New drivers can include teenagers, young adults, and older adults who for some reason never bothered to get a driver’s license. Because of their lack of experience, new drivers can pay a lot of money for car insurance, but there are ways to lower those rates.
Some of the least expensive insurance companies when it comes to new drivers include Geico, Travelers’ Insurance, and State Farm. But instead of concentrating on specific companies, it’s best to concentrate on the things these companies look at when determining their insurance rates.
What Can You Do to Save Money on Car Insurance Premiums?
The first thing you need to be aware of is that insurance companies base their premiums on one thing: how much of a risk you are to them. The more likely you are to need your car repaired or replaced, the more likely your insurance premiums will be pricy. Drivers under the age of 25 pay high premiums for car insurance, mainly because of their lack of experience.
It is this lack of experience, after all, that contributes to the chances they’ll have an accident at some point and will need their insurance company to jump into action. Statistics also play a part in your premium amount, and statistics show that it is more likely for new and young drivers to have accidents than it is for older or more experienced drivers.
Does this mean there’s nothing you can do to bring down your insurance premiums if you’re a young or new driver? Fortunately, the answer to that question is “no.” Let’s take a look at some of the things you can do to get a better insurance rate when you’re a new driver.
1. Add a New Driver to an Existing Policy
If you have a new driver in the household, adding that driver to an existing policy can be quick and less expensive than you might think. This is because the more people added to an existing policy, the lower the per-person rate becomes.
If you also buy that person a vehicle, you’ll get a multi-car discount as well. If the driver is a teenager, they’ll have to have their own policy once they move out, but for now, adding them to your policy is fast and painless.
2. Ask the Insurance Company for Any Discounts They Offer
Many insurance companies offer discounts for new and young drivers that include discounts for taking a driver’s education course, maintaining a certain grade-point average, or even those who have taken a defensive driving course. You don’t know until you ask, so you might as well ask the insurance company if they offer these types of discounts.
3. Get an Inexpensive Car and Limited Coverage
You can also save money by getting your teenager an inexpensive car and only having liability and underinsured/uninsured motorist coverage on your insurance policy. For now at least, you can skip collision and comprehensive insurance policies, and by doing this you can save an awful lot of money.
4. Make Sure the New Driver Is Driving a Safe Car
Insurance companies take into consideration the type of vehicle being driven, so by getting your teenager a car that has a high safety rating, you can save some money this way. While you’re at it, try to purchase a used vehicle instead of a new one, because the chances are good that your teenager will eventually wreck the car anyway.
Frequently Asked Questions (FAQs)
Will my rates automatically drop once I turn 25 years old?
Not necessarily. You’ll have to have a clean driving record and prove that you’re a responsible driver before the insurance company drops your rates.
Are there other discounts I can take advantage of?
There might be. Check periodically with your insurance company because their agents are familiar with every discount the company offers. You can’t just assume you’re familiar with all of their discounts.
Do I need to keep my insurance agent aware of what is going on with my car?
Definitely. Your agent needs to know if anything changes so that you can get every single discount you’re entitled to.
New drivers are usually very young drivers and therefore, their car insurance rates can be quite high. Although there are certain companies that tend to offer lower premiums for new drivers, there are also things that you yourself can do to increase the odds that your premium can be lowered.
Never hesitate to work with an insurance broker who works with numerous companies so that you can get a more personalized policy that will both suit your needs and be less expensive in the long run. Regular contact with your insurance agent is also important because that agent is likely to be aware of discounts you didn’t know about.
The bottom line is, inexperienced drivers are always going to pay more for car insurance, but it’s good to know there are things you can do to make the experience a lot less painful for you.