Car Insurance for Young Drivers: What You Need to Know Before You Buy

Car insurance for young drivers is expensive and quality companies can be difficult to find. Car insurance quotes are calculated based on sets of information. This information includes the make, model and year of the vehicle, age of the driver, driver's credit history and the grades of student drivers. This information is collected and processed by the insurance company in an attempt to assess the risk of the insurance policy. More responsible drivers are less risk for the company, so the rates offered to these drivers is often lower. Unfortunately, young drivers have little driving experience and are therefore automatically in a higher risk category than older drivers. Young drivers also have some level of immaturity, though maturity levels vary widely between individuals. This immaturity affects the young driver's ability to assess and respond to situations while driving that the insurance company views as additional risk. While car insurance for young drivers will always be higher than car insurance for older drivers, with all other variables being equal, there are things you can do to lower your costs, and pitfalls you should avoid when purchasing car insurance.

Begin shopping for car insurance with your parent's insurance provider. Request a quote with this provider on your parent's policy if possible and a quote for your own policy. Make a list of the type of coverage, deductible and coverage amounts that you want and request the same coverage for each policy quoted to ensure that you are comparing similar policies. You do not want to compare the rates for a policy with a $500 deductible to the rates for a policy with a $1000 deductible. Chose the highest deductible and the lowest payout amounts that you are comfortable with receiving. Keep in mind that if your vehicle is damaged, your out-of-pocket costs could be considerable with a higher deductible and lower maximum payouts on the policy, but the rates for these policies will be smaller.

Request quotes from as many insurance companies as possible. Get quotes from all of the major insurance companies such as Allstate, Nationwide, State Farm, Progressive and Travelers. Don't forget the smaller companies available in your state and definitely get a quote from the Farm Bureau if this company is available where you reside. While obtaining your quotes, ask the company to list their available discounts for which you may be eligible. Many companies offer discounts to students with good grades and to individuals who have completed a safe driving course.

Keep in mind that the rate quoted is not the most important aspect of the quote. When evaluating each quoted rate, consider how confident you are that this company will pay claims fairly and within a timely manner. Some companies also offer lower rates the first year, but substantially increase rates every year after the first. Unfortunately, many policy holders do not know the standards and responses of their insurance carrier until they need to use the policy. If you find that your insurance company is unresponsive or raises rates at every renewal, change to a new insurance company.

If you see an advertisement for cheap insurance for young drivers, your best course of action is usually to run in the opposite direction. Insurance companies know that insurance rates are higher for young drivers and that these drivers often have difficulty paying the rates required. Some insurance companies seek to meet the need of high-risk individuals, but some companies prey on young drivers.

High-risk insurance companies specialize in offering coverage to individuals who have trouble obtaining insurance coverage at a standard company. These high-risk individuals usually have spots on their driving records such as speeding tickets and accidents, or they have allowed their car insurance to lapse for an extended period of time. These factors make them too expensive for a standard insurance company to cover. In this high-risk pool, a young driver is not the highest risk, so young drivers are often offered competitive rates. However, the rates offered will be similar to the rate you will receive from a standard company. When you seek coverage from a standard insurance company after receiving coverage from a high-risk insurance company, your rates may be higher than if you had always received coverage from a standard insurance provider. Insurance companies assume that if you have been forced into a high-risk policy, that you did something to deserve it. After you turn 25, you are no longer considered a high-risk driver because of your age and your rates will go down.