Car Insurance Guide for New Drivers in the USA

One of the questions that linger in the minds of young drivers is that how exactly the Car Insurance works for New Drivers. Well firstly there isn’t any vehicle insurance policy specifically catering the New Drivers in the USA.

Every U.S. state determines its peculiar set of requirements for minimum vehicle insurance policy. The Car Insurance policy for New Drivers is exactly the same as any other policy for experienced drivers. However the deficiency of driving experience for such New Driver does change the price charged for their Car Insurance Policy.

The key requirements that need to be fulfilled by a New Driver in USA

Any New Driver is expected to obtain and maintain Car Insurance policy that satisfies the minimum liability coverage required by their respective U.S. state, just as any other driver will. Normally, such Car Insurance has to include liability coverage for bodily injury along with property damage due to vehicular collision. Certain U.S. states also mandate maintaining of an uninsured cum underinsured motorist coverage as well as personal injury protection coverage.

The major Car Insurance coverage types

The following are six of the major standard car insurance coverage types:

• Liability coverage;
• Collision coverage;
• Comprehensive coverage;
• Uninsured Motorist coverage;
• Personal Injury Protection coverage;
• Medical Payments coverage.

The factors influencing the prices of a Car Insurance policy

For a New Driver numerous factors can influence the prices of any specific Car Insurance policy. Such driver may have to pay varying prices due to associated factors such as:

• Age;
• Driving experience;
• Gender;
• Marital status;
• Coverage limits;
• Location;
• Make, model, mileage, and type of vehicle;
• Driving record; and
• Credit history.

The average cost of Car Insurance for New Drivers

For a full insurance coverage the estimated rates for New Drivers hover around $6,050 per annum or $504 per month on an average. These rates tend to be relatively high for New Drivers, particularly for teenage and 20s drivers. The following table highlights average Car Insurance rates for New Drivers:

Age	Average Car Insurance Rates for New Drivers
	Monthly	Annually
16	$632	$7581
17	$468	$5612
18	$413	$4958
19	$309	$3708
21	$232	$2786
25	$195	$2336
30	$153	$1831

Note: These prices are as of December 2023.

However various insurance providers in the USA offer varying Car Insurance prices. To give an idea the following table highlights the indicative average annual prices for Car Insurance with full coverage for a new driver aged 25 year, provided such driver maintains a decent credit rating as well as respectable driving record.

Car Insurance Provider	Average Car Insurance Prices
	Monthly	Annually
Nationwide	$139	$1663
Travelers	$141	$1694
Erie Insurance	$150	$1796
Geico	$151	$1807
USAA	$152	$1825
State Farm	$163	$1952
American Family	$169	$2023
Auto-Owners Insurance	$173	$2076
Progressive	$187	$2243
Allstate	$247	$2958

Note: These prices are as of December 2023.

The reasons that make Car Insurance too expensive for New Drivers

As indicated in the table above, New Drivers are required to pay up to $3,000 per annum on an average for their Car Insurance policy subject to the insurance provider available in their respective state. The primary reason given for offering more expensive rates to insure any New Driver is their inexperience in driving and the associated risk. In fact, new young drivers are more prone to be involved in a vehicular collision that, in turn, further escalates the Car Insurance prices.

The high likelihood of getting involved in an vehicular collision due to the inexperience of the New Drivers been substantiated by various study conducted on the subject. For instance, Vehicular collision is the second-most prominent reason responsible for the death of teenagers in the USA, as per the CDC or the Centers for Disease Control and Prevention, USA. Similar reporting has been done by the IIHS or the Insurance Institute for Highway Safety that indicates almost two in every three teenagers who died in vehicular collisions were males in the year 2020.

New Driver can save on his or her Car Insurance policy

The best approach for a New Driver to receive the lowest Car Insurance prices is by contacting as many insurance providers as there are in respective U.S. state. Although there isn’t one shortcut or fail-proof technique to figure out the most effectively priced Car Insurance policy. Instead there are multiple factors to be considered while looking for the lowest or value-for-money Car Insurance policy. The following factors might be helpful while purchasing Car Insurance by New Drivers:

• Insurance Providers Comparison

Every insurance provider will quote a different Car Insurance price. It may be a little time-consuming but comparing various Car Insurance quotes may prove effective in figuring out the best option as per specific needs. By breaking down offerings of multiple insurance providers while factoring-in the discounts along with customer reviews can expedite the process.

• Improve Credit Score

A poor credit score results in higher Car Insurance prices therefore building a good credit score will support the probability of getting lower Car Insurance prices for any New Driver.

• Look for Discounts

Numerous Car Insurance providers frequently offer discounts for New Drivers. Some money can be saved using such discounts. Certain discounts that are offered by many insurance providers are:

• Multi-policy or Bundled policy;
• Multi-Car policy;
• Good Student;
• Safe Driver;
• New Car;
• Military.
• Adjust the Insurance Coverage

By adjusting the existing vehicle policy as per requirements might also result in better price quotes. For instance, choosing for a higher deductible plan leads to lower Car Insurance price usually, though it may require paying more when making an insurance claim. Similarly dropping unnecessary coverage may reduce prices as well. In most U.S. states only liability insurance coverage is mandatory instead of full coverage policy.

• Usage Based Insurance

Telematics or usage-based Car Insurance coverage is based on driving behaviors and vehicle mileage. As per this data the Car Insurance rates are determined. The usage-based Car Insurance generally cost less than standard vehicular insurance for drivers having good driving behavior. However usage-based Car Insurance isn’t available in all U.S. states yet and such insurance might not be a wise choice if driving behavior is bad.