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Young Drivers Car Insurance For Starting Off

Written by Todd Clay. Posted in Research Last Updated: 08/06/2010

How good grades, marriage, and fewer accidents lessens auto insurance premiums for younger drivers

young woman holding car keys

What she needs to know about auto insurance before she gets behind the wheel.

There are two absolutely inescapable factors to consider when dealing with young drivers car insurance.

First, it’s required. Every state requires at least some sort of liability coverage regardless of how old a driver is. In addition, if payments are still being made the lien holder will require full coverage.

Second, it’s expensive. Insurance is a business of statistics. Statistically younger drivers are responsible for more accidents and more insurance claim payouts than older drivers. That’s why car insurance for teens is more expensive.

This is true for all single drivers until they turn 25. That’s when most insurance companies back off on their premiums.

Accident-Free and Married Young Drivers Pay Less

There’s not much you can do about your age. However, there are some ways to minimize costs.

The single best thing a young driver can do to contain auto insurance costs is to staying out of accidents. If your record is clean, insurance companies will reward you with discounts and lower rates. However, one incident can kill a decent rate. That’s why it’s important to keep your driving record clean.

Another bonus goes to married drivers. Young drivers usually catch a break once they get married – whether or not they’re 25. We don’t recommend getting married just to save on auto insurance, but it is something to look forward to if your wedding day is approaching.

Insurance Less for Drivers With Cheaper Cars

Another tip is to drive a vehicle that is cheaper to insure. That means getting an older, paid-for vehicle and a liability-only policy. If a young driver is still on their parents’ policy, this doesn’t necessarily mean he or she is stuck strictly driving that car.

In most cases any driver is allowed to drive any car on a given policy. But make sure you don’t run afoul of underwriting requirements. Some companies insist on putting the highest-risk driver on the most expensive car to insure. Some agents and brokers can be sticklers about that one – just check with your insurance company to be sure.

A young driver should also stay on a parent’s policy as long as possible. At the very least insuring separately usually means the loss of any multi-car and longevity discounts. Many companies will allow a child to stay on a parent’s policy until college graduation, marriage or age 23, whichever comes first. These rules vary widely from company to company, so check with your company to be sure.

Good Grades Lower Rates for Young Drivers

Another benefit auto insurance companies offers are good grade discounts. Most insurance carriers offer student discounts to high school and younger college students. The good news is you don’t need to attend Harvard to get the discount. Documented proof of a 2.0 GPA or higher from a school transcripts should be sufficient to qualify for the discount.

How is this possible?

Insurance companies figure that young drivers in school with good grades get into fewer accidents than young drivers with bad grades or not in school at all. It’s all in the statistics – that’s why they reward good grades and good driving with better insurance rates.

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Todd Clay

Todd Clay is a former insurance agent with the largest insurance company in the United States. He earned his Bachelor’s from the University of Texas. He’s worked in several fields but has specialized in insurance, financial-related information, and technology. He blogs at Car Insurance Guidebook.

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