Car insurance for young drivers (ages 16-25) is likely to be expensive. It is such a daunting task to find the right one. You need to find the most affordable rate while still getting enough coverage to prevent financial hardships in case of an accident.
In general, auto insurance for young drivers can be divided into two groups – parents adding a teen driver to their existing policy and first-time drivers in their early 20s. With tips for both groups, you’ll be able to keep first-time driver insurance costs to a minimum.
Advice for parents of teen drivers
Check with the auto insurance company to find out if a teen needs to be insured once he has a learner’s permit. Some providers add them to your policy for an additional charge until they get their own license- or their own insurance policy.
Why do young drivers pay more?
A driver’s experience is one of the most significant factors that influence the insurance rate. It takes years of practice to master the skills required to drive carefully. With no previous history to show how safe or skilled they are, teens are considered high-risk candidates. The status of a ‘good driver’ can be earned over time. Depending upon the insurance carrier, the rates come down over time if the young driver has not received any tickets or gotten involved in an accident. By the age of 25, the rate is almost the same as other adults.
Common driving mistakes teens often make
New drivers often focus too much on the vehicle that is in front, also known as tunnel vision. They forget to scan for other possible dangers- a skill that is acquired over time.
This is more dangerous than impaired driving. Young drivers often get distracted, particularly because of their mobile phones or friends.
Though this fault isn’t reserved only for young drivers, statistics show that speed is often a factor of deadly accidents caused by teens. Many times it’s unintentional and attributes to tunnel vision. It’s difficult to simultaneously figure out where they’re going, what the posted speed limit is, and how fast their vehicle is moving.
What’s the best auto insurance for young drivers?
Let’s look at the various types that young drivers need to consider when searching for auto insurance.
All drivers should be protected with liability coverage. In fact, other types of insurance can’t be purchased until you have adequate liability insurance.
If your child is found to be at fault in an accident, liability insurance coverage pays a few costs. This includes the other driver’s property and bodily injuries. However, this won’t involve damage to your vehicle or personal injury costs. There are two aspects of liability coverage:
- Physical injuries: If the other driver is injured, auto liability insurance will pay for his medical bills. It also includes the cost of any lawsuits (up to your coverage limits) that may ensue because of the accident. This coverage is essential as medical bills can quickly spiral out of control.
- Property damage: If the other driver’s car or any of his personal property is damaged, the cost is covered through liability insurance. This includes garage doors, mailboxes, and landscaping.
Though you are allowed to set the liability limit, selecting a low value may feel as if you’re saving money in the short-term. If your teen gets involved in an accident, you’ll have to pay the balance if the damages exceed the liability limits. A serious accident could put your home and other assets on the line. The same scenario could apply to a driver with his own insurance in the early 20s. If the cost of an accident you cause exceeds your insurance payout, you’re at risk of having to provide out-of-pocket money to cover it.
The type of car determines whether you need to buy this coverage or not. Buying collision coverage pays for repairs that your vehicle needs if it’s damaged in an accident. But this is only beneficial if the car is worth repairing. Ideally, you should obtain a couple of online car valuations to determine the market value of the automobile your teenager is driving. If it’s worth only a couple of hundred pounds, it may be wiser to drop this coverage.
This coverage helps pay for replacing or repairing a vehicle that has been damaged by an incident other than a collision or if it’s been stolen. This includes theft, vandalism, animal encounters, fire, and weather damage. Again, consider the worth of the car before purchasing this type of insurance. If a vehicle isn’t worth repairing after an accident, then you don’t need this coverage either.
Factors that affect the cost of insurance
Young drivers’ car insurance usually costs more because they are more likely to take risks. Their lack of driving experience makes it harder for them to spot or judge potential hazards. This equates to expensive premiums. Here are other factors that also influence the cost:
The age, value, engine size, and price of repairs of the model are some elements that are considered when calculating the premium. Expect higher premiums for newer, more powerful vehicles.
Who you are
Not only your age but where you live and your occupation, if any, also plays a part.
The cover you choose
It involves the types of coverage that were discussed above: liability, collision, and comprehensive.
When you take car insurance, you’ll have to decide on an excess- the money you need to pay before the insurance company picks up the bill. If you’re willing to pay more excess, expect a cheaper premium. Remember, choose an amount that you can realistically afford.
How to keep premiums affordable
Whether you add a young driver to your current policy or obtain an independent one, be prepared for a hefty price tag. Get a few estimates from other insurance providers to compare coverage levels and rates. Here a couple of discounts to ease the financial burden.
Good student discount:
Companies sometimes offer discounts to students who get good grades. Guidelines can vary, but typically a 3.0 GPA or above is required to avail 10-15% discount.
Defensive driving course:
This course helps drivers learn how to handle dangerous driving situations safely. Those who take and pass this course can get about 10% off. Remember to verify the approved courses from the insurance provider.
A vehicle that has safety features such as ABS, anti-theft device, adaptive cruise control, etc. could get lower premiums. Ask which ones apply.
The latest option – telematics
An easy way to get cheaper premiums is to make sure the car is secured with anti-theft devices. But you can get a more personalized premium by opting for telematics insurance, also known as black box insurance. Telematics informs you how well you’re driving based on facts. It’s a method to prove that you’re a safe driver. If you continue to demonstrate the characteristics of a responsible driver, you should see your insurance premiums come down.
About Michelle Joe: Michelle Joe is a blogger by choice. She loves to discover the world around her. She likes to share her discoveries, experiences, and express herself through her blogs. You can find her on Twitter, LinkedIn, Facebook