Young driver car insurance is likely to be expensive, but there are ways to rein in the costs and get your premiums down.
Young driver car insurance is likely to be expensive. Nevertheless, new drivers might be able to score a comprehensive deal by getting an idea of what affects how much teen drivers pay, what’s likely to cause rates and premiums to go up, and how to rein in costs by following the guide below.
Young Driver Insurance Tips
What goes into Car insurance premiums?
The amount you pay for your car insurance is called a premium. Think of it as the risk of you having an accident, or getting involved in a car crash, all the while taking into account your lack of car driving experience (the more experience, the fewer accidents, one can generally, in all probability, expect a lower premium).
Additionally, young drivers are more prone to risky behavior behind the wheel. This might include speeding, texting while driving, or driving under the influence of alcohol or drugs. These behaviors increase the likelihood of accidents and, as a result, drive up insurance rates (premiums) for young drivers.
Insurance companies will ask you for a range of details to work out what your monthly or yearly premium ought to be. This will include:
- personal details, such as age and postcode
- information about the car you’ll be driving
- level of cover you’re looking for
- miles you think you’ll be driving each year
- previous car insurance claims
- criminal convictions
- no-claims bonus – the number of years you’ve been driving without having made a car insurance claim.
- Degree of driving experience. Driving is a complex task that requires a combination of knowledge, skill, and judgment. As a young driver, you simply haven’t had the time to develop the same level of expertise as someone who has been driving for years.
This information allows the insurance company to build a picture of how ‘risky’ you are, and they’ll calculate your premium based on this.
The higher the risk or the higher the probability of you getting involved in a crash, for example, the higher the premium will be.
Factors That Influence Insurance Rates for Young Drivers
Insurance companies consider a variety of factors when calculating your insurance premium as a young driver. Some of the factors that can influence your rates include:
- Age: Younger drivers, particularly those under the age of 25, are statistically more likely to be involved in accidents and receive traffic violations, which leads to higher insurance rates.
- Gender: Data shows that young male drivers are more likely to engage in risky driving behavior and be involved in accidents than young female drivers. As a result, young male drivers often face higher insurance rates.
- Location: Where you live can have a significant impact on your insurance rates. Urban areas with higher population density and higher rates of accidents and vehicle theft tend to have higher insurance rates.
- Vehicle type: The type of vehicle you drive can also affect your insurance rates. Sports cars, luxury vehicles, and vehicles with higher repair costs typically come with higher insurance premiums.
- Driving history: Your driving record plays a major role in determining your insurance rates. A history of accidents, traffic violations, or DUIs can result in higher premiums.
- Credit history: In most states, insurance companies are allowed to use your credit score as a factor in determining your insurance rates. A lower credit score can lead to higher insurance premiums.
Understanding these factors can help you make informed decisions about your insurance coverage and take steps to lower your rates.
Car Insurance Levels of Coverage
When it comes to car insurance, one of the first things you’ll need to think about is what kind of coverage you want.
Here’s a quick breakdown of the main types of coverage you’ll encounter:
- Liability Coverage: This is the most basic form of car insurance and is required by law in most states. Liability coverage protects you financially if you’re found to be at fault in an accident. It covers the costs of property damage and medical expenses for the other party involved in the accident.
- Collision Coverage: This type of coverage pays for damages to your own vehicle in the event of an accident, regardless of who is at fault. If you’re financing or leasing your car, your lender may require you to carry collision coverage.
- Comprehensive Coverage: This coverage protects your vehicle from damages caused by events other than a collision, such as theft, vandalism, or natural disasters. Like collision coverage, comprehensive coverage may be required by your lender if you’re financing or leasing your car.
- Uninsured/Underinsured Motorist Coverage: This coverage protects you in the event that you’re involved in an accident with a driver who either doesn’t have insurance or doesn’t have enough insurance to cover the damages. This coverage is required in some states and optional in others.
- Medical Payments Coverage: This coverage helps pay for medical expenses related to an accident, regardless of who is at fault. It can also cover funeral expenses in the event of a fatal accident.
- Personal Injury Protection (PIP): This coverage is similar to medical payments coverage, but it also covers lost wages and other non-medical expenses resulting from an accident. PIP coverage is required in some states, known as “no-fault” states.
As a young driver, it’s important to consider your specific needs and budget when deciding which types of coverage to include in your insurance policy.
So which one should you get? If you would struggle to replace your vehicle if it was written off in an accident, it’s best to go for the highest level of cover – fully comprehensive.
Third-party cover might be the best option if your car is only worth a few hundred dollars
But fully comprehensive cover often costs less than third party. So it’s worth checking the price of both.
Reducing Premiums for Young Drivers
While insurance rates for young drivers can be higher than those for older drivers, there are still ways to find affordable coverage. Here are some tips to help you find the best insurance policy for your needs:
- Shop around: Don’t settle for the first insurance quote you receive. Instead, compare quotes from multiple insurance companies to find the best coverage and rates for your situation.
- Bundle policies: Many insurance companies offer discounts if you bundle multiple types of insurance, such as auto and renters or homeowners insurance, with the same company.
- Choose a higher deductible: A higher deductible can result in lower monthly premiums. Just make sure you can afford to pay the deductible in the event of a claim.
- Drive a safer, less expensive vehicle: Driving a vehicle with lower repair costs and a better safety rating can help lower your insurance rates.
- Maintain a clean driving record: Avoiding accidents and traffic violations can help you maintain lower insurance rates over time.
- Work on improving your credit score: A higher credit score can lead to lower insurance rates in most states.
Your Choice of Car Is Important
When it comes to reducing the premium for a young driver, one’s choice of car is important. Each car is assigned an insurance group number from 1 to 50, with 1 being the cheapest to insure and 50 the most expensive.
Driving a car in a low insurance group is the easiest way to reduce your premiums.
Adding a Second, Low-Risk Driver Can Help
Parents are a good bet, but they can’t pretend to be the main driver – this is called ‘fronting’ and is illegal.
Number of Miles Driven
When applying for insurance, you’ll be asked about how often the vehicle will be used and what distances you expect to cover.
Fewer miles and less frequent use can result in lower premiums.
Shop Around for the Best Deal
Comparison sites are a great place to start, but you can also search online for specialist young people’s car insurance providers.
Pay Upfront
Monthly installments might sound more affordable, but insurers will charge interest on those payments. This means they’re more expensive than an annual one-off payment.
Choose a Higher Deductible
Pay a higher voluntary excess on top of your compulsory excess.
This can keep costs down for any driver. But it means you will end up paying more yourself if you need to make a claim.
Watch Out for Unnecessary ‘Add-Ons’
For instance, while breakdown cover is included in some policies and can be useful, it’s often cheaper to buy it separately.
Drive Safely
Not getting into accidents means you’ll start to build up a no-claims discount, driving down premiums.
It also prevents you from getting points on your license, which can make insurance more expensive.
Advanced Driving Course
Taking an advanced driving course could push premiums down. But check with your insurer to make sure you will definitely get a better deal.
Staying Safe on the Road: Tips for Young Drivers
Of course, avoiding accidents and traffic violations altogether is the best way to keep your insurance rates low. Here are some tips to help you stay safe on the road as a young driver:
- Practice, practice, practice: The more experience you have behind the wheel, the more confident and skilled you’ll be as a driver. Take every opportunity to practice your driving skills, whether in driver’s education courses, with a parent or guardian, or on your own.
- Avoid distractions: Distracted driving is a major cause of accidents among young drivers. Avoid texting or using your phone while driving, and limit other distractions such as eating or adjusting the radio.
- Obey traffic laws: Traffic laws are in place for a reason. Make sure you’re familiar with the laws in your state and obey them at all times.
- Wear your seat belt: Seat belts save lives. Always wear your seat belt, and make sure all passengers in your vehicle do the same.
- Avoid risky behavior: Speeding, driving under the influence, and other risky behaviors can lead to accidents and traffic violations. Avoid these behaviors at all costs.
- Stay alert and aware: Always stay alert and aware of your surroundings on the road. Keep an eye out for other drivers, pedestrians, and potential hazards.
