Car Insurance for New Drivers

Buying insurance as a new driver is an expensive and confusing maze to navigate. We'll teach you insurance basics and show you how to find the right policy at the right price.

new driver smiling behind wheel of car

Congratulations on getting a license, new driver! Earning the right to drive is a landmark moment in anyone's life. It opens the door to a whole world of exciting possibilities.

One of the only downsides to obtaining a driver's license is paying for car insurance. It's especially expensive for new drivers, because their inexperience behind the wheel makes them more likely to cause an accident or get a ticket.

Whether you're a teenager or adult, you'll need to do your due diligence when shopping for car insurance. This article will take you through the process of shopping for insurance. That includes choosing a company, picking coverage levels and policy add-ons, and getting discounts.

What Kind of Car Insurance Do New Drivers Need?

When shopping for insurance, ask yourself this question: do I have enough coverage in the event of a bad accident? When you're a new driver, this question comes with added importance. You're already paying high insurance rates to begin with, so it's necessary that you get the most out of your coverage.

Minimum Coverage

Every state has legal minimum car insurance requirements. It's the amount of coverage a person needs to legally drive in that state. Specifics vary from state to state, but minimum coverage always includes liability coverage. This helps pay for damages and injuries you cause to other drivers. 

While minimum coverage is enough to get you on the road, it's not enough to protect you or your car. As a new driver, it's a good rule of thumb to assume that you'll make at least one mistake behind the wheel. That could be a speeding ticket, fender bender, a DUI, or a totaled car. Do you have enough coverage in the event of the unexpected? The answer, unfortunately, is probably not.

Minimum coverage pays for damages and injuries you cause to other people and their property. It does not pay for damages and injuries to you or your car. If you have minimum coverage and you cause an accident, you're on the hook your repair and medical costs.

Recommended Insurance Coverage for New Drivers

Because minimum coverage is, well, minimal, we recommend that new drivers buy additional coverage if they can afford it. But what's the ideal coverage amount? Unfortunately, there's no one size fits all advice. Consider these points to assess what kind of car insurance you need:

Learn the basics about insurance

Understanding the building blocks of an insurance policy is the first step in finding the right coverage. Familiarize yourself with coverage terms like liability, collision, comprehensive, personal injury protection, and uninsured/underinsured motorist coverage. For a helpful breakdown on each term, read our short article on car insurance coverage basics. 

Newer cars need more coverage

If you drive a new (or really nice) car, you'll want more than minimal coverage.

First, if you're financing a new car, you need to purchase GAP insurance. A new car depreciates in value the moment you drive it off the lot. If you total it a week after buying it, the insurance company will write you a check for the car's market value, which will be less than what you paid for it. Assuming you financed the car, it's probable you owe more for the loan than the amount your insurer paid you. GAP insurance covers that amount.

Even if the car is completely paid off, it represents an expensive investment. It would be wise to protect this investment with full coverage car insurance. That's especially true if you drive a collector car, or if you live in a disaster-prone area.

You probably don't need full coverage for an old car

If you drive an old beater with a constantly lit check engine light and a laundry list of peculiar problems, don't pony up the cash for full coverage. As a new driver, you're already going pay higher-than-average rates for car insurance. Don't make it more expensive than needed.

Consider choosing a high deductible and skipping comprehensive and collision coverage if your car is only worth a few thousand dollars.

Get accident forgiveness

As we mentioned earlier, as a new driver it's a good rule of thumb to assume you're going to get into an accident at some point. That's why you should add accident forgiveness to your policy. Most major insurance companies offer it as a policy add-on. Accident forgiveness, unsurprisingly, does exactly what the name suggests. It gives you a mulligan after an accident, meaning your insurance rates won't rise after they normally do.

Plan for the worst

If you cause a bad accident and damages exceed your insurance limits, you're at risk of a lawsuit. Other drivers can use legal action to get reimbursed for their damages and injuries. Make sure you have enough liability to cover yourself. We recommend the following amount:

  • Individual Body Injury Liability: $100,000
  • Total Bodily Injury Liability: $300,000
  • Property Damage Liability: $100,000

Do you have health insurance?

If you get injured in a car accident, medical bills can quickly pile up. Hopefully you have decent health insurance. Even if you do, however, health insurance doesn't always cover car accidents. If it does, there are usually coverage limits – meaning you could quickly hit said limit after an accident.

That's where medical payments coverage helps. It pays for medical bills after a car accident. You can also opt for personal injury protection (PIP), which expands on medical payments coverage to reimburse you for lost wages, childcare, physical therapy, and more.

Since PIP offers more coverage, it's usually more expensive than medical payments coverage. You should consider purchasing medical payments coverage.

Best Car Insurance for New Drivers

Let's get one thing straight: there are numerous options when it comes to picking a car insurance company. The following companies offer good policies for first-time drivers including low-mileage options, good student discounts, and safe driving programs. Be sure to check for local companies in your state that aren't listed here.

  1. Esurance
  2. Progressive
  3. USAA
  4. Liberty Mutual
  5. GEICO
  6. State Farm
  7. Metromile
  8. The General

How to Get Cheap Car Insurance for New Drivers

There are two types of new drivers. One is a teenager who recently became old enough to legally drive a car. The second is an adult of any age who, for whatever reason, only recently learned how to drive. Unfortunately, no matter what type of new driver you are, car insurance won't come cheap.

Teenagers always pay the highest car insurance rates of any group. Our study found that teens pay $438 for a standard car insurance policy.

Even if they're not teenagers, new drivers also pay higher rates for insurance. Their lack of experience, a non-existent driving record, and no insurance history means they'll pay higher rates when they first get a license.

One thing is clear: whether you're a teen, 25 years old, or older, it takes work to find cheap car insurance as a new driver. Here are steps you can take to find get the best deal on car insurance for new drivers:

  1. Get on someone else's policy: Do you have a roommate, family member, or spouse with car insurance? See if you can join their policy. Our study found that adding a teen to an existing policy costs $278 a month compared to $438 for an individual policy.
  2. Bundle: Similarly, if you already pay for insurance (like renters or home), you can earn a sizeable discount by purchasing your auto insurance from the same provider.
  3. Skip the sports car: Your car's make and model is a big factor in the price of your policy. Avoid flashy sports cars – they cost a lot to insure even if you're not a new driver. Similarly, trucks and SUVs come with higher premiums because their size can turn a minor accident into a major one. Your best bet is a safe (and perhaps boring) sedan.
  4. Take drivers ed: For teenagers in most states, drivers education is a requirement. But adult new drivers usually don't usually have this requirement. However, just because it's not legally mandated doesn't mean it's not a good idea. Aside from teaching you to be a better driver, completing drivers ed will almost certainly earn you a discount on your car insurance.
  5. Take a defensive driving course: At a cost of about $40, defensive driving courses are pretty cheap. Most insurance companies offer automatic discounts between five to 20 percent for completing one. This is especially helpful for new drivers, as a defensive driving course can help you avoid an accident. It's cheaper and faster than a drivers education course. And unlike drivers ed, you can complete a defensive driving course online.
  6. Enroll in a safety program: Many insurance companies now offer programs that reward safe drivers. Usually, they require you to install a telematics device to monitor your acceleration, braking, and other safe driving metrics. If you meet these driving requirements, you earn a discount. This is also referred to as black box insurance. These companies offer such programs:

These programs can be extremely helpful for new drivers. One of biggest insurance knocks on new drivers is the fact that they have little or no driving history. A telematics program sets rates based on current driving behavior, instead of past performance.

  1. Shop around: Buying insurance as a new driver is a tall task. It's expensive, time intensive, and requires a lot of research. But shopping around is the most important step to get the best cheap insurance as a new driver. Each insurance company uses their own pricing metrics, so you might get two very different quotes for identical coverage. QuoteWizard can help you easily compare insurance quotes for new drivers.
  2. Get good grades: If you're still in school, most insurance companies offer discounts to students with good grades. Earning a B average is good enough to knock 10 percent off your insurance premium with many insurers.
  3. Watch your credit: As a young person, you most likely have minimal credit history. This is a good thing. Hopefully your credit is good, but if it's not, it's easier to repair it since you're young. Good credit is a vital part of the price of your car insurance policy.

Frequently Asked Questions

Q: How do I get on my parent's car insurance?

A: Have your parents contact their car insurance company and ask to add you as a named driver. If you live with them and don't own your own car, it's a straight forward process.

If you have your own car, you will need to add the car on to their policy as well. However, if your name is on the title of the car, there's a good chance the insurance company will require that you buy an individual policy.

Q: Is it cheaper to join my parent's insurance plan, or my own?

A: It's usually much cheaper to join your parent's plan. Our research shows that adding a teen to an existing policy costs $278 a month compared to $438 to buy an individual policy.

Q: How long can I stay on my parent's insurance?

A: There's no age limit for how long you can stay on your parent's car insurance. As long as you're dependent, meaning you live with your parents at least part-time and drive their car, you can stay on the insurance.

However, if you move out or buy your own car, your insurance company will probably want you to get an individual policy. Each insurance company has their own definition for dependent, so contact the insurer to find out the exact details.

Q: Why is my car insurance so expensive?

A: There are a ton of factors that go into determining the price of your insurance policy. As a new driver, a huge part of your insurance rate is your lack of driving experience. Other things that impact the price of your policy include where you live, your credit score, and your car's make and model.

Q: My car insurance is really expensive. Will it get cheaper?

A: If you're a teenager, you're stuck with expensive insurance for at least a few years. If you avoid accidents and citations, your rate starts to lower around age 25. But if you're a new driver at age 25 or above, it'll take a few years of building up driving experience and insurance history before your insurance premium gets lighter.

Tired of paying an arm and a leg for car insurance? Shop around and compare auto insurance rates from at least three insurers. There's a good chance you're paying more than you need to. Let QuoteWizard help you save some money.

Q: I moved out of state for college. Do I need to change my insurance?

A: Maybe. At the very least, you're probably going to have to make a few changes to your policy. Insurance requirements vary by state. First, make sure your current policy meets the minimum requirements of your new state.

Second, check that your insurance company operates in your new state. Most major companies offer coverage across the country, but that's not always the case. If not, you'll need to find a new insurance company. LLC has made every effort to ensure that the information on this site is correct, but we cannot guarantee that it is free of inaccuracies, errors, or omissions. All content and services provided on or through this site are provided "as is" and "as available" for use. LLC makes no representations or warranties of any kind, express or implied, as to the operation of this site or to the information, content, materials, or products included on this site. You expressly agree that your use of this site is at your sole risk.