How to Get Car Insurance For The First Time
If you’re reading this, then congratulations on your new car! Now that you have the means to become a driver, let’s talk about a couple more requirements before you’re able to take to the streets -the car insurance requirements, that is.
More than 90% of the United States requires drivers to carry a certain amount of auto insurance when driving at any time—because of this, shopping for car insurance is often the second step in car ownership after purchasing it.
When it comes to shopping for car insurance, it’s a matter of looking at various quotes and becoming an expert, in a way, in the kind of coverage you want.
Car insurance can be bought directly from an insurance provider, or the dealership may direct their customers to approved insurance providers that they’ve been working with. But sometimes, the dealer-approved insurance may not be economical or the right coverage for some drivers.
Before diving into the specifics, here are a couple of pre-insurance shopping tips to help you get started. Always base your desired auto coverage on how often you drive, vehicle value, and how much you would be able to pay in the event of an accident rather than your budget. Go to various insurance providers and receive multiple cheap car insurance quotes, then compare them.
The Three “Cs” of Shopping For The Best Car Insurance
This is the opportune time to introduce you to the three “Cs” of shopping for auto insurance. Every smart shopper does the following when learning how to buy car insurance:
- Craft - Craft an auto insurance policy that is economical for you with all the proper protection you need.
- Compare - The most important part is doing the shopping itself by getting multiple quotes from multiple insurance providers, both national and local. You never know which one will offer the best deal.
- Commit - At this point, you’ve found a provider with an ideal insurance policy for you as a driver. Nothing left to do but commit to the purchase and maintain your coverage.
What Are The Different Types of Car Insurance You Can Buy?
A significant part of deciding how much insurance you need for your car is knowing the different car insurance policy types a provider can offer. There are policies that cover the vehicle, the driver, property damaged by the vehicle, and other drivers, both insured and uninsured. Some are required by law, and others are optional policy add-ons.
The different types of car insurance coverage types are:
Liability Insurance coverage
If you are at fault in a car accident, liability insurance covers the injuries to another driver and damage to their car. This type of coverage is required by at least 90% of the United States. This will usually be the type of insurance the dealership will try to sell you after you purchase a car.
Personal injury protection
This insurance covers injuries and the medical expenses for yourself (as the driver of the car) and any passengers present in an accident that you were at fault for. Other lasting expenses like lost wages are covered by this policy.
Uninsured and underinsured motorist insurance coverage
Some drivers may not carry the required liability coverage and thus, will not be able to pay for damages and injuries they cause you. Carrying an uninsured or underinsured motorist policy will provide coverage for those unfortunate encounters.
Collision insurance coverage
One of the foremost insurance add-ons since liability coverage won’t cover a driver’s car damage in an accident they caused. A collision policy provides coverage for the at-fault driver’s vehicle.
Comprehensive insurance coverage
This is usually bought as a companion piece to collision insurance. Whereas collision covers an at-fault driver’s auto damage, comprehensive coverage covers an at-fault driver’s personal injuries sustained in an accident.
If a driver leases or rents the car rather than owns it, they’ll be on the line for any remaining payments to the leaser in the event the leased car is totaled or damaged beyond its current value. Gap insurance covers those payments and is ideal for drivers renting their vehicles.
Roadside assistance insurance
Drivers often experience flat tires, dead batteries, or motor issues from natural causes. With roadside assistance, drivers can pull to the shoulder of the road, and whatever tow truck or tire changer comes their way is covered by their insurance.
New car replacement
If a car is totaled or damaged to an extreme degree, a new car replacement policy can cover the costs of a replacement car or a rental until it is out of the auto shop.
What is Car Insurance Like For First-Time Buyers or New Drivers?
It’s essential to point out at this point that new drivers or anyone purchasing auto insurance for the first time will likely receive higher estimates and pay higher premiums than an average policyholder would. The reason why, as previously mentioned, is because they are new drivers. This doesn’t just go for a 16-year-old receiving their license and driving independently for the first time, but anyone who has recently received their driver’s license.
Insurance companies charge their customers based on the risk they pose on the road. They use such records as driving history to gauge this. Since new drivers have no history on the road yet, the insurance providers often assume their risk to be high. For their first year of coverage, new drivers can pay at least $5,000 in premiums and other insurance fees.
For new drivers, it’s unavoidable, but everyone has to start somewhere. Every driver got their rates the way they are by safe driving and maintaining their auto insurance policies.
So, the most that new drivers can do is find an auto insurance provider that offers the best and most economical first-time policy for themselves. Many first-time drivers limber up on their vehicle information and registration before diving into multiple online or in-person quote agents then comparing and contrasting before the ultimate decision is made. More insurance shopping tips for beginners come later in this post.
What Information do New Drivers Need For Car Insurance?
The short answer is most of their personal information. Insurance providers use some instances of a driver’s personal information to gauge the cost of their insurance. Something even as simple as an address can determine how high or low a driver’s rates will be.
Must-haves before buying insurance are:
- Driver’s license
- Martial status
- Education level
- Driving history (which can be obtained from your state’s DMV)
- Insurance history (won’t apply to new drivers with no such history)
- Vehicle information (like make and model)
- Vehicle identification number
- Date of purchase or bill of sale
- Registration with driver or owner’s name
Where Can You Buy Car Insurance?
There are a couple of different routes of buying car insurance that a new driver can take. Whether it’s for convenience, quick, informative, or budget purposes -there’s a method of purchasing car insurance that suits it.
The end result of having insurance is guaranteed for each option; it’s just a question of how involved the driver wants to be in the process. This section identifies the different purchasing methods; the following subsection goes over the strings attached to each one.
A new driver can buy car insurance in the following ways:
Direct from an auto insurance provider
No insurance agent or broker is needed when a new driver uses their company’s website. Many websites offer quotes with a couple of clicks which makes comparing different providers much easier. Purchases can be made in just a day too.
From “captive” auto insurance agents
“Captive” agents represent a single insurance provider and act as the policyholder’s liaison for all their insurance needs. This is usually practiced by larger national insurance companies.
From an independent insurance agent
Independent brokers work for or represent multiple insurance companies rather than just one. An agent can represent a national or local provider and earn commission based on the sales they make. This is a good choice for shoppers looking for a variety of options at different prices.
From specialty insurance companies
There are specialty insurance providers who uniquely offer auto insurance for high-risk drivers. These drivers usually have a DUI conviction, series of traffic violations, or a license suspension. New drivers may not be considered a high-risk driver by those standards but are still held in near equal regard by insurance companies.
Pros And Cons of Buying Car Insurance Directly From a Provider
Being able to get car insurance online directly from a company’s website is the easiest, most pressure-free way to shop for auto coverage. Quotes are a couple of clicks away, and no one has to be an expert in auto insurance to use the online engine. The process is largely automated, so contact with an agent isn’t necessary. Often, new drivers are able to get insured the same day they discover the webpage.
Inversely, buying insurance directly from an agency’s website is streamlined, so customers may not receive much attention to detail with their insurance. In short, customer service may be nonexistent.
The prices listed in online estimates aren’t guaranteed either. They’re called estimates for that reason -they aren’t exact. The process isn’t over and done either. New or incoming policyholders will have follow-up emails and calls to contend with in the foreseeable future. But, all this may be worth it for the freedom to manage your insurance policy as you see fit.
Pros And Cons of Buying Car Insurance From a Captive Agent
Drivers who get their car insurance from captive agents often do so because it’s good to have an expert on insurance whenever they need them. Those unfamiliar with insurance can quickly become an expert with an agent guiding them through their policy options.
They could even help their policyholders manage multiple insurance coverages even beyond auto insurance. The agent-customer relationship is designed to last long term so new drivers can gradually lower their premiums by practicing safe driving.
A captive agent, however, doesn’t nearly offer as many options as an insurer’s website or location. Often, captive agents have a set list of offers they will show to each of their incoming customers.
At the same time, the agents earn a commission based on their customer’s premiums so they could prioritize pricier options as opposed to the best options. Lastly, there is a lack of comparison when it comes to shopping with captive agents.
Pros And Cons of Buying Car Insurance From an Independent Agent
Independent agents generally have more knowledge and more to offer than captive agents. Because they work with multiple insurance providers, independent agents are able to make even the most complex parts of an insurance policy seem elementary to those customers who are unfamiliar.
Prices and coverage are always made flexible with independent agents with a more personalized purchasing process. Of course, if a new driver has an idea of the kind of insurance they want, they would be able to get it free of add-ons.
A notable limit that independent insurance agents have is that they are unable to get quotes from certain insurance companies -usually ones that use captive agents. These are typically the larger, national providers.
Another limitation is that they may be unable to sell certain types of insurance policies. But the most glaring con of buying insurance from an independent agent is that they don’t prioritize the most economical option. Not just due to the fact they work on commission, but also because they may not be able to sell the most economical option in the first place. Despite this, independent agents are more flexible with their prices than captive agents.
Pros And Cons of Buying Car Insurance From a Speciality Provider
Specialty insurance agencies’ customers usually aren’t first-time or new drivers. These agencies deal in auto insurance policies for high-risk drivers with a driver history of recent accidents, DUIs, traffic violations, or have driven without insurance.
Although insurance companies label new drivers as high-risk, it’s not due to any past violations or license suspensions. Rather it’s the fact that they lack a driving history, so they’re not sure what to expect from them.
The agencies that offer such policies tend to be local rather than national. It’s not impossible for a new driver to get insurance from a specialty provider. They can also help compare rates from different high-risk policies from other providers. The only con when looking at such insurance is whether or not it’s truly right for the driver or if they’ll be paying too much.
How to Get Car Insurance For New Drivers
By now in the reading, you have more than adequate surface and perhaps some deep knowledge in the world of insurance coverage. All that is missing is a step-by-step guide on actually buying and choosing the car insurance which best fits you as a new driver.
Steps on How to Buy Car Insurance for New Drivers
- Determine how much auto coverage you need - The third section detailed the different types of auto coverage you can choose from as add-ons. The first step is always ruling out any that may be an unnecessary expense.
- Fill out an application for car insurance quotes - With all your previously mentioned personal information, fill out applications for quotes with all the insurers that offer the coverage you’re looking for. You’ll never be penalized for filling out more than one.
- Receive and compare car insurance quotes - After receiving your quotes, it’s time to do some comparing. Insurance premiums aren’t the only cost that should be looked at. Things like claim satisfaction and deductibles should also be heeded as well. Also, remember to look for any unnecessary coverages the insurance company may have listed in the quote. There are several websites that specialize in insurance comparison rather than sales.
- Select provider and get insured - Once you’ve selected a car insurance provider with the best policy options for you, the next step is signing up. You’ll be able to do so with whoever gave you your quote. Note that some insurance companies offer discounts for customers who take out more than one policy with them. This is often how new drivers save.
- Maintain car insurance coverage - All that is left to do is maintain your auto coverage by paying your monthly rates on time and practicing safe driving. The best way to make an impression with an insurance provider is to drive safely, and eventually, they’ll see that you are not a high-risk driver and lower your premiums. But this whole process isn’t just for first-time drivers looking to get insured. Drivers with an existing policy they wish to cancel can also shop for insurance the same way.
How Much Does Insurance Cost For New Drivers?
Finding cheap car insurance for new or student drivers is near-impossible. A lack of driving history is an indication of high risk for most insurance companies, as continuously stressed throughout this post.
So How Much Does Car Insurance Really Cost? The average a new driver will pay for car insurance is $397 a month or $4,762 annually. Some insurance providers even charge their new drivers up to $11,000 a year.
Many new drivers take advantage of discounts offered when they bundle their auto insurance with home or renter’s coverage with the same insurance company, participate in safe driver programs, and drive a car with notable safety features. That is all the secrets to know; you’re now able to smartly shop for auto insurance.