There are many things to consider, but first and foremost, you’ll want affordable car insurance for your young driver that is going to offer some protection for them, as well as you.
For young people, driving can often feel both exhilarating and frustrating. It is exhilarating because driving offers a sense of freedom and mobility. It is frustrating because the world of automobiles is full of confusing elements and rules.
One of those elements is most definitely auto insurance. It is difficult for any driver to figure out exactly how much insurance coverage they need. If you are a young driver or helping a young driver get car insurance, that question is even harder to answer.
That’s where we come in. Our guide will help you discover which car insurance is best for young drivers, as well as how to save money on the monthly premium!
Why Young Adults Pay More for Auto Insurance
If you’re reading this, chances are you have discovered just how expensive it is for young adults to get car insurance. Before we go any further, we need to answer the big question: Just why do young drivers have to pay so much for car insurance?
There are several reasons why it’s difficult to get cheap car insurance for teen drivers, and they are all related. It all comes down to how much risk the insurance company feels it is taking by insuring a young and less seasoned driver.
First, young drivers are inexperienced, making them likelier to get into at-fault accidents. Second, young adults are likelier to engage in risky driving behavior. Statistics back this up.
In terms of numbers, the CDC calculated that in 2019 an average of seven teens died each day due to automobile crashes and hundreds more were injured. Insurance carriers would lose money if they offered cheap coverage to the people who are likeliest to get into a car accident. Fortunately, there are a few different ways you may be able to lower your monthly premium.
Importance of Affordable Auto Insurance
As a driver of any age, you should carry an active auto insurance policy. This is a good time to discuss the numerous benefits to having one, such as the following:
Financial Protection
Auto insurance pays for the cost of damages and injuries sustained by first and third parties in an accident up to specific liability limits. It helps cover the cost of repair or replacement of vehicles and property, along with medical expenses and lost wages. Failure to have an active policy will force all damages to be paid out of your pocket, resulting in a hefty financial burden.
Your policy will help pay for property damage, if someone’s auto is wrecked in a crash you cause.
Peace of Mind
Getting into a crash is traumatic, even if there are no injuries. Add to that the aftermath, which involves tedious paperwork, time-consuming and confusing negotiations with other affected parties, rental car decisions and more. With the right policy, you’ll have the help of professionals to navigate through it.
Optional Coverage
Today, auto insurance companies provide additional benefits beyond liability insurance. These include rental car reimbursement and roadside assistance. Any vehicle breakdown in the middle of nowhere can be easily covered, resulting in greater peace of mind.
Understanding Types of Coverage
The easiest way to lower or raise your premium is to change how much car insurance coverage you have. Do you know what these types of coverage are and why each one is important? While there are other types of insurance you can add, the three main types of insurance are liability, collision, and comprehensive.
In an at-fault state, liability pays only for damage that you have caused another driver when you are determined to be the cause of the accident. In a no-fault state, no matter who is at fault, your liability pays for only your own damages.
Depending on the state you live in, liability is typically the minimum legally-required insurance you must carry. Some states require additional forms of coverage, such as Personal Injury Protection (PIP) designed to pay for your medical bills and uninsured/underinsured coverage to protect you against drivers who cause an accident and are not carrying any or an insufficient amount of car insurance.
Collision pays only for damage to your car. Comprehensive insurance covers many things that can happen to your vehicle when you aren’t driving (including theft and vandalism). These two together, plus liability, make up what is known as full coverage.
If you have all three types of coverage, this is known as “full coverage.” This offers serious protection, but it also increases your bill. Teen drivers – and their parents – must eventually strike a balance in how much coverage they need and how much they want to pay. Talk to your agent about the benefits of a family plan.
Take note that your protection is only up to the amount you have chosen on your policy. In other words, if you are in an accident and your medical bills are greater than the $25,000 your policy covers, you may be paying the remainder, plus your deductible, out of pocket.
Full Coverage May Be the Best Option
At this point, you might think that the math is very simple. If having more than one type of coverage adds to the bill, then you can keep costs low by only getting the minimum insurance coverage, right? In most cases, that means only getting liability coverage.
In terms of the monthly bill, it’s true: Having only liability coverage will lead to the lowest possible bill. But this could end up being very expensive if you or your young driver gets in a wreck!
Keep in mind that the state-required liability coverage only pays a minimal amount for medical and property damages. In most states, that means it will pay to fix damage to other vehicles but not your own. If you are at fault for an accident, having liability only will not repair or replace your vehicle. If the wreck is bad enough, you may end up with no vehicle at all.
Our advice? Young drivers should have both liability and collision coverage, at the least. This makes sure you can get your vehicle repaired or replaced regardless of who was at fault.
Factors that Influence Auto Insurance Rates for Young Drivers
Many young people get annoyed when their parents suggest older, safer cars as a first vehicle. Left to their own devices, most young people would like to drive something sleek and sporty. But this is one of those cases where mom and dad are right.
Car insurance carriers are already factoring your age into how much you pay. Generally, teen drivers pay the most for car insurance, though that price will naturally decrease as you get older.
While you can’t change how old you are, you can change what you drive. Insurance carriers pay attention to which types of vehicles are involved in accidents more often. So driving around an old “beater” of a car may not be very exciting, but it may be a good way to keep your monthly bill down.
Here are some other factors insurers take into consideration.
Age
One of the first things underwriters look at is age. That’s because statistics show that inexperienced people behind the wheel tend to have a higher incidence of crashes and traffic violations. Insurers cast a skeptical eye on 16-year-olds getting their first driver’s license. That’s part of the reason why their policies have higher rates.
The national average for teenagers is based on age. For example, 16-year-olds pay $576 on average across the United States. The good news is that amount drops significantly year by year until the mid-20s – as long as the driving record is clean of claims for wrecks and traffic violations.
Gender
The unfortunate news is that males will pay more than females. Again, statistically speaking, young males are more likely to have higher rates of claims. According to the Insurance Information Institute, young males are more likely to speed.
Location
As with any policy, the location of the vehicle is part of the underwriting factors. Some areas (zip codes) have a higher incident of claims. This may be due to population density or crime, but your zip code will have an impact on your rates.
Vehicle Type
As mentioned before, older vehicles are a good idea. This is because they are typically cheaper to repair. Other considerations include they are less likely to be involved in high-risk driving behavior, such as racing, and are less susceptible to theft.
Driving Experience
Underwriters love to look at someone’s driving record as a major factor in their rates. Unfortunately, newbies behind the wheel don’t have a history. So, insurers are left to base their premiums on statistics and guesswork. It’s vitally important to keep this in mind if you want to see a rate reduction in a few years.
Driving Record
As mentioned above, your driving record tells a potential carrier a lot about you. People with problematic records are not going to get the cheapest option. Those go to people with a good record. Most insurers have a look-back window of 3-5 years, although some use 10 years, so if you’ve made mistakes, you may need to concentrate on keeping things clean and safe before you’ll see your costs go down and you’ll be offered a more affordable option.
Tips for Finding Cheap Auto Insurance for Young Drivers
Speaking of keeping your bill down, what if lowering your bill was as easy as picking up your phone or checking your mobile app?
Every insurance carrier offers special discounts to drivers. These discounts are based on certain driver behaviors and groups. Best of all, you may already qualify!
For example, many carriers offer a good student discount. If you typically maintain a high GPA, then letting your insurance company know about it could save you money each year.
Carriers typically offer safe driving discounts, as well. If you’ve been driving for a while and kept a clean driving record, then you may qualify. You can usually receive another discount if you’re willing to take a safe driving course.
There are many other discounts available, and that means you may already qualify for plenty of different ways to save money. But you won’t know which discounts are available until you call the carrier. And for that matter, you should compare by exploring quotes and discounts from a variety of different carriers.
Comparison Shopping
It’s always a good idea to compare prices on anything you purchase. When comparing insurance quotes, make sure you are comparing apples to apples. In other words, make a list of the features you want and need while shopping for insurance products, such as liability, comprehensive, collision and more. Do you want a policy that has roadside assistance? How about rental car reimbursement?
Find companies that have good reviews and high customer satisfaction and start comparing!
Consider a Higher Deductible
A higher deductible means a lower premium. This is because your deductible is the amount of money you will pay on a claim, while the insurer picks up the rest to your policy limit. The less the carrier has to pay, the better for your monthly payment.
However, make sure you have those funds available. If you raise your deductible to $1,000 and you file a claim, you’ll need to be able to come up with that amount.
Choose the Right Car
A reliable car with anti-lock brakes and other safety features will see a lower rate. This is because of a good safety record, as well as the availability of cheap parts. Foreign autos or sports cars are more expensive because they have a higher rate of being involved in risky driving behavior, as well as being stolen. And when they need repair, it can cost more.
Opt for Lower Miles
If your teen will not be driving much, you may be able to get a discount for low mileage. Get some information from your agent on what they consider an annual low mileage amount.
Take Advantage of Discounts
We’ll dive into some discounts that are especially relevant to your newbie, but you should always ask your carrier for any additional information about discounts they offer, whether it’s regarding a policy for parents, teens or both.
Increase Your Credit Score
It’s important to talk to your kids about credit. A good credit score will help them later in life. Some states still use credit score to decide on rates, so if your own credit score is less than good, you’ll be paying more in these states. The trend is going more towards not using credit scores, but it’s still important to talk to your kids about establishing and maintaining good credit.
Auto Insurance Discounts for First-time Drivers
As promised, here are some discounts you may be able to use to lower your costs when that new driver gets behind the wheel. Remember, putting them on your existing parent policy will probably be the lowest cost – assuming the parent is not paying high rates themselves due to risky behavior. A teen with their own policy will most likely be paying the highest rates.
Good Student Discount
Insurers tend to think full-time students who maintain good grades are less likely to engage in risky behaviors. In most cases, this applies to full-time college students, although some companies will look at high school juniors and seniors.
Defensive Driving Course Discount
Taking a defensive driving course can help the rates of adults and youngsters. It shows your insurer you are serious about being a safe driver and learning how to avoid wrecks. This is an easy way to get a potential price break.
Multi-Car and Multi-Policy Discount
Families who can potentially purchase more than one product from the company can generally get a big discount. This is one of the best things you can do to lower your rates. Say you have home insurance or renters insurance through a company, If you add your auto insurance to it, you can save upwards of 25%. This is also true for multi-vehicle families.
Student Away from Home Discount
If your child goes to college and leaves their ride behind, they may be eligible for a discount. In many cases, students can use shuttle buses, bikes or walking to get around campus and nearby areas.
Technology-Based Discounts
More and more companies are offering good driver or safe driver discounts. In most cases, that involves installing a monitoring device so they can see how you drive, as well as how much you drive. If you decide to go with a usage-based program, you can get a discount for driving fewer miles annually.
Adding Teenage Drivers to an Existing Policy
Adding your teen to your policy will make your rates go up. However, it will still be cheaper in the long run. Letting them drive without insurance can have a major impact on them – and you. Likewise, if you force them to get a standalone policy and they don’t pay the premium, anything that happens while they are a minor in your household may have legal fallout for you.
Educating Young Drivers on Safe Driving Practices
The parental influences on how a child operates a motor vehicle are of utmost important. Teaching them how to make a good choice will affect many areas of their lives. Giving them the information they need to make those choices is paramount.
One of the best things you can do as a parent is to model safe driving practices. Never drink and drive and never drive distracted. Put the cell phone away. Always drive the speed limit and obey traffic rules. Your children learn more from watching you than from any other source.
Establishing and Enforcing Driving Rules
You already know that consistency is a major key to raising a child with healthy boundaries and responsible behavior. Once your child gets behind the wheel, make sure your expectations are clear and outline the repercussions of not obeying the rules.
There are products out there to help you monitor behavior behind the wheel. Since you cannot be everywhere at once, a tool such as this may be a good choice.
The Cost of Insuring Young Drivers
We’ve covered the reasons why youngsters have high rates, as well as some methods to help lower those costs. Even more importantly, teaching your child about safety and responsible behaviors behind the wheel is critical.
A good exercise is to let your child help you shop for car insurance. Letting them see what rates are and how they are factored, as well as the importance for their future rates of driving safely, can go a long way to making sure they practice good behaviors.
So, make sure they are buckled up with the radio, phone and other distractions put away and help them become the next generation of safe drivers.
Get the Best Car Insurance for Young Drivers Today
Now you know everything teen drivers need to know to get the best coverage at an affordable price. But do you know which carrier is ready to offer that to you, here and now?
Freeway Insurance helps drivers of all ages get the coverage they deserve. To make things easy for you, Freeway Insurance can quickly and easily provide you with an online quote. Feel free to give us a call at (800) 777-5620 or visit us at an office near you.
