Insuring a New Driver

Insuring a new driver can be a complicated process. Teen drivers all require auto insurance before hitting the road once they get a driver's license. While teens have a learning permit, they're covered by their parents insurance policy. The first step for those who are new to driving is to look into your state's minimum insurance laws to find out exactly what coverage levels you must maintain in order to legally drive on the road.

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Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years

UPDATED: Nov 12, 2020

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Last Updated: October 29, 2018

In the United States, 4 million new teenage drivers hit the road each year. They all require auto insurance. So, exactly how much insurance do these new drivers need? And how can you get the lowest rate possible for them? Continue reading to learn what insurance is required for new drivers, how much new driver insurance costs, and how to save money on premiums for new drivers.

The thought of having your son or daughter behind the wheel of a car can be scary. This fear is totally natural, and to be honest, you should be a little scared. New drivers, regardless of how long they’ve been practicing, just don’t have the real world experience to drive a vehicle safely. Heck, most experienced drivers don’t drive as safely as they should. This is why it is so important to make sure you buy insurance for your new driver as soon as they get a license. Not only are you protecting yourself from costs of repairing the damage to your car, others’ cars, and medical bills, but you are also ensuring the safety of your child, should they get injured, or worse.

Minimum Insurance Requirements For New Drivers

Before receiving a driver’s license, while holding just a learning permit, it is not required by state law to carry auto insurance. Learner’s permit holders are usually covered by their parents’ insurance policy. However, as soon as these new drivers “graduate” from permit-holder to license-holder, they will need to get their own insurance coverage.

The first step for those who are new to driving is to look into your state’s minimum insurance laws to find out exactly what coverage levels you must maintain in order to legally drive on the road. Although the difference in laws and requirements between states may be minimal, each state does have their own department of insurance that operates differently. It is important to familiarize yourself with the laws in your local jurisdiction so that you never drive uninsured or underinsured.

Generally, to legally drive in the United States, you will need to have some form of Bodily Injury Liability (BIL) and Property Damage Liability (PDL) coverage. These two types of coverage are required in nearly every state. Other states may mandate that drivers must have insurance that protects against accidents involving uninsured drivers (UM/UIM). Some states require drivers to purchase insurance that provides coverage for personal injuries (PIP).

Please speak with a local auto insurance agent or visit your state’s DMV website to learn more about your state’s minimum requirements.

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Insurance For Inexperienced Drivers Is Expensive

The unfortunate reality for new drivers is that car insurance rates for them are expensive. As a new driver, you are certainly going to pay more car insurance than somebody who has a more established driving record. The reason for this is simple – to insurance companies, you are a complete unknown. They don’t know how much of a risk you present and therefore don’t know how much you may cost in future claims. Be prepared that you will most likely pay hundreds, if not thousands, of dollars per year more for your auto insurance than someone who is older and has a more extensive driving history.

Average Cost Of Insurance For New Drivers

Like stated above, auto insurance premiums for new drivers can be quite expensive.

According to Value Penguin, here are the average annual rates young drivers can expect to pay:

Here are the average rates older adults, with more experience on the road, can expect to pay:

  • 30-year-old – $1,922
  • 40-year-old – $1,863
  • 45-year-old – $1,816
  • 55-year-old – $1,690
  • 65-year-old – $1,737

How To Cut Costs

As you can see, rates for new drivers can be shockingly high. Individuals who are on a budget may want to consider purchasing a low-cost vehicle for the first few years that they have car insurance. Until the major discounts start kicking in a few years into your relationship with your new auto insurance company, insurance costs will remain relatively high. One of the ways to keep these costs low is to purchase an inexpensive car to drive while you build up your driving history. Insuring an expensive luxury or sports car is, of course, going to be more costly than insuring a cheaper vehicle simply because it costs less to repair the cheaper car in the event of an accident. Go with a cheap car for the first few years, and you’ll save a huge amount on your auto insurance.

Even if you are a relatively new driver, you may still qualify for discounts on your car insurance thanks to the many different discount programs that insurance companies use to attract new business. When you’re researching your auto insurance options, look around for discounts that may apply to your situation, such as a good grade discount for those in high school, or a college student discount for those in college. Even if you only qualify for one or two discount programs, you may end up saving over $100 a year on your car insurance.

Five Tips For Insuring A New Driver

As stated above, due to the high risk of accidents with new drivers, auto insurance companies charge significantly higher rates to insure these individuals in comparison to older, more experienced drivers. With that being said, there is a lot you can do to cut costs, while still maintaining the legal level of coverage. Below are the most effective ways to do so:

1) Insure New Drivers Under Their Parents’ Policy

This is a fast and easy way to lower the cost of insurance for a new driver. Auto insurance companies offer discounts for insuring multiple people and vehicles under the same plan. To get started, ask your insurance agent for guidance on adding additional family members to an existing policy.

2) Get Good Grades

As mentioned above, getting good grades (B- average or higher) will typically qualify a student to receive the “good student discount”. If you are a parent, consider making your child pay the difference between the discounted rate and the normal rate until they get their grades. This is a great way to teach them financial responsibility. It also encourages them to study harder.

3) Get Multiple Quotes

Car insurance rates are constantly changing. Many are surprised to discover that they could have been paying less for auto insurance all along. Our quote tool, at the top of this page, allows you to get multiple quotes from different companies. This ensures you get the best deal possible.

Spending time comparing quotes from different insurance companies in your locale will likely get you some additional savings. Every insurance company prices their auto policies differently, so the price that a first-time driver is quoted from one company will be different when the same driver gets a quote from another company.

Competition between insurance companies benefits everyone who needs insurance, so be sure to take advantage of this. Make sure you get auto insurance quotes from at least a few different insurance providers before eventually settling on one.

4) Encourage Safe Driving

Insurance premiums drop with age. Assuming the driver has a good driving history, the savings increase even further. This is why it’s important for new drivers to practice safe driving. Additionally, signing up for driver improvement, defensive driving, or new driver training courses can also help them score points with their insurance company.

It’s also worth mentioning that newer drivers need to keep a somewhat clean driving record until they have built up a relationship (and the associated premium discounts) with their auto insurance company. By avoiding accidents, speeding tickets and other driving infractions, you can protect your driving record and also take a lot of leverage away from insurance companies (who will be more than happy to raise your rates if you start becoming a higher risk).

While you should always drive safely, it’s even more important during your first few years on the road. Beat the statistics and stay safe, and you’ll also avoid higher auto insurance rates.

5) Choose a Safe Car

As mentioned briefly above, many parents make the mistake of putting their teenager behind the wheel of a fast, luxury vehicle. Such cars are extremely expensive to insure, especially with an inexperienced driver at the helm. When it comes time to buy a vehicle for your child, choose a safe car with all the available safety features, instead.

Alternatively, you can choose to skip out on buying your kid a car altogether. Instead of getting them their own vehicle, you can simply let them drive your own car from time to time. This will not only reduce their time behind the wheel, but it will also reduce your insurance premiums, as there will be one less car needed to be insured.

Where To Go Now?

Armed with the tips above, those who are shopping for auto insurance for the first time should be able to get a decent deal that won’t break the bank. There’s no way to avoid paying a bit more than average when you’re a new driver, so don’t get discouraged if you have to spend a few extra bucks on your car insurance. Focus on keeping your accident record clean, staying away from costly infractions like speeding, and over-time your insurance premiums will gradually be reduced. In the meantime, enjoy your newfound freedom and safe driving!

To start getting quotes for new driver insurance, fill out our free quote form above. You may also want to further educate yourself by checking out some other links we have prepared for you below.

Additional Links For New Driver Car Insurance

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