Insurance can be a hassle for those who are new to the road.

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New drivers can’t seem to catch a break. Along with learning the rules of the road and potentially buying their first car, new drivers also need to pay higher car insurance premiums just as they’re getting the training wheels off.

Unfortunately, first-time drivers don’t have a driving history, so insurance companies don’t know how risky their driving will be. To make matters worse, most new drivers are also young. Young drivers are statistically more likely to get into a car accident, which means it’s more likely their insurance companies will need to cover a claim. As a result, insurance companies raise premiums to protect against these risks.

But not all hope is lost. Some insurance companies have programs to ease the burden for new drivers. To help make things easier for you, we’ve researched the best car insurance companies and compiled a guide to getting car insurance for new drivers. Here, you’ll learn how to take out a policy and how to find cheap car insurance for new drivers.

So, without further ado, let’s jump right in.

In this article:

What Kind Of Insurance Do New Drivers Need?

New drivers do not need a special type of auto insurance – they just need to make sure they meet their state’s minimum requirements. These requirements differ from state to state, so it’s important to check your state’s laws. You can call up insurance companies that you’re considering taking a policy out with and ask what the minimum coverage requirements are for your state.

Most states require you to take out liability insurance at a minimum. This covers the costs associated with bodily injuries to other drivers and passengers, as well as property damages.

In addition to liability insurance, some states require drivers to have uninsured/underinsured motorist insurance, which covers you if you get into an accident with another driver that doesn’t have sufficient insurance coverage.

In total, there are six common types of car insurance coverages. These include:

  • Liability coverage: Covers damages and injuries to other drivers and vehicles when you are at fault, as well as your legal fees
  • Comprehensive coverage: Covers damages that aren’t due to collisions, such as storms, vandalism, etc. and may be required by your lender if you are leasing or financing your vehicle
  • Collision coverage: Covers you for damage related to collisions with vehicles or other objects, regardless of who is at fault
  • Personal injury protection: Covers you for medical payments and sometimes lost wages due to a car accident
  • Uninsured/underinsured motorist coverage: Covers you if you get into an accident with an uninsured or underinsured driver
  • Medical payments coverage: Covers the medical costs for anyone injured in your vehicle

Determining the required car insurance for new drivers depends on your state. For example, California only requires bodily injury and property damage liability for all drivers, but New York requires personal injury protection and uninsured motorist bodily injury in addition to liability coverages.

However, in most cases, it’s not advisable to simply take out the minimum coverage. All six types of coverage can save you from serious financial disaster if the unexpected occurs, so we recommend finding a policy that provides each of these coverages if it’s financially feasible for you. If it’s not, it’s worth considering whether you’re in a good enough financial position to be purchasing, financing, or leasing a car at this time.

In addition to these standard coverages, some insurance companies offer premium coverage options that are not required in any states, but provide peace of mind to many motorists. These include options like:

  • New car replacement coverage: If you total your car within a certain period of time (usually two to three years), your insurance provider will cover the cost of a brand new vehicle of the same make, model, and trim.
  • Loan/lease gap insurance: This covers you if you total your car before your lease or loan is paid off in full. This may be required by your lender.
  • Rental coverage: This type of coverage reimburses the cost of a rental car for a specified period of time if your car is undriveable.

Best Car Insurance For New Drivers

Here is a comparison of some of the top insurance companies for new drivers:

 
    AM Best Financial Strength Rating Relevant Discounts Accident Forgiveness
Erie Insurance Compare Policies A+ - 20 percent off for drivers under 21 living at home Yes
Geico Compare Policies A++ - Lower rate for young drivers that stay on parents’ plan through the Family Pricing Program Yes
State Farm Compare Policies A++ - 25 percent off for students under 25 with good grades

- Up to 15 percent off for drivers under 25 with no accidents in the last 3 years

No
American Family Insurance Compare Policies A - 10 percent off with the Teen Safe Driver program after driving for 3,000 hours or using the app for 1 year No
Liberty Mutual Compare Policies A - Up to 30 percent off with discounts like the multi-policy discount, good student discount, and RightTrack good driving discount Yes

 

How Your Vehicle Affects Your Insurance Premium

The make and model of your vehicle can raise or lower your risk of getting in an accident, the cost of repairs, and consequently the risk your insurance provider takes when covering you. To put it simply: It’s less expensive and risky for providers to insure an unassuming Hyundai Santa Fe with numerous safety features than it is to insure a $300,000 Lamborghini.

The following factors affect your insurance premium and are an important consideration in the search for the best insurance for new drivers.

  • Vehicle year: The year of your car will play into an insurer’s risk profiling procedure. Some insurance companies offer new car discounts.
  • Vehicle brand: Like we mentioned, the make of your vehicle affects both the risk profile and the expected cost to the insurance company in case of a claim. For example: Subarus have a reputation for being very safe and are made with parts that are easy to find. Lamborghinis, however, are hot rods that are known for fast speeds and expensive, hard-to-find parts – not safety. For this reason, insurers will typically up the premium.
  • Vehicle model: Similarly to brand, the model will affect the anticipated cost to insure your vehicle. Higher-end models are more expensive to insure, and your premium will reflect that.
  • Safety features: The more safety features your vehicle has, the lower your vehicle’s risk profile is. Usually, this will lower your premium as well, but this isn’t always the case: Teslas are currently rated one of the safest cars in America, but that hasn’t significantly lowered the cost of insuring them.
  • Theft prevention systems: Active and passive theft prevention systems affect your premium to different degrees. Active systems require the driver to perform an action to arm them, while passive systems are automatically armed whenever the vehicle isn’t being driven. Passive systems are generally preferred by insurance companies.

Why Is Car Insurance For New Drivers So Expensive?

While higher rates for new drivers are definitely frustrating, they are admittedly understandable. New drivers have two factors going against them: inexperience and lack of track record.

They say it takes 10,000 hours to become a master at something. Unfortunately, new drivers are far short of that mark, and that means it’s more likely they’ll slip up and forget to check their blindspots, misunderstand the right of way, or make another mistake that will cause an accident.

Furthermore, new drivers don’t have a track record to back them up – it’s like walking into a job interview with no previous experience. The insurance company has no idea if the driver will be speeding down the highway racking up tickets every other day, or if they’ll be a driver that diligently obeys the speed limit.

In many cases, there’s also a third factor that increases new driver insurance premiums: age. Most new drivers are young, and teenagers have a crash rate that’s almost four times that of drivers twenty and older. If you’re young and inexperienced with no track record to back you up, there’s a lot of risk for auto insurance companies.

Getting Cheap Car Insurance For New Drivers

Unfortunately, cheap insurance for new drivers may be a bit of a misnomer. That said, it’s possible to get cheaper car insurance as a new driver in a few different ways.

Stay On Your Parents’ Plan

Most insurance companies offer discounts for plans that insure multiple people, so if at all possible, stay on your parents’ plan to lower your rate. In the vast majority of cases, staying on your parents’ insurance plan is the recommended option, and unlike health insurance, there is no age limit after which you can no longer stay on the plan.

Build A Clean Driving Record

New driver or not, maintaining a clean driving record free from accidents and traffic violations is by far one of the best ways to keep your premiums low. If you cause a single accident, you can expect to see your car insurance premium skyrocket. So, make sure you stay attentive at the wheel anytime you’re on the road.

Look for Discounts

Consider taking a defensive driving class, which will lower your premium right away with some insurance companies. Many providers offer other programs to lower costs for new drivers too.

At What Age Do Car Insurance Premiums Decrease?

While many of us wish we could stay young forever, growing old is universally looked forward to when it comes to car insurance. After the age of 20, car insurance rates slowly begin to decrease.

However, the most drastic decrease is after age 25, just like for rental cars. If you can maintain a clean driving record from the time you start driving until you’re 25, you’ll be well-positioned for a low and affordable premium when you hit that milestone. 

Erie Insurance Review

Erie Insurance provides some of the best choices for car insurance for new drivers. The provider has an A+ rating with the Better Business Bureau (BBB), an 8 out of 10 rating for customer claim satisfaction with the National Association of Insurance Commissioners, and a first place award in J.D. Power’s 2018 U.S. Auto Claims Satisfaction Study.

In addition to standard auto coverages, Erie Insurance provides the following options:

  • Pet coverage: Covers vet expenses if your pet is injured in a car accident
  • Personal item coverage: Covers up to $350 of damages to personal items in a vehicle
  • Locksmith services: Covers locksmith services up to $75 if you lock your keys in your car by mistake
  • Auto glass repair: Comprehensive coverage waives the deductible for auto glass repairs and upgraded Full Window Glass coverage waives the deductible for replacements as well
  • Roadside and rentals bundle: Covers costs of roadside assistance and rental reimbursement

You can get a quote from Erie Insurance either online or by phone. The online quote process is quick and should only take about five minutes to enter all your information and receive your estimated premium.

Unlike some auto insurance providers, Erie does not allow customers to file a claim on the website. Instead, customers must contact their agent by phone or email. However, once you’ve filed a claim, you can check the status in your online account.

Our Verdict

With its 20 percent off discount for drivers under 21 who are living at home, Erie Insurance is one of our top choices for new drivers. Helpful discounts combined with a long-standing reputation and reasonable premium prices make Erie a solid choice for both new and experienced drivers.

Good for New Drivers

★★★★★

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A good pick for new drivers: this company offers helpful discounts for motorists under 21.

 

State Farm Review

As America’s largest auto insurance provider, State Farm has earned its reputation as one of the most trusted companies around and provides great car insurance for new drivers. With a financial strength rating of A++ from AM Best and an A+ rating with the BBB, new drivers should feel safe taking out a policy with State Farm.

In addition to the standard coverage types, State Farm offers:

  • Car rental and travel expenses coverage: You’re covered for the cost of a rental car if your car is undriveable. With travel coverage, the cost of meals, transportation, and lodging are also taken care of up to a certain amount if your car breaks down more than 50 miles from your home.
  • Rideshare insurance: This covers drivers for companies like Lyft and Uber.
  • Emergency road service coverage: This type of coverage takes care of the cost of on-site repairs, towing, locksmith services, and delivery of oil, gas, or a battery.

You can receive a quote from State Farm by going to the website or calling them directly. Claims can be filed online, with the mobile app, by calling the claims hotline, or by getting in contact with your agent. After filing a claim, you can view its status and manage it online.

Our Verdict

We’ve rated State Farm the No. 1 choice for students and No. 3 choice for teens. It is a highly reputable company with strong financials and affordable policies, which makes it a great option that deserves to be near the top of everyone’s list. State Farm’s 25-percent good grades discount and 15-percent safe driving discount make it a fantastic choice for young drivers.

Most Popular Car Insurer in the U.S.

★★★★★

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Our 4th pick: Most popular auto insurance company that services over 83 million policies.

 

Frequently Asked Questions

Q: What is the best insurance for a new driver?

A: There is no one size-fits-all best car insurance for new drivers. Car insurance rates are based on a number of factors such as vehicle year, make, model, safety features, and driving record. A single accident as a new driver can drastically raise your premium.

Q: If you are a young, new driver, we recommend State Farm for its good-grades discount for students and its Steer Clear program that can earn you a 15-percent discount for safe driving.

A: How much does it cost to insure a new driver?

Q: The cost of insuring a new driver will depend on the driver you’re insuring. The average annual auto premium is around $1,470 across the U.S., but this can be much higher for inexperienced drivers or drivers under the age of 25.

A: Your insurance company will take the make, model, year, and safety features of your vehicle into account, as well as the driver’s history and age, when pricing insurance for you.

Q: Is it cheaper to put a new driver on my insurance?

A: In almost all cases, putting another driver onto your existing insurance plan is a good financial decision. Many insurers, like Geico, provide discounts for multiple vehicles, so you may be able to save money.

Q: How can I lower my car insurance for a first-time driver?

A: The best way to lower your car insurance premium is simply to grow old – past the age of 25, ideally. However, maintaining a clean driving record free of traffic violations and accidents will lower your premium in the long run. If you’re young, consider staying on your parents’ insurance policy to keep costs low, and look for safe driving and good student discounts.