Best Insurance For New and Young Drivers: Coverages & Policies

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Car insurance companies charge higher premiums for new drivers because it has been discovered that young and inexperienced drivers under the age of 25 are more likely to be involved in an accident. However, not all companies boost their rates in the same way. Businessyield examined thousands of quotations to determine the cheapest solutions for various sorts of new drivers on average. We also gave recommendations for the best insurance companies for new drivers who want to balance pricing and service quality.
Your auto insurance estimate will be customized to you if you follow these tips. As a result, it’s critical for new drivers to shop around and compare insurance quotes from at least three companies to obtain the cheapest deal.

Best Auto Insurance for New Drivers Under the Age of 25

Allstate has the cheapest minimum-coverage car insurance premiums for new drivers under the age of 25. Insurance for new drivers costs an average of $2,743 per year. However, Allstate’s policy costs 56% less per year, at $1,205.

State Farm has the best rates for new drivers searching for full-coverage insurance, with a policy costing $3,308 per year or $276 per month. The national average for full-coverage insurance is nearly double that of State Farm, at $6,527 per year.

CompanyMinimum coverageFull coverage
Allstate$1,205$4,493
State Farm$1,547$3,308
Geico$1,572$3,550
Nationwide$3,363$8,298
Farmers$4,495$9,555
USAA*$1,390$3,512
*USAA is only open to current and past military personnel, as well as their families.

Minimum-liability policies are usually the cheapest type of insurance since they provide the bare minimum of coverage that your state requires. Minimum-coverage auto insurance may appear to be the best option due to low premiums, but if you are involved in an accident, you may end yourself spending more out of pocket in the long run.

As a result, we advise buying a full coverage auto insurance policy rather than a minimum-coverage policy.

Best Car Insurance for New Drivers Over the Age of 25

Allstate offers the cheapest minimum-coverage auto insurance for first-time drivers over the age of 25. The annual fee is $395, which is 62% less than the average of the estimates we obtained.

CompanyMinimum coverageFull coverage
Allstate$395$1,568
State Farm$589$1,398
Geico$950$2,011
Nationwide$1,058$2,852
Farmers$1,708$3,959
USAA*$712$1,896
*USAA is only open to current and past military personnel, as well as their families.

State Farm has the most affordable prices for a full-coverage policy. New drivers pay $1,398 per year, making a State Farm policy $1,000 less expensive than the national average.

What is the Best Car Insurance for New Drivers on a Family Policy?

Sharing a policy with their parents or an older relative can result in much lower rates for young first-time drivers.

Allstate, Geico, and State Farm all have rates that are lower than the national average. Geico charges the least to add another car and driver to an existing policy, on average $1,419 per year.

Although State Farm charges a higher fee to add a second car and driver, its overall prices are lower than those of its competitors. A full-coverage policy with three vehicles and drivers from State Farm costs $2,201 per year on average – $813 less than the national average.

CompanyParents onlyWith 16-year-oldWith 18-year-oldWith 21-year-old
State Farm$1,038$3,139$2,644$1,982
Allstate$1,520$3,478$3,478$2,281
Geico$1,641$3,243$3,092$2,843
Nationwide$1,925$4,439$4,392$3,289
Farmers$2,392$5,020$4,761$5,527
USAA*$1,089$3,427$3,180$2,502
Rates were estimated using a first-time driver and two parents sharing full-coverage insurance with three vehicles covered.

Adding a car and driver to a current full-coverage policy costs three to five times less than acquiring a separate policy.

Who Qualifies as a New Driver?

  • Newly licensed adolescents
  • Older drivers who have never held a driver’s license
  • People who have a lapse in their driving or insurance coverage
  • Foreign nationals and immigrants

New drivers should expect to spend an average of $1,582 per year for minimal coverage and $3,867 per year for full coverage. Car insurance premiums, on the other hand, vary widely depending on your age, where you live, and other criteria such as your credit score.

What Effect does Driving Experience Have on Car Insurance Rates?

Auto insurance companies base their premiums on a variety of factors, including driving experience. People with little to no driving history are substantially more risky to insure, thus they will have to pay higher premiums during their first few years of driving. However, as you spend more time behind the wheel, your insurance prices will continue to drop.

Years licensedAverage annual premiumPercentage increase
0$1,10543%
1$88415%
2$85511%
3$8328%
4$8277%
5$7720%
The percentage rise represents the premium difference between a driver with five years of experience and when experience no longer affects rates on average.

A minimum-coverage policy in Texas will cost $1,105 per year for a 30-year-old man with no driving experience. His rates drop by $131 after a year of driving. His charges are $333 lower after five years of having his license.

Because insurance companies only assess driving experience within the United States, immigrants and foreign nationals face higher premiums, even if they have foreign driving expertise.

What Effect Does Age have on Car Insurance Rates?

Age is one of the most important elements influencing new-driver rates. Teens, who have a higher risk tolerance, cause more accidents than middle-aged drivers on average. Some people, though, start driving later in life. Even if you’re a new but not inexperienced driver, you’ll pay greater rates than other drivers your age. You will, however, witness a smaller growth than your younger counterparts.

AgeMinimum coverageFull coverage
16$3,097$7,229
17$3,021$7,079
18$3,107$7,450
21$1,747$4,351
25$1,198$2,984

In Texas, despite having the same level of driving experience,16-year-old drivers pays more than twice as much as a 25-year-old new driver for a full-coverage car insurance policy. Insurance rates for first-time drivers in their 30s, 40s, and 50s are much lower.

How to Find Cheap Car Insurance as a New Driver

Here are some techniques for finding cheap-cost car insurance as a new driver.

#1. Maintain the family policy

For drivers under the age of 25, it is less expensive to remain on your family policy rather than obtain an individual policy for auto insurance. You may need to switch insurance companies to get the best offer, but the savings can be substantial.

#2. Look around.

The Insurance Information Institute suggests receiving quotations from at least three different companies before deciding on one. Even if you’re just adding a teen to your policy, getting quotes from various companies is a good idea. Insurance companies understand that most individuals don’t think about their vehicle insurance very often, and your carrier may not be providing you with the best cost. Get quotes from your current insurer as well as at least two different companies.

#3. Take advantage of special offers.

Many insurance companies provide discounts, such as:

  • Good student discounts: These are offered from a variety of insurance companies, albeit they may differ in how they define a good student. Expect to show evidence of at least a B average.
  • Bundled discounts: When you combine your house and auto insurance with the same company, you may generally save 10-15%.
  • Defensive driving discounts: Before selecting a school, check with your insurance carrier, as some keep a preapproved list of defensive driving courses. You can normally obtain an 8-10% discount for completing these lessons, but even if you don’t, these classes can provide you with the skills you need to help prevent accidents. Even if you don’t get a discount, this makes them a good purchase.
  • Paid-in-full: You may be able to earn a 5-10% reduction if you pay your premium in whole rather than making no deposit monthly installments.
  • Low-mileage: If you don’t drive a lot, you might be eligible for a low-mileage discount. The amount of qualifying mileage varies by firm. Some companies consider driving fewer than 7,500 miles per year to be low-mileage, while others consider driving less than 15,000 miles to be eligible for a low-mileage discount.
  • Green/hybrid car discount: If you drive a hybrid or electric vehicle, you can receive a 10% discount.

#4. Use a less expensive vehicle.

Some vehicles cost more to insure than others. Luxury cars are expensive to acquire and repair, and they will necessitate full coverage car insurance, which will cost you extra to insure. High-performance sports cars can increase your insurance premiums by hundreds of dollars every year, regardless of your age or where you reside. A more practical vehicle, such as a Toyota Camry, can be covered with liability car insurance, which will result in lower insurance prices.

#5. Increase your credit score.

Insurance companies use your credit score to calculate rates since people with higher credit scores have fewer accidents and cost insurance companies less money, according to Edmunds. However, three states, Massachusetts, California, and Hawaii, restrict insurers from using credit scores to establish premiums. Consumers in all other states should pay their payments on time and avoid using credit cards to improve their credit ratings and cut their insurance prices.

#6. Select lesser coverage amounts.

Except for New Hampshire, every state mandates a specified amount of liability insurance. It should look like this: 25/50/20.

  • 25 ($25,000): The most your insurance company will pay for injuries per person in an at-fault collision.
  • 50 ($50,000): The maximum amount paid by the insurance for injuries per vehicle.
  • 20 ($20,000): Maximum property damage limit.

You’ll need the bare minimum of your state’s requirements, but you might desire more.

Liability insurance does not cover your car or medical expenditures. Furthermore, if you cause an accident and hit a car carrying four passengers, medical expenditures can soon exceed the state’s minimal liability insurance requirement. If you don’t have enough coverage, those four people can sue you, and you’ll have to pay their medical bills out of pocket, which can easily bankrupt many people. Yes, you can pay for the bare minimum of liability insurance, but there is a risk.

How much does insurance cost for a new driver?

On average, first-time drivers pay $1,582 per year for minimum-coverage insurance, while full-coverage policies cost $3,867 per year. Sharing a policy with parents or elder family members may allow young drivers to save money.

Is Insurance required for a new driver?

To drive legally, every state requires you to have auto insurance or proof of financial responsibility. Typically, you must acquire liability insurance, which covers accidents and property damage caused by you. You’ll also need to determine whether you want to tack on extra coverage, such as collision and comprehensive insurance.

What are the requirements for obtaining Car Insurance?

You will need to give your personal information (complete name, age, address, and license number) as well as vehicle information (make, model, VIN number, date of purchase, and mileage) and payment information to get auto insurance as a new driver (usually bank account or credit card).

How much does 16-year-old auto insurance cost?

A full coverage policy for a 16-year-old girl costs $813 per month, while a policy for a 16-year-old boy costs $876 per month. Insurance rates, on the other hand, range from $313 to $1,141 each month, which is why it’s critical to get estimates from multiple insurers in your area.

How much does auto insurance cost when you reach the age of 25?

On average, a 25-year-old driver should expect an 11% reduction in vehicle insurance premiums. However, rates drop further between the ages of 20 and 21 (17%) and 18 and 19 (16%).

Best Insurance For Drivers FAQs

What kind of insurance is best for new car?

Because a new automobile is a substantial investment, it’s a good idea to purchase comprehensive collision coverage, which compensates for damage to the vehicle itself. You may be compelled to add certain coverages in your policy if you lease or buy your car with a loan.

Is it more expensive to insure a new or old car?

A new car may cost more to insure than an older one due to its value, repair costs, the danger of theft, and other variables. If you finance your new vehicle, your lender will almost certainly ask you to carry more insurance than the required minimum, which usually results in a larger monthly payment.

How do G2 drivers get insurance?

When you obtain your full G license, you will be eligible for an insurance discount. Make sure to inform your insurance provider of the good news so that you may get the full benefits of your new G license. If you are the parent of a G2 driver, you must add your child to your police record.

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