Key takeaways

  • All new drivers, regardless of age or experience level, are legally required to obtain car insurance coverage.
  • Age, driving record, location, gender, marital status, vehicle type, credit history and coverage limits are all factors that can determine a new driver's car insurance rate.
  • Minimum coverage car insurance policies provide basic liability protection, while full coverage policies offer more comprehensive protection.
  • New drivers should conduct research, know what coverage they need, have their personal and vehicle information on hand, and compare options to find the best car insurance policy for their needs and budget.

A driver’s license represents a major milestone for anyone who has ever coveted independence However, newly licensed drivers cannot legally hit the open road without first obtaining auto insurance coverage. This legal requirement applies regardless of age or experience level.

By approaching car insurance as the legal responsibility it is, new drivers can avoid letting eagerness cloud better judgment. With patience and prudence, they can identify affordable coverage that properly transfers risk while granting the freedom of the road. The path to independence comes with obligations, not oppositions.

Who needs new driver car insurance?

All new drivers need a new car insurance policy. While the term “new driver” often leads to assumptions that only young adults and teenagers qualify, car insurance companies have different definitions. Here are the groups that could be considered as a new driver under their stipulations:

  • Newly licensed teen drivers
  • Adults who are newly licensed
  • Immigrants and foreign nationals
  • Any drivers of any age with a gap in insurance coverage or licensing

These new drivers will typically pay higher-than-average rates for their car insurance policies. For example, the average cost of car insurance is $2,542 per year for a full coverage policy, but an 18-year-old driver on their own policy pays an average of $7,499 per year for the same coverage. This is due, in part, to there being more risk involved with insuring younger or less-experienced drivers.

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8 factors that determine car insurance rates for new drivers

When considering car insurance, keep in mind that companies have varied factors for determining rates. Two important factors are your age and your driving record. But it does not stop there, although you’re likely to see higher premiums for younger drivers or those without a stellar driving history. The complete list includes:

  1. Age: Teenage drivers under 18 generally have the highest insurance rates. Premiums usually decrease around age 25 when drivers are seen as more responsible. The younger you are, the more you’ll typically pay. In Hawaii and Massachusetts, insurers are not allowed to consider your age when calculating your premium; however, in Massachusetts, years of driving experience are still allowed to be considered, so younger drivers typically still pay more.
  2. Driving record: A clean record with no at-fault accidents or moving violations saves you money. Even one incident can raise rates substantially. New drivers with very brief driving histories often pay more.
  3. Location: Insurance costs vary widely by state and ZIP code. Urban areas with more accidents, thefts and lawsuits have higher premiums. New drivers in low-risk rural settings typically pay less.
  4. Gender: Statistics show young male drivers tend to have more accidents. In most states, teenage boys pay more than teenage girls. California, Hawaii, Massachusetts, Michigan, North Carolina, Pennsylvania do not allow insurers to consider gender when calculating premiums.
  5. Marital status: Married drivers are viewed as more responsible and pay lower premiums. Single drivers have higher risk factors.
  6. Vehicle type: Sports cars, luxury vehicles and high-performance models cost more to insure. New drivers in standard vehicles save money.
  7. Credit history: In most states, a good credit-based insurance score means lower rates. New drivers may pay more with little or no credit established. California, Hawaii, Massachusetts and Michigan ban or restrict the use of credit as a rating factor.
  8. Coverage limits: Minimum required limits cost less but provide less protection. Higher limits cost more but reduce financial exposure in the case of at-fault accidents.

Types of car insurance for new drivers

When you are looking for car insurance for new drivers, it is important to look at all the available types of car insurance coverage. Insurance companies typically offer minimum coverage and full coverage auto policies, as well as additional endorsements that can be used to customize your policy.

Minimum coverage car insurance policies

While minimum car insurance coverage requirements vary by state, most minimum coverage policies only provide basic liability protection and may not fully cover expenses if an accident occurs. Though cheaper initially, skimping on coverage can lead to major out-of-pocket costs later. Common components of minimum coverage include:

  • Bodily injury (BI) liability: Bodily injury liability coverage will help pay for medical expenses related to the other driver’s injuries if you cause an accident. If the other driver sues you for losses, it may also cover your legal fees.
  • Property damage (PD) liability: This coverage pays toward property damage that you cause to others, like the other person’s vehicle repairs that occurred due to an at-fault accident.
  • Uninsured/underinsured motorist coverage (UM/UIM): This type of coverage offers financial protection if you get into an accident with a driver who is uninsured or does not have enough insurance to cover your losses. It also covers damage from hit-and-run accidents and if you are struck by a vehicle as a pedestrian or while riding a bicycle. Keep in mind that uninsured motorist coverage for injuries is separate from the same type of coverage for property damage.
  • Personal injury protection (PIP): Required in “no-fault” states where both parties’ insurance covers medical expenses regardless of fault. PIP pays for medical bills, lost wages and other accident-related costs for you and your passengers.
  • Medical payments coverage (MedPay): This coverage helps pay medical expenses following an accident for yourself or any passengers in your vehicle. It is considered optional coverage in most states, but there are a few states that require drivers to carry this type of coverage.

Though tempting for the lower premium, minimum coverage policies may have significant gaps. Going beyond state minimums can provide more comprehensive protection in the event of an accident, but it costs more upfront. New drivers must weigh these trade-offs carefully on how much insurance they really need.

Full coverage car insurance policies

Going beyond the basics may be wise for drivers wanting robust safeguards for their finances and assets, especially if they own a newer vehicle. Though full coverage can cost extra initially, it can prevent major out-of-pocket expenses if an accident occurs.

Full coverage policies typically include:

  • Collision: This coverage will help pay to repair or replace your vehicle if you collide with another vehicle or something else that damages your vehicle, such as a tree, fence or light pole. It also covers rollover accidents.
  • Comprehensive: This coverage pays for damage to your vehicle caused by a wide array of situations, like theft, storm damage, vandalism and animal damage.

Additional endorsement options

Beyond mandatory minimums and comprehensive full coverage policies, auto insurance providers offer a menu of optional endorsements to customize protection. Also called riders, these supplementary coverages allow drivers to tailor policies to their specific needs and budget. These may include:

  • Towing and labor coverage: Towing and labor coverage may pay for the cost of towing your car to a repair shop and may also cover a certain amount of necessary labor charges to repair the issue that caused the vehicle to break down.
  • Roadside assistance: This coverage provides roadside assistance coverage in case your vehicle breaks down or is stolen, or if you need to change a flat tire.
  • Accident forgiveness: Some insurers offer an accident forgiveness endorsement that will prevent your premiums from rising after an accident. Keep in mind that not all accidents are covered and certain conditions must be met to qualify.

How to get car insurance for new drivers

The options can be endless when it comes to car insurance coverage. The abundance of choices can make the process of getting a car insurance policy feel daunting. Knowing what steps you should take to obtain your first car insurance policy may help. These include:

  • Conduct thorough research. When choosing an auto insurance provider as a new driver, narrow the options by deciding your top priorities first, then consult reviews to compile a list of companies that offer those key factors to streamline decision-making and identify the best value based on your specific needs and budget. Conducting targeted research before getting quotes makes finding the ideal coverage more manageable.
  • Know what coverage you need. Minimum coverage car insurance is typically the cheapest, but having higher liability limits and more coverage, like comprehensive and collision, could better protect your finances. It can be helpful to know which type of coverage is right for you, and any optional coverage types you may want, before getting quotes. Full coverage, which includes comprehensive and collision coverage, is typically required by your lender if you lease or finance your car.
  • Have your personal and vehicle information on hand. Having your driver’s license number, vehicle make/model/VIN and personal info like your birthdate, address and Social Security number on hand streamlines the quote process. Insurers will need these specifics for all drivers listed on the policy to generate accurate premium estimates.
  • Get personalized car insurance quotes. Policies and prices for coverage may vary by company, so it’s often helpful to get quotes from multiple providers. Most large insurance companies offer quotes online, but you may also speak to an agent to get a personalized quote. This can help you find the best fit for your needs and budget.
  • Inquire about available discounts. Most insurance companies will offer various discount opportunities, such as bundling policies, good student, multi-car, airbags, usage-based and more. These discounts may help you save money on a new driver policy.
  • Compare options and purchase a policy. With multiple premium estimates in hand, carefully evaluate each policy’s rates, exclusions, endorsements and customer service reputation. Determine the ideal fit for your budget and protection needs, complete required paperwork, and pay to activate coverage so you can legally and safely hit the road.

Frequently asked questions

    • There is no one-size-fits-all answer for the best auto insurance for new drivers since optimal coverage depends on individual needs and budget. However, research shows certain providers like State Farm, Geico and Progressive consistently offer competitive rates along with abundant discounts that can yield significant savings for young motorists. USAA also ranks well if you qualify for membership, which is limited to active-duty military, veterans and qualified immediate family members. The best approach is to shop around and compare quotes from these highly rated insurers and others to find the ideal balance of affordable premiums and robust protection based on your personal priorities as a new driver.
    • Generally, insurance follows the car, not the driver. While car insurance requirements vary by state, new drivers who own their vehicle must typically carry at least a minimum amount of car insurance to drive legally. If a newly licensed driver has regular access to a vehicle — they live with their parents or have roommates with a car — they may be required to be included as an active driver on the car insurance policy, depending on the insurance company’s underwriting criteria. However, you do not need a car insurance policy to obtain a driver’s license. Many people get a license for state identification or to rent vehicles when they travel but do not need to carry car insurance for their day-to-day lives.
    • New drivers who live at home and have access to their parents’ vehicle usually must be included in their parents’ car insurance policy. This is because insurance providers want to underwrite for the risk of having a newly licensed driver in the household. However, this is true for any new driver, regardless of their age. Adults who get their driver’s license later in life will also typically be added to the insurance policy of the people they live with. In situations where the new driver doesn’t plan on driving any of the vehicles they have access to, they may be able to apply for a driver exclusion with the auto insurance company.
    • Age is one of a handful of factors that can affect your car insurance rate. In general, younger, more inexperienced drivers will typically pay more for car insurance than drivers with more time behind the wheel. However, using age as a rating factor is banned in Hawaii and Massachusetts, so your age can’t be factored into your rates in those two states. Other factors that may affect your rates include your credit score (in most states), your driving record and the type of car you drive.