Insurance for first-time drivers

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Understanding insurance and what is required can help first-time drivers find affordable car insurance with some of the best insurance companies. Most insurers consider new drivers high-risk due to their lack of experience behind the wheel. By getting multiple quotes for coverage, new drivers may be able to get the cheapest rates for car insurance and the coverage they need.

Car insurance for new drivers

Even if you are a new driver with natural driving abilities, you are still likely to make some mistakes as you gain experience driving. The longer you practice driving, the less you are seen as a high-risk driver by insurance companies. When choosing the right level of car insurance coverage, anything above state minimum liability limits is considered optional by the state you live in.

However, most insurance experts recommend purchasing as much liability insurance as you can afford. This is because the liability insurance covers the other party’s injuries and property damage if you cause an accident. Depending on the state you live in, you could be held financially responsible for anything over the liability insurance limits included in your car insurance policy.

For example, look at Virginia’s minimum liability requirements. In Virginia, you are required to have a 25/50/20 policy, which means your policy must provide:

  • A maximum of $25,000 per person for bodily injuries sustained in an accident
  • A maximum of $50,000 per accident for bodily injuries (meaning the maximum your insurance company will pay per accident for physical injuries you caused regardless of how many people were involved)
  • A maximum of $20,000 for property damage per accident (which includes cars, signs, fences, homes, etc.)

Consider this example; with the base model of a 2020 Ford Explorer costing around $33,000, the property damage coverage alone could easily exceed your policy limits. To protect yourself against potential financial hardship, you might consider purchasing as much liability as you can comfortably afford.

Additional coverage options to consider

As a new driver, you are at higher risk of getting into an accident. Although liability insurance covers the other person if you cause an accident, medical insurance and physical damage coverage protects you and your vehicle, regardless of who is at fault. Consider these additional coverages when purchasing first-time drivers car insurance:

  • Comprehensive coverage: This covers your car from such things as vandalism, theft, fire, hail, and damage from animals.
  • Uninsured and underinsured coverage: This covers you if you are hit by an uninsured or underinsured motorist — meaning it will help cover your medical bills and possibly your car’s repair or replacement costs (depending on where you live).
  • Collision coverage: This covers you should you hit another car, sign post or property, such as a fence or gate.
  • Medical payments coverage: This covers the medical expenses of both the driver and passengers in the event of an accident.
  • Personal injury protection: This also covers medical expenses after an accident, but it may also help with things like loss of income and childcare. Personal injury protection is not available in all states.

These additional coverages can give new drivers more peace of mind on the road.

How to find cheaper car insurance for first-time drivers

Finding cheap auto insurance for new drivers may take time and patience. Shop around first to find the companies offering the best rates. From there, look for companies offering a range of discounts that are applicable to you to help reduce the cost of new driver car insurance. Most auto insurers have a page dedicated to discounts. If you cannot find it, speak with a customer service representative.

Discounts you might qualify for include:

  • Defensive driving course: Most insurance companies reward continued driver education courses.
  • Clean driving record: Keeping your driving record clean of speeding tickets and accidents is typically necessary to get this discount.
  • Security system: Location devices, alarms and other security features that protect your vehicle can help you save money.
  • Good student: Maintain a high enough grade point average, and your monthly insurance costs may go down with some insurers who reward good students and good drivers.
  • Family policy: Adding a new driver to the family policy can be cheaper than having a new driver on their own policy, as this distributes risk more evenly across multiple policyholders.
  • Multi-policy: Pair up your car insurance with homeowners, apartment or even boat insurance to receive a discount on each policy, with most insurers.
  • Multi-car: insuring more than one car with the same company will lower the premium with many companies.
  • Full pay: pay your premium in full each year to save money.

The amount of each discount varies with each company, but the savings are always worth pursuing. When stacked together, you might be able to save a significant amount.

Laura Adams, an insurance expert, says “Another way to make car insurance affordable for new drivers is to enroll in usage-based insurance (UBI). These programs use technology to evaluate your driving behaviors and patterns, such as how fast you turn and hit the brakes, your speed, mileage, and the times of day you’re on the road. When the data shows that you’re a safe driver, you qualify for discounts that could be as high as 50%, depending on your insurer.”

The best insurance for new drivers

Getting the cheapest car insurance for new drivers is all about finding the right company. Some of the best rates are offered by the largest car insurance companies. Bankrate compared coverage and discount options based on market share with some of the most popular and positively-reviewed insurance companies and found the following four companies to be particularly good options for first-time drivers to consider:

  • Geico: Geico offers lower rates than most other companies, in addition to a wide range of discounts to help make your premium more affordable. Geico offers full-time students a good student discount and membership discounts for certain fraternity, honor societies and sororities.
  • Nationwide: Nationwide is another top provider that offers competitive rates that new drivers may benefit from. New drivers who qualify can earn a good student discount, or can choose to include accident forgiveness, which can protect your rates if you cause an at-fault accident.
  • State Farm: On average, State Farm charges more than other top providers reviewed by Bankrate, but it is still one of the more affordable national providers available. State Farm has an intuitive app where new drivers can make changes to their policy, report an accident and make payments. Plus, they offer a wide range of discount options to help you lower your premium, like being a safe driver and completing an approved driver education course.
  • USAA: Available to active and former military (as well as their immediate family), USAA offers some of the best rates and customer service in the industry. USAA also offers accident forgiveness protection, and new drivers might consider roadside assistance to help if the car is broken down, or you need assistance while on the road.

Cheaper car insurance for first-time drivers may also be found with a local company, but national companies generally offer more discounts and incentives for joining. However, obtaining quotes from multiple insurers is the best way to find the right fit for your needs.

The cost of insurance for new drivers

Lack of experience often means new drivers pay higher car insurance rates, especially teen drivers. The average cost of car insurance for an 18-year-old driver is $2,197 per year for males and $1,753 for females. Rates can vary widely based on driver age, location, annual mileage, type and age of car and the coverages you choose. If you are a new driver who is 25 or older, you might see lower rates overall, even if you are an inexperienced driver.

Frequently asked questions

Why do first-time drivers pay more for insurance?

First time drivers are more likely to make mistakes, which is the biggest reason car insurance for new drivers is typically more expensive. Inexperience historically means a greater chance of an accident, and therefore a higher risk to insurers. Higher risk typically equates to higher premiums, so with time and good driving habits, new drivers will likely see these rates decrease.

When do new drivers see their rates go down?

Most new drivers see their rates go down once they reach their mid-twenties, or after a couple years of clean driving. Insurance expert Laura Adams says, “As you get older and gain years of experience behind the wheel, your car insurance rates should come down.”

Which is cheaper for new drivers to insure— a new car or an old car?

Insurance for new drivers can be expensive, some new drivers may take into consideration the insurance rates that might be affected by their vehicle make and model. Older cars are generally cheaper to insure because they usually cost less to replace. However, safety ratings may also affect new driver car insurance rates, so discuss your potential vehicle choices with your insurer to determine which might be the best option for affordability and safety.

Written by
Mandy Sleight
Insurance Contributor
Mandy Sleight has been a licensed insurance agent since 2005. She has three years of experience writing for insurance websites such as Bankrate.com, MoneyGeek and The Simple Dollar. Mandy writes about auto, homeowners, renters, life insurance, disability and supplemental insurance products.
Edited by
Insurance Editor