If you have a teenager that recently passed their driving test, two things are likely happening: they’re gearing up for their first car, and you’re reaching for the heartburn medication.
Aside from the usual stress of having your teen out on the road, there’s the added concern of insuring your new driver—a proposition that doesn’t come cheap. It’s no secret that teens pay higher car insurance premiums than older drivers because they have less experience behind the wheel. They’re also less accustomed to tuning out distractions—like a pinging cell phone or noisy friends. Insurance companies justify these higher charges because teens are more likely than any other age group to cause accidents. In fact, according to the CDC, car crashes are the leading cause of death for U.S. teens—with simple inexperience being the primary culprit.
WHO IS CONSIDERED A “NEW DRIVER?”
While most new drivers are teens getting behind the wheel for the first time, anyone without a recent driving record or insurance policy represents a similar risk from an auto insurers’ standpoint. As a result, they generally categorize the following types of people as new drivers:
- Teen drivers who just received their license.
- Older adults who have never driven.
- Immigrants and foreign nationals.
- Drivers of any age with a gap in driving or insurance coverage.
FACTORS THAT INFLUENCE THE PRICE OF INSURANCE
New drivers pay higher rates since they’re seen as a more significant risk to insure. But multiple factors contribute to pricing.
Age: Since drivers under the age of 29 are statistically responsible for more accidents, insurance companies tend to charge them more.
Vehicle make and model: Drivers who own an older or more modest vehicle will generally pay a lower rate.
Gender: Insurance companies generally charge male drivers higher rates than female drivers, even with a clean driving record. Statistically, males (especially male drivers under 29) are responsible for most accidents.
Location: If you live in an area with high rates of theft or vandalism, you’ll generally pay more for insurance.
Mileage: The more you’re on the road, the greater the chance you’ll get into an accident. On the other hand, drivers who spend less time on the road usually pay lower insurance rates.
Type of coverage: Only buying your state’s minimum requirement for liability insurance will cost less than purchasing collision and comprehensive coverage. That said, if you are financing or leasing the vehicle, most lending companies require additional coverage.
HOW TO SAVE MONEY ON CAR INSURANCE FOR NEW DRIVERS
Keep your teen on your policy: The best way to lower the premium for teen drivers is to stay on their parents’ policy for as long as they have the same permanent address. This helps them benefit from the established rates your driving history has secured.
Comparison shop: You can save money by shopping around and comparing quotes. Each insurance company has its rating factors that can make a policy more expensive.
Choose a less expensive vehicle: If you’re in the market for a new car, choosing a moderately priced one can help drive down your insurance costs. Otherwise, you may be paying more in premiums than you could ever get back from the insurer. Purchasing a slightly used vehicle with many safety features can also save you money. You can look up your car’s value on Kelley Blue Book.
Choose a higher deductible: Depending on where you live, you may only have to carry liability coverage, which doesn’t require a deductible. But if you’ve purchased comprehensive and collision coverage, you can save on premiums by opting for higher deductibles.
Bundle your coverage: If you have renter’s or homeowner’s insurance, get a car insurance quote from your insurance company. Many companies offer discounts if you bundle your policies.
HEALTH & BENEFITS PARTNERS IS HERE TO HELP
Although there are several steps you can take to help the process run more smoothly and cost-effectively, insuring a young driver will always come with some degree of stress. But Health & Benefits Partners is here to help guide you through the process.
We’re committed to making it fast, easy, and helpful—and our agents will help ensure you’re getting the most out of your coverage. As part of our recent partnership with Goosehead Insurance, we now offer Property & Casualty Insurance—making it easier than ever to take control of your insurance needs.
If you’d like to talk to Gerry Cleary, our highly qualified agent at Goosehead, reach out today.