The Costs of Car Insurance for New Drivers

Learning how to drive and getting out on the open road by yourself can be a rite of passage for many teens. The freedom of driving and taking yourself where you need to go is one of the first steps into adulthood. With this new freedom and responsibility, however, comes many new costs. From vehicle maintenance to gas, driving a car can be expensive. For new drivers, insurance will also be a significant expense. Teen drivers pay some of the highest insurance rates among all drivers. Due to their age and inexperience, car insurance companies typically charge double or triple the standard rate to provide coverage to young drivers.

Even though insurance for new drivers can be a significant expense, it is a requirement in most places. The majority of states have insurance laws that mandate all drivers to carry minimum liability insurance. This insurance protects other drivers and pays bodily injury and property damage claims if the policyholder is responsible for an accident. Since many new drivers don’t own a vehicle, liability coverage may be all that they need at first. When a teen gets their own car, they may need to have collision and comprehensive coverage depending on the situation.

Car insurance costs for new drivers can be pretty significant, no matter if they need liability insurance or full coverage. Let’s look at insurance premiums for young drivers and how they can get lower rates.

What is the cost of insurance for new drivers?

So, how much is car insurance for new drivers? The average cost of car insurance for a 16-year-old driver in the United States is around $800 per month. Considering that the average driver in the U.S. pays around $130 a month, insurance for a new driver can be a financial burden. Fortunately, insurance rates for new drivers begin to drop after a few years as they establish a safe driving record. By the age of 20, the average monthly cost for insurance dips to around $400 per month, and by 25, insurance rates level to about $140 per month. Developing and maintaining a good driving record will be the key to lowering premiums for new drivers.

Why do age and experience matter?

While teens learn how to drive, they will pay a significant amount for insurance premiums. The biggest factors when insurance companies extend coverage to young drivers are age and experience. Teens from 16 to 19 years of age are at an elevated risk for tickets, traffic accidents, and other vehicle incidents. Historical claim data shows that teens are more likely to file insurance claims than any other group of drivers. This is mainly because they haven’t had enough experience behind the wheel to develop good driving habits and defensive driving techniques. Insurance companies see teens as high-risk and, as a result, charge large premiums to provide coverage to new drivers.

How can you get lower rates for new drivers?

No matter how you slice it, teen drivers will pay more for auto insurance. Due to being young, inexperienced drivers, insurance companies have to charge larger premiums to offset the risks. Fortunately, there are a few things that you can do to find lower rates. The best way to get lower rates for a new driver is to add them to an existing policy. Many parents add their teen drivers to their policy to take advantage of the discounts and reductions afforded them. You might also try shopping around for various quotes through an online comparison tool. Insurance companies have varying policies and offer different rates for young drivers. Shopping around might lead to finding reduced premiums for teens.

Teen drivers pay some of the highest insurance rates in the country. Unfortunately, this is the price that comes with learning how to drive. Maintaining a good driving record, however, and shopping around for lower rates can help young drivers find policies and premiums that could be more manageable.


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