the deductible if needed, some of the best insurance for young drivers often includes a higher deductible.
4. Look into usage-based insurance policies
Usage-based insurance (UBI) is an innovative type of insurance that allows insurers to charge premiums based on a customer’s driving behavior. This means that young drivers who demonstrate safe driving habits will be able to pay lower premiums because they are less likely to be involved in an accident.
Likewise, UBIs ask drivers for the average total miles driven per month or annually, and calculate auto insurance for young drivers premiums based on mileage as well as driving record. Typical UBIs look at when, where, and how much a vehicle is driven to calculate insurance premiums.
5. Compare insurance costs
Once you know what type of coverage you want, it’s important to compare insurance companies and their rates to find the best insurance for young drivers. In addition to driving record and credit score, some insurance companies will charge a premium if you plan to park the car on the street in certain areas.
Some vehicles require much higher insurance premiums than others. For example, a new sports car may carry a need higher insurance premium than a used sedan. If you’re buying a car, compare insurance premiums on the vehicles you’re considering to find one that has more moderate insurance costs.
6. Explore discounts for young drivers
Young drivers may be eligible for discounts for being good students or for taking a defensive driving course. Not all insurance providers offer these discounts, so be sure to compare rates to find the overall best insurance for young drivers.
Young driver discounts to consider:
- Distance student savings: This discount is given to students who go to college, usually 100 miles or more from home.
- Usage based car insurance: If the young driver doesn’t drive many miles per month, usage-based insurance can lead to greater savings.
- Good student discounts: Depending on the insurance carrier, full-time students can receive a discount.
- Defensive driver discount: These can improve young drivers’ skills on the road, reducing the likelihood of an accident. Typically, taking a course is required for discount eligibility.
7. Make the final decision
The best insurance for young drivers will be the policy that offers the best coverage at the most affordable price while still providing the necessary customer service and discounts. Decide what type of coverage you want, explore insurers offering discounts available to you or your young driver, and compare quotes.
8. Read the fine print
Don’t just sign if it ticks the overall boxes, and don’t be afraid to ask questions. Read the policy carefully before signing to ensure it covers everything you need. To find the best insurance for young drivers, ask questions about specific scenarios and what would be covered to ensure there aren’t loopholes in the insurance.
Examples of questions to ask include:
- What is covered if someone hits my vehicle while it is parked?
- What is covered if I cause an accident while driving?
- What is covered if my vehicle is damaged in a storm or other natural event?
- What is covered if my friend is driving my car and causes an accident?
- In case of an accident caused by another driver, will my medical expenses be covered and up to what amount? Where are they covered?
Gaining clarity on fine details can ensure your vehicle and your health are protected. If you’re confident you’ve got the best price for coverage, it’s time to sign.
9. Work on improving your driving record and credit score
Keep in mind that insurance rates are never set. They will continue to change for better or for worse based on your driving performance, credit score, vehicle type, location, and payment history.
Working to improve your credit score and driving record can lead to lower insurance rates over time. If you have a clear driving record and a good or very good credit score, you may be able to negotiate better rates next year on auto insurance for young drivers.
Which Is The Best Insurance For Young Drivers?
Researching auto insurance for young drivers will take time and involves reading the fine print. But with young driver discounts, bundling with a family plan, and taking a higher deductible you can find the best car insurance for young drivers to balance protection and costs.
FAQ
What is a good car insurance rate for young drivers?
A good car insurance rate for young drivers will depend on many factors, including their driving history, age, the make and model of the vehicle, location, and mileage driven.
How can young drivers get good, cheap car insurance?
Young drivers can get good cheaper insurance by getting as many discounts as possible — for good grades, safe driving history, driving short distances, and taking defensive driving courses. Some of the best insurance for young drivers is often cheaper when it’s bundled with their parents’ car insurance plan.
What types of coverage do young drivers need?
Young drivers typically need the same types of coverage as any other driver. This includes liability coverage to protect against damage or injuries caused to others, as well as optional coverages like collision coverage (for damage to your vehicle in an accident) and comprehensive coverage (for non-collision incidents like theft or natural disasters).
