Written by: Jen Wagner
Last updated: January 24, 2022
Passing your driving test is a major milestone, signifying independence and coming of age. But this achievement is also one that represents financial responsibility. In order to drive, you need gas in your tank and an active auto insurance plan. Unfortunately, car insurance for novice drivers is costly because the providers consider them at-risk. With teens’ lack of experience when first starting to drive, they are statistically more likely to get into an automobile accident. Therefore, companies set higher rates to protect themselves, but when, if ever, do those rates go down?
Understanding Car Insurance & Premium Rates
Auto insurance is not only vital when owning an automobile — it’s also one of the most significant expenses you’ll have when it comes to your car, truck or SUV. Its purpose is to pay for vehicle damage due to an automobile accident, fire, or theft. Depending on the policy, it may include coverage for an uninsured or under-insured driver, medical expenses, and liability. But, while not all 50 states require it, having car insurance is critical. Without it, you can be held financially responsible for any costs associated with a car accident.
Many factors can influence car insurance premium rates, including gender, marital status, credit score, the car you drive, and where you live. But when you’re just starting to drive, age is one of the most critical factors used to determine insurance rates.
According to the Insurance Information Institute, car insurance providers generally charge teens and younger adults under 25 more for insurance policies because they are, statistically speaking, a greater liability. However, with age comes experience, as rates typically start decreasing in your mid-to-late 20s and continue falling. Though, a clean driving record, good credit history, and experience behind the wheel will also factor into this.
Additionally, not every provider drops rates by the same percentage, and differences may vary significantly among states. Furthermore, rates tend to be higher for young males than their female counterparts. In fact, Statista reports that the average annual premium for an 18-year-old man is $7,762 compared to $7,030 for an 18-year-old female.
Though while this may be the case, there are still some ways you can reduce your car insurance cost.
Researching Top-Rated Insurance Providers for Teen Drivers
If you’re insuring a teen or younger driver or need to acquire at-risk automobile insurance, one of the best steps you can take is shopping around. Take time to explore policy and benefit options and each one’s value. Then request free quotes from the providers you’ve narrowed your decision down to.
During your research, you may find that a nonstandard auto insurance company is the most beneficial option for finding a comprehensive plan at an affordable rate. But overall, several insurance providers offer affordable policies for high-risk drivers, along with well-rated customer service and coverage, including:
- Liberty Mutual
- State Farm
- USAA (for US military veterans and eligible family members)
- Geico
- Progressive
- AAA
Lowing Your Car Insurance Rate
Even though car insurance for young adults is high, the rates decrease with age. For example, parents may see their insurance policy rate increase by 79 percent when adding a teen driver to their policy. But once the teen is 19, the rate can fall to about 58 percent. But until then, there are rate reduction opportunities you can inquire about to lower premiums, including good student discounts, low mileage discounts, and safe driving discounts. Taking a defensive driving class can also result in an additional price reduction.
Ask providers what they offer. If you’re the parent of a young driver, consider adding your child to your policy. This act alone can decrease their rate. Some companies even offer reductions just for going paperless. You might see a discount of up to 10% off for signing up for an e-bill option.
Adding Additional Breakdown Protection
While car insurance pays for damage caused by an auto collision, fire, or theft, it does not cover mechanical or electrical breakdowns. However, an extended car warranty or vehicle service contract (VSC) does. It can also give you the peace of mind you need with a young driver on the road and during an emergency.
Depending on the provider, a vehicle service contract can include complimentary 24.7 roadside assistance with towing, battery recharging, or onsite repairs for punctured tires. Ensure you aren’t left scrambling when you need a part repair or replacement by checking out our top extended car warranty companies. We offer in-depth reviews with actual research and company rankings, including pros and cons. Get started today!
