You’ve just got your driver’s license! Time to go cruising around the streets of your town without a care in the world! Except you do need to have a few cares—one of the most important being that of insurance. Here are a few things new drivers need to know about insurance coverage.
Insured Car or Insured Driver?
Even though you have your license, you might not have your own car yet. Maybe you’re just borrowing your parents’ car whenever they let you. Do you still need insurance?
You definitely need to be listed on their policy as a driver, and their premiums will likely go up as a result. However, as a rule, what’s insured is the car, not the driver. Your coverage while driving is whatever policy they’ve already established for that vehicle. Likewise, if you borrow a friend’s car, their insurance will cover it if you’re in an accident.
However, if you plan on borrowing cars a lot, or continuing to do so for the foreseeable future, you might consider non-owner car insurance. This way, if you’re in an accident in someone else’s car, and their liability insurance only covers a certain amount, your insurance as a driver will kick in and cover the rest.
You probably already know that car insurance for a new driver is expensive. There are a number of reasons for this. First, your lack of experience makes you a liability on the road. Age is a factor too. Statistically, drivers under 25 are much more likely to be involved in accidents than drivers who are older. Some insurers won’t provide coverage to anyone under 25 at all, as the risk factor is considered too great. Those that do cover younger drivers tend to charge an arm and a leg.
Also, if you’re young, you’re likely lacking in a number of other things insurers look at to determine your car insurance costs. You haven’t had a chance to build up a good credit history, nor are you a homeowner, both of which can net you insurance breaks. You also pay more if you don’t have a college degree, so if you’ve gotten your license at 16 or 17, you likely have a few years before you can take advantage of that.
Keeping Costs Down
There are a few things you can do to defray costs as a new driver. First, if you’re able to remain on your parents’ policy, do so as long as you can. You can still make the payments yourself, but being on an established policy will cost much less than getting a brand new one as a new driver under 25. Adding your car to their policy may also qualify you for a multi-car discount, making it much cheaper.
If you can’t get or stay on your parents’ policy, look around for insurance providers with cheap premiums, and see what you can find. You may also qualify for certain discounts. If you’re in school, maintaining a GPA may get you a cheaper rate. And of course, the best way to lower your premiums is to drive safely. If you can keep your record clean, and avoid accidents, tickets, and other incidents, many insurance companies will reward your good behavior (and decreased risk to them) with a lower insurance rate.
If you’re nervous or confused about the kind of coverage you need as a new driver, what it covers, or how to pay for it, talk to an insurance agent. They’ll help you understand your options and choose which one works best for your personal and financial needs. Happy driving!
Contact us to learn more!