For a young driver, getting cheap car insurance, not easy. The premiums of the best car insurance companies are notoriously expensive, as anyone who has had to pay for it knows. On a national average, the cost of car insurance for a 20-year-old is $5340. This is significantly less expensive than the typical rates for a first-year college student (18 years old, $7188), but it is also significantly more expensive than a young adult in their mid-20s (25 years old, $3219).
This can never be classified as cheap car insurance. The high rates are because insurance companies believe that the younger drivers are riskier than their older counterparts. To everyone, that’s a lot of money, and it can make it difficult for young people to get on the road, with the high cost of insurance discouraging some people from learning to drive at all. However, there are many theories and misunderstandings about why young driver insurance is so costly.
One of the best ways to get affordable car insurance is by comparing car insurance quotes. You can get various cheap car insurance quotes depending on the kind of coverage that you are looking for. But always note that when you finally see cheap car insurance quotes do not think that they are the best car insurance rates for you.
But if you are a student you can consider yourself lucky. Most insurance providers have a decent student car insurance program for full-time students under the age of 25. Inquire with your insurer if you are eligible for a discount on your auto insurance bill if you maintain good grades in your higher education studies.
We’ll clarify why younger drivers usually pay more for car insurance in the sections below.
Why is it so expensive to insure a young driver?
The insurance industry, as previously said, is all about measuring risk. The amount your insurance company charges you for your policy is determined by various factors, the most important of which is how likely they believe you are to file a lawsuit.
It’s important to emphasize that this isn’t a personal attack and that insurers are mindful that not all young drivers are poor. Unfortunately, the decades of statistics used by insurers to determine rates suggest that drivers under the age of 25 are more likely to be involved in an accident than drivers of any other age category.
Experience is important
Even if you’re a model driver from the moment you pass your exam, young drivers have less experience and are therefore more likely to be involved in an accident. As a result, they’re more likely to file a claim on their policies, and insurance companies raise premiums to compensate.
The same is true for any first-time driver, who, regardless of age, would pay much higher insurance premiums than someone who has been driving for a while. On the other hand, young drivers face the highest costs because statistics suggest that they are riskier on the road in general.
Are young drivers more prone to accidents?
This is in no way a reflection of your driving skill. The same statistics impact every single one of us in some way. Still, there is a substantial body of evidence indicating that drivers aged 17 to 24 are more likely to be involved in a car accident and be killed or seriously injured.
As per various studies, one of every five young drivers will have a car accident during their first six months of driving. According to statistics, more than a quarter of all people killed on the roads in the last three years were between 16 and 24.
Younger drivers are also less able to assess hazards due to inexperience reliably, are more likely to indulge in high-risk behaviors such as speeding, and are more likely to be overconfident in their driving abilities than drivers 25 and up, according to research.
This list goes on and on. Even though the number of young drivers killed on the United States roads has declined in recent years, people aged 17 to 24 still account for a disproportionate number of those killed or seriously injured in car accidents.
This backs up the theory that young drivers are inherently riskier than older or more seasoned drivers. As a result, insurance companies will charge younger drivers more for coverage because they are more likely to pay out on a claim.
Are insurance firms simply avaricious?
It’s important to emphasize that this is not the case. Insurance companies charge young drivers more for their insurance because they’re more likely to have an accident and because the total cost of their claims is significantly greater than the average motorist’s.
According to various reports, the average cost of a claim for anyone aged 18-20 is $3684, which is almost $1500 higher than the average claim for anyone aged 61-65. This is because younger drivers are more likely to be involved in more severe collisions, resulting in higher repair costs and personal injury lawsuits.
As a result, if insurance companies have to pay out higher sums more often for younger drivers, it’s only natural that they’ll have to raise insurance rates to compensate.
How to save money on my car insurance?
There are many tried-and-true strategies for young drivers to save money on car insurance:
- Compare insurance quotes from various companies
- Continue to be covered by your parents’ insurance policy
- Reduce the coverage limits
- Make use of insurer discounts
Compare insurance quotes from various companies.
You can face a cost disparity of hundreds — or even thousands — of dollars between insurers despite requiring similar coverage. You might be charged an average of $2715 with State Farm versus $5895 with Farmers in California.
Getting a fast car insurance quote is now simpler than ever. If you’re under the age of 20, look for quotes online while keeping coverage standards the same across insurers. Broaden your quest to include other insurers, as you never know who can offer the best deal.
Continue to be covered by your parents’ insurance policy
Having you on your parents’ policy would almost definitely be the best way to get auto insurance coverage if they allow it. If your parents want to keep you on their policy: Given the need to cover an extra driver, their insurance would cost more, but the rise in their premium is likely to be less than the cost of your policy.
Overall, if your parents can name you on the policy, being protected by your family’s policy would almost definitely cost less than two separate policies.
Reduce the coverage limits.
We still recommend getting enough insurance to cover possible risks as well as damage to your vehicle. That is why we suggest a full coverage policy, which covers the cost of damage or injuries to others for which you are responsible, as well as the cost of damage to your car.
However, you could be buying too much coverage at some point, and you may save money on premiums by lowering your limits. It would help if you bought liability compensation limits equal to your net worth to ensure that your wealth is protected if you are found to be at fault for a serious and expensive accident. Aside from that, you could be paying more in premiums for protection that you do not need.
If your vehicle is already worth much, you can purchase comprehensive and crash coverage as part of a complete coverage program. If you pay hundreds of dollars more for comprehensive and crash coverage, but your vehicle is only worth a few thousand dollars, you can end up spending more to protect it than it is worth.
A young driver purchasing their first auto insurance should weigh the improved protection of higher limits and coverages against the increased cost of receiving such provisions.
Make use of insurer discounts.
If you can persuade the insurance provider that you are a lower risk, it will most likely charge you a lower rate. Many insurance providers have discounts on the following:
- Excellent students (in other words, your grades are above a specific cutoff)
- Drivers who participate in a safe driving course
- People with excellent credit
These traits, according to insurers, are associated with lower-risk driving. If you believe you qualify, be sure to discuss it with an insurance provider to see if you can save money on your quote.
