Best Car Insurance for Young and New Drivers
It is difficult to control the excitement of youngsters once they get their driving license. They just want to get behind the steering wheel of a four-wheeler and zoom in style. Long midnight drives, weekend road trips, quick rides with a loved one; They are waiting for these cherished dreams to come true.
However, in the excitement of driving, youngsters should not forget the importance of car insurance. And of course, it is necessary to follow traffic and road safety rules. If you are new to driving or if you are a parent who is worried about your ward’s ‘first vehicle-riding experience’, read on to know more about car insurance for young and new drivers.
Car insurance for young drivers:
Apart from being a mandatory requirement, car insurance offers many benefits to first-time drivers. A car insurance policy is a promise made by the insurer to the policyholder and is governed by terms and conditions. It states that the insurance company will provide financial assistance in case of a car-related accident.
Young drivers do not have much experience when it comes to driving in traffic, for long periods or in difficult conditions such as winding roads or during heavy rain; Chances of making accident related claims are higher compared to skilled drivers. Therefore, car insurance is essential.
Comprehensive or third-party liability – which is better?
Car insurance is subjective. Thus, it is difficult to choose one type of policy as the best. However, one can assess what is best for the individual and then purchase the ideal policy. When it comes to young drivers, the scale tilts in favor of a comprehensive plan as it offers self-loss cover. This type of cover not only provides compulsory third-party liability coverage but also insures the vehicle against damage caused by accidents, fire, theft and calamities.
Nowadays, repair costs are extremely high. If you don’t have adequate car insurance, you may have to spend a lot of money out of your pocket to repair the damages caused due to accident, flood, fire etc. So, advice is given to new drivers and people buying new cars. To buy a comprehensive plan as it offers a wide range of insurance cover.
Also, read: What are Best Insurance Coverages (Step 5)
Car insurance quotes for new drivers:
Whether people have a new car or an old one, no one wants to pay a huge amount to buy car insurance. This is where a little research and analysis will help you save big by finding the right car insurance quote. You can get cheap/cheap car insurance for young drivers by understanding the factors that determine the quote.
Here is a list of factors that directly affect first time car insurance quotes for young drivers in case of comprehensive plans.
- Make, model and variant of the vehicle
- Registration location
- Types of Car Insurance Policy
- Add-on coverage if any
- Security features such as anti-theft devices
Not much can be done about the first two points. But the next three points are in your control. You can choose to choose a comprehensive plan from a digital insurer as they usually offer low-cost car insurance quotes for young drivers as well as experienced ones.
Be wise when choosing an add-on. They offer enhanced coverage but they also increase car insurance quotes. So, choose only add-ons that add value to the cover without being a burden as far as the premium is concerned.
For example, opting for zero depreciation and roadside assistance is an easy decision, however, you must assess your needs before buying specific add-ons like passenger cover, personal related cover, etc. There is no denying the fact that there are add-ons. . A useful question is, are they useful to you?
Installing an anti-theft device in your vehicle can prove to be a smart decision. This is because insurance companies offer discounts on car insurance premiums if your vehicle is protected by an anti-theft device. Make sure to buy only those devices that are certified by the Automotive Research Association of India (ARAI).
You can use a car insurance premium calculator to get quotes from different insurance companies. These quotes can be generated free of charge through aggregator websites as well as by visiting individual websites. Compare the quotes and coverage offered by various insurance companies and shortlist a few options. Check the credibility of these shortlisted insurance companies and then make your purchase decision.
Are there any eligibility criteria for buying vehicle insurance?
Driving a car without a valid driving license is considered illegal by the authorities. Similarly, driving without a car insurance policy is a punishable offence. If you are a first-time driver, you must obtain a valid driving license and then ensure that the vehicle is insured. In a way, it can be mentioned that you should have a valid driving license to buy car insurance so that you stay on the right side of the law while driving.
How much is car insurance for new drivers?
There are different types of new drivers. Groups that insurance companies will consider as new drivers include:
- Older drivers who have just obtained a driving license
- People with gaps in insurance coverage
A 16-year-old with a new driver’s license and no driving experience will pay the highest rate — teenagers pay nearly 100% more than the average driver. However, if you have gaps in insurance coverage, insurance companies will consider you a high-risk driver. That’s why it’s important to keep your car insurance active if you can.
Anyone with limited driving experience will pay more for coverage. The average annual cost of car insurance for a 16-year-old driver ranges from a low of $3,612 with State Farm to a high of $7,455 with Progressive. As you can see, shopping around can save you $3,843.
Related: The best and cheapest car insurance companies in Alabama for 2022
How to get cheap insurance as a new driver
Here are some strategies you can use to find cheap car insurance as a new driver.
Stay on family policy
If you are under the age of 25, it is cheaper to stay on your family policy instead of getting an individual policy for car insurance. You may have to switch insurance companies to get the best deal, but the savings can be significant.
The Insurance Information Institute recommends getting quotes from at least three companies before you settle on one. Even if you’re adding a teenager to your policy, it pays to get quotes from other companies. Insurance companies know that most people don’t think about their car insurance often and that your company isn’t offering you the best rate. Get a quote from your current insurer, plus at least two other companies.
Take advantage of discounts
Many insurance companies offer discounts, including:
Good Student Discount: These discounts are available from many different insurance companies, although they may vary depending on how they define a good student. Expect to provide evidence of at least a B average.
Bundled discounts: If you bundle your home and auto insurance from the same company, you can often get a 10-15% discount.
Defensive driver discounts: Check with your insurance company before you choose a course, as some maintain a pre-approved list of defensive driver courses. You can usually get an 8-10% discount for taking these classes, but even if you don’t get a discount, these courses can give you the skills you need to help prevent accidents. This makes them a good investment even if you don’t get a discount.
Full payment: If you pay your premium in one lump sum instead of making monthly payments, you can get a 5-10% discount.
Low mileage: If you don’t drive much, you may be entitled to a low mileage discount. Qualifying mileage varies from company to company. Some companies consider driving less than 7,500 miles in a year to be low mileage, and others consider less than 15,000 miles to qualify for a low mileage discount.
Green/Hybrid Car Discount: Driving a hybrid or electric vehicle can get you a 10% discount.
Drive a less expensive car
Some cars are more expensive to insure than others. Luxury cars are expensive to own and expensive to repair and require full coverage car insurance which will cost you more to insure. A high-performance sports car can add hundreds of dollars to your every year, no matter your age or where you live. A more practical car, such as a Toyota Camry, can be insured with liability car insurance, costing you less in insurance premiums.
Improve your credit score
Insurance companies use your credit score to determine rates because, according to Edmonds, people with higher credit scores get into fewer accidents and cost insurance companies less money. However, three states prohibit insurance companies from using credit scores to set premiums: Massachusetts, California, and Hawaii. Consumers in every other state should pay bills on time and not abuse credit cards, which will increase their credit scores and lower their insurance rates.
Choose a lower coverage amount
Every state (except New Hampshire) requires a certain minimum amount of liability insurance. It will look something like this: 25/50/20.
- 25 ($25,000): The maximum your insurance company will pay for injuries per person in an at-fault accident.
- 50 ($50,000): The maximum amount the insurer will pay for injuries per vehicle.
- 20 ($20,000): Maximum limit of property damage.
You’ll need at least your state’s minimum requirements, but you may want more.
Liability coverage does not cover your car or your medical bills. Additionally, if you cause an accident and hit a car with four people in it, the medical bills can quickly exceed the minimum amount of liability insurance required by your state. Those four people can sue you and if you don’t have enough coverage, you will have to pay their medical bills out of pocket, which can easily bankrupt many people. So, yes, you can only pay for the minimum amount of liability insurance, but that’s a risk.
MoneyGeek crunched the numbers and compared thousands of quotes for 16- to 25-year-old drivers from the eight largest national auto insurance companies. We also compared the rates for a 40-year-old driver who has been licensed since their teens to a 40-year-old driver with a new license.
To calculate the best car insurance companies, MoneyGeek claims to weight insurer affordability (30%), customer satisfaction (30%), satisfaction (30%) and financial stability (10%) to create a composite score.