As you become a licensed driver, understanding the nuances of car insurance is crucial for safeguarding both yourself and your vehicle. From deciphering the various types of coverage to identifying cost-saving opportunities, learning more about this process can help you prepare to find the coverage you need. In this article, we’ll outline a list of key steps for finding affordable policies as a new driver and discuss why you might pay higher premiums than more experienced drivers.
How to Find Affordable Car Insurance for New Drivers
As a new driver, it’s crucial to find an auto insurance policy that meets your needs and is within your budget. Here are some tips to help you find an affordable car insurance policy:
Understand the Types of Car Insurance Coverage
Comprehending the various types of car insurance coverage is essential when selecting a policy. Each type of coverage offers different levels of protection, and understanding their nuances is crucial for ensuring comprehensive coverage that aligns with individual needs and circumstances. Here’s an overview of the six basic types of car insurance:
Bodily Injury Liability: Bodily injury liability covers medical, rehabilitation, and funeral expenses sustained by all injured passengers, including those not in your car, if you are at fault in an accident.
Property Damage Liability: Property damage liability covers parts and labor for car repairs, property inside the other party’s vehicle, and any items you may have hit when you are at fault in an accident.
Personal Injury Protection: Personal injury protection covers most medical expenses, as well as lost wages and funeral expenses incurred by you and your passengers, regardless of who is at fault in the accident.
Uninsured/Underinsured Motorist Protection: Uninsured/underinsured motorist protection pays for the medical expenses, rehabilitation, and funeral costs incurred by you and any other passengers if you are hit by a driver with either no coverage or inadequate coverage.
Collision: Collision coverage pays for any damages to your vehicle if you are at fault in a car accident.
Comprehensive: Comprehensive car insurance covers damage to your car from an event that is out of your control, such as a natural disaster, theft, vandalism, or other unpredictable events.
Determine What Car Insurance Coverage You Need
When determining the car insurance coverage you need, it's crucial to assess your individual circumstances, driving habits, and budget to make sure you have enough protection without tacking on unnecessary expenses. At a minimum, you’ll need the basic level of coverage required by your state. However, the minimum coverage requirements may not provide you with the financial protection you need. This coverage quiz can help get you started on determining what type of policy and how much coverage is right for you.
Shop Around for Auto Insurance
Auto insurance rates vary widely for the same level of coverage from company to company, especially for new drivers, so it can pay off to shop around. While it’s easy to go with a less expensive policy, a policy might cost less because it offers fewer features or coverage. It’s even easier to shop around when you partner with an insurance brokerage like SelectQuote, since you’ll receive unbiased quotes from several of the nation’s most trusted carriers all in one place.
Consider How Often You Want to Pay
Insurers may offer discounts or lower administrative fees for policyholders who pay their premiums annually since it helps reduce the administrative costs associated with processing monthly payments. If you decide to pay monthly, you may be subject to interest charges on the installment payments. Instead, paying annually eliminates these interest expenses, contributing to potential savings. Paying annually also ensures there won’t be a lapse in your coverage for the entire year.
Build Your Credit Score
Having a strong credit score can demonstrate your ability to pay bills on time and repay borrowed money. Insurance companies may view individuals with higher credit scores as lower-risk policyholders, potentially leading to more favorable premium offers. A good credit score can also provide you with more flexibility in payment options. This means you may qualify for installment plans with lower down payments and better terms, making it easier to manage your insurance payments.
Look for Auto Insurance Discounts
There are various types of discounts, such as affiliation, student, and good driver discounts, offered by insurance carriers. Usage-based insurance apps like Progressive Snapshot also provide discounts for safe driving practices and are becoming more popular across top insurance companies.
Bundle Your Home and Auto Insurance Policies
Bundling is an easy way to save money on your insurance. Also known as a multi-policy discount, bundling can save you money by going through the same carrier for more than one type of insurance. By bundling your home and auto insurance, you can enjoy cost savings, streamlined management, enhanced coverage options, loyalty rewards, and a more efficient claims process.
Why is auto insurance more expensive for first-time drivers?
First-time drivers are among the most expensive to insure because of higher accident rates and little experience behind the wheel. The more time and experience you have driving, however, the more likely you’re able to find opportunities to lower your insurance rates.
Let SelectQuote Help You Find Affordable Car Insurance Options
As a new driver, it can feel overwhelming to shop for car insurance, especially if you’re unsure about the amount of coverage you need. Fortunately, with nearly 40 years of industry experience, SelectQuote is here to help. In just minutes, our licensed insurance agents can provide you with unbiased quotes from many of the nation’s highly trusted carriers. They’ll help you consider the requirements of your state and other key factors, like the vehicle you drive and your financial goals, so you can feel confident in your insurance carrier and policy.
