What Do Car Insurance Rates Look Like for New Drivers?
Last Updated on January 12, 2023
Getting car insurance as a new driver can be stressful. Car insurance for new drivers can be expensive. Insurance companies have no way to judge your previous driving history. They don’t know if you will spend your whole life without any major claim. They don’t know if you’ll be the worst driver in the history of automobiles.
That’s why most insurance companies err on the side of caution by charging higher rates to new drivers. Insurance companies need to make money – and they can’t make money by giving inexperienced drivers cheap policies.
Generally speaking, there are two types of new drivers. There are inexperienced drivers – like teenagers who just got their first license or adults learning to drive for the first time.
Some drivers have limited driving history and are considered “new drivers.” You might have received your license at 16 – but you have no history of insuring a vehicle. You might have only driven a friend’s or parent’s car, for example. In your insurance company’s eyes, you’re a “new driver” because you have no verified driving history.
Regardless of which category you fall into, you’ll pay a slight premium for car insurance.
Typically, car insurance rates for new drivers are 40% to 50% more expensive than those for experienced drivers.
Obviously, if you commit any major offenses, or even get something as simple as a speeding ticket, you will pay even more.
How Much Do Insurance Rates for New Drivers Cost?
The following table shows the average yearly car insurance rates of major insurance companies for drivers without any insurance history.
| Insurer | Annual Premiums ($) |
|---|---|
| Allstate | 5,270 |
| Farmers | 4,980 |
| GEICO | 2,940 |
| Liberty Mutual | 4,520 |
| Nationwide | 2,580 |
| Progressive | 6,460 |
| State Farm | 4,470 |
| USAA | 2,570 |
As you can see, insurance rates are quite pricy for new drivers. Fortunately, there’s some good news: there are ways to get cheap car insurance even as a new driver. New drivers will almost always pay more – but you don’t have to pay exorbitantly more than experienced drivers.
How to Get Cheap Car Insurance as a New Driver
Here are some tips that will help you save a lot of money on car insurance as a new driver:
Compare Quotes from Multiple Insurance Companies
Some insurance companies don’t like to insure new drivers. That’s why these insurance companies charge significantly higher rates to new drivers. They want to focus on proven, experienced drivers. Other companies might specialize in offering competitively-priced plans to new drivers (by charging relatively higher rates for older, more experienced drivers).
As you might expect, rates always vary widely between providers. This rule is especially true for new drivers. Make sure you compare quotes from multiple insurance companies before locking into a plan. You might save hundreds of dollars by switching to a provider offering cheap insurance to young or new drivers.
Customize your Insurance Policy
Many new drivers are teenagers, and many teenagers can’t afford a nice car and its insurance. That’s why many new drivers drop comprehensive coverage from their insurance policies – it’s not always necessary on older vehicles.
Customize your insurance policy based on your unique needs. If you have an older vehicle, then you might be able to safely drop collision coverage from your plan, for example, to save an enormous amount of money. By just maintaining basic liability coverage, you can legally remain on the road while saving a ton of money on car insurance.
Raise your Deductible
Confident about your driving skills? Raise your deductible. The higher your deductible is, the lower your insurance premiums will be. You’ll pay significantly more if you ever need to make a claim – but you might save money in the long run.
Sign Up for Driver Education Programs or Defensive Driving Courses
Insurance companies like to reward safe driving habits. One of the best ways to prove to your insurance company that you’re a safe driver is to take a driver’s education program or a defensive driving course. Typically, insurance companies will knock 5 or 10% off the cost of your policy in exchange for taking the course. As a new driver, that can lead to significant cost savings.
Ultimately, car insurance rates for new drivers can be expensive. Fortunately, by following the tips listed above, you can save money on new driver’s car insurance.
