If you are a new driver who just got your first car and are looking for car insurance you will most likely find your premiums are higher than your friends and family. New drivers pay higher rates for coverage than more experienced drivers because insurers consider new drivers riskier to insure.
The challenge isn’t exclusive to newly-licensed teens and young adults — older drivers who just received a driver’s license may face similar high premiums. Keeping reading to learn how much more new drivers pay and tips on saving.
- New drivers pay more for car insurance because they are inexperienced, and statistics show they are more likely to be involved in an accident and file a claim.
- New drivers pay almost 200% more for state minimum coverage and roughly 80% more for full coverage than experienced drivers.
- In most cases, adding a teen to a parent’s policy is much cheaper than getting them their own policy.
What kind of insurance do you need for a new driver?
Each state has their own minimum coverage requirements for auto insurance. This means that you must carry a certain amount of coverage to legally drive, the required amount varies by state. Required coverages comprise bodily injury liability and property damage liability insurance. Liability only pays for damages you cause to others and their property. Variations among states vary between:
States have their own auto insurance requirements. If you’re looking for the most affordable rates, the minimum amount of insurance you can have is required in your state to drive legally. This coverage is comprised of bodily injury liability and property damage liability insurance. It only pays for medical bills and damages you cause to others and their property. Here is a range showing variations among states:
- Bodily injury: $10,000 to $50,000 per person and $30,000 to $100,000 per accident
- Property damage: $5,000 to $25,000 per accident
Some states also require uninsured and underinsured motorist coverage. Your agent or insurance company can answer your questions regarding state minimum requirements.
States only require minimal coverage to protect others in case of an accident — your vehicle isn’t insured against damage or loss if you’re at fault. In order to protect your vehicle you will need to carry full coverage insurance which adds collision and comprehensive coverage to your policy. If you have a loan or lease on your vehicle your lender will require that you carry full coverage.
Collision insurance will cover damage to your car if you’re responsible for an accident and comprehensive insurance pays for damage from theft, extreme weather such as hail or flooding, as well as animal strikes.
How much is insurance for new drivers?
If you recently got your driver’s license, expect to pay more for coverage than drivers who’ve been licensed for years. Younger drivers (anyone under 25) and older drivers over 50 will typically see the highest premiums.
When we ran the numbers, on average, new drivers pay a shocking 200% more for state minimum coverage and 80% more for a full coverage policy.
The table below shows the average premium differences between a new driver and one with more experience under their belt. In this example, the driver profile used is for a male driver, age 30, living in New York City, driving a 2017 Honda Accord, insured for state minimum and full coverage, including optional comprehensive and collision coverage with a $500 deductible.
| Coverage | Rate newly licensed | Experienced driver rate | $ difference |
|---|---|---|---|
| State minimum | $3,392 | $1,134 | $2,258 |
| Full coverage | $4,752 | $2,638 | $2,114 |
Cheap car insurance for new drivers younger than 21
Adding a teen to their parents policy is the usually the cheapest option to protect a young driver. Most insurers will not even write a separate policy for anyone under the age of 18 as by law they are not legally able to enter into a contract, an insurance policy is legally considered a contract.
While you can expect a massive premium jump when adding a teen (doubling of the premium is not uncommon) in most cases, adding them to your policy will be cheaper than getting a young driver their own insurance coverage.
To compare rates for teen drivers on their own to that of being added to a parent policy, visit our guides for insuring teen and young drivers here:
- How much is car insurance for a 16-year-old?
- How much is car insurance for a 17-year-old?
- How much is car insurance for an 18-year-old?
- How much is car insurance for a 19-year-old?
- How much is car insurance for 20-year-olds?
Other ways to save on new driver insurance
Car insurance companies consider several factors when pricing new driver insurance. Fortunately, there are a few things you can do to help keep your premium affordable. Here are a few tips on how to find cheap car insurance for first-time drivers.
Choose a higher deductible
A car insurance deductible is how much you’ll pay out of pocket before your insurer covers the rest of an accident or repair cost. A low deductible, such as $100 or $250, is easier on your budget if you’re in an accident, but you’ll pay far more each month for the convenience.
Aim for a higher deductible, such as $1,000 which will lower your monthly premium. It is important to always choose a deductible that you can easily afford in case you have to make a claim. It is a good idea to set money aside each month into an emergency savings account to cover your deductible.
Work on your credit score
In most states, your credit score will affect the cost of car insurance. Nationwide claims up to 92% of car insurers price your auto insurance premium according to your credit score. A CarInsurance.com analysis of the worst states for drivers with bad credit found that drivers with bad credit pay an average of 77% more for coverage than those with good credit, according to the most recent data.
If you have a history of making late payments or are just starting out and don’t have a credit history yet, consider improving your credit before shopping for car insurance.
Improving your credit takes time so while your efforts may not result in a huge premium drop immediately, once your credit score has improved ask your insurer to reprice your policy. Some ways to improve your credit score quickly include:
- Ordering a free credit report and making sure the information listed is correct. Dispute any wrong or inaccurate information on your report to have it removed.
- Paying down (or paying off) your credit card debt
- Asking a parent or loved one to add you to their credit card account as an authorized user
- Opening a new credit card and making your payments on time each month. If you have poor credit or none, a secured credit card with a low limit could help you build your credit. Regardless of which option you choose, be careful not to overspend.
Complete a driver safety course
Many insurers offer a discount to drivers who take and pass a defensive driving course, regardless of age or how long you have been driving so taking advantage of this is always a good idea. Older drivers can take advantage of the American Association of Retired Persons’ (AARP) online defensive driving course geared towards drivers 50 or older. The self-guided course costs $22.
Check with your insurer to see if they offer this discount and to get a list of approved courses. As an example, Geico refers clients to an online course through the National Safety Council or the American Safety Council for a discounted cost of $12.50. Completing one of these courses will typically result in a discount between 5% and 20% on your car insurance premium.
Bundle your insurance policies
Most insurers offer a bundling discount and the savings can be significant. A multi-policy discount helps lower your premium when you bundle your renter’s, homeowners’ or other policies with the same insurer. Savings can range between 5% and 25%:
- Erie’s multi-policy discount averages 16% to 25% when you insure your home and auto with the company.
- Geico will give you 25% off your auto insurance policies when you have more than one vehicle insured through them.
- Progressive claims you’ll save 12% on average if you bundle car and renters insurance.
Look for other insurance discounts
Other typical types of new car insurance discounts you could take advantage of include:
- Auto-pay
- Prepaid annual premium
- Low-mileage
- Good student
- Senior
- Accident-free driving history
- Anti-theft
- Safety equipment (anti-lock brakes, multiple airbags, drivers assistance and more)
Compare car insurance companies
Insurers rate risk differently which can result in wildly different prices on the same type of car insurance. Shopping your coverage is the best way to find the most affordable policy, be sure to visit several insurance company websites to get vehicle insurance quotes for comparison.
The best car insurance for new drivers will vary according to your individual needs and risk profile. Some insurers are more senior-friendly (The Hartford is good example) while others may specialize in insuring younger drivers. We analyzed our data and found the following insurers are best for newly-licensed individuals:
Companies for best car insurance for new drivers under 25
An Insure.com survey reported that millennials found the following three companies to have some of the cheapest prices for younger drivers:
- CSAA Insurance Group — now known as AAA NCNU for residents of Northern California, Nevada and Utah
- The Auto Club Group — also AAA for other regions nationwide, younger drivers can take advantage of affinity (group) pricing
- USAA — for members of the military and their families
Cheaper car insurance for first-time drivers older than 50
Seniors should get quotes on car insurance for new drivers from the following companies:
- The Hartford — partners with the AARP to provide members affordable auto insurance for seniors
- USAA — veterans and retired military may receive some of the lowest car insurance quotes around
- Hagerty — provides classic car insurance for seniors who drive older, collector cars
Cheaper car insurance for new drivers
If you can’t afford insurance for, your state may be able to help. For example, low-income California residents that earn less than $31,900 if single and $65,500 for a family of four can apply for coverage through California’s Low-Cost Automobile Program.
Final thoughts on car insurance for new drivers
While car insurance for a new driver will always cost more than coverage for more experienced drivers, there are ways to keep your premium affordable. Shopping your coverage on a regular basis, improving your credit score, keeping your driving record clean, and taking advantage of discounts are all great ways to lower your premium.
Keeping it safe out on the road is one of the most important things you can do as a new driver. Getting a ticket or being involved in an accident as a teen will push your rates up dramatically for at least three years.
Sky-high insurance rates are never fun but keep in mind that as you gain experience and avoid tickets or accidents your premium will start heading down and stabilize as you get older. In most cases, once a driver hits 25 years old, rates are roughly the same as more experienced drivers.
Resources & Methodology
Methodology
CarInsurance.com editors collected rates from Quadrant Information Services for a 40-year-old male driving a Honda Accord LX with a good insurance score and no violation on record for a full coverage insurance policy with limits 100/300/100 and $500 comprehensive and collision deductible. We analyzed 51,088,003 records, 34,588 ZIP codes and 167 insurance companies nationwide.
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Laura Longero
Executive Editor
Laura Longero is an insurance expert and Executive Editor at CarInsurance.com, where she specializes in helping consumers navigate the complexities of the financial and insurance industries. She has 15 years of experience educating people about finance and car insurance. Prior to joining CarInsurance.com, she worked as a reporter and editor at the USA Today Network. Her expertise provides readers with practical guidance, helping them make informed choices about their financial and insurance needs.
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John McCormick
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John is the editorial director for CarInsurance.com, Insurance.com and Insure.com. Before joining QuinStreet, John was a deputy editor at The Wall Street Journal and had been an editor and reporter at a number of other media outlets where he covered insurance, personal finance, and technology.
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Leslie Kasperowicz
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Leslie Kasperowicz is an insurance educator and content creation professional with nearly two decades of experience first directly in the insurance industry at Farmers Insurance and then as a writer, researcher, and educator for insurance shoppers writing for sites like ExpertInsuranceReviews.com and InsuranceHotline.com and managing content, now at CarInsurance.com.
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Nupur Gambhir
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Nupur Gambhir is a content editor and licensed life, health, and disability insurance expert. She has extensive experience bringing brands to life and has built award-nominated campaigns for travel and tech. Her insurance expertise has been featured in Bloomberg News, Forbes Advisor, CNET, Fortune, Slate, Real Simple, Lifehacker, The Financial Gym, and the end-of-life planning service.