Rachael Brennan has been working in the insurance industry since 2006 when she began working as a licensed insurance representative for 21st Century Insurance, during which time she earned her Property and Casualty license in all 50 states. After several years she expanded her insurance expertise, earning her license in Health and AD&D insurance as well. She has worked for small health insuran...

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Sep 22, 2020

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Key takeaways...

  • If you’re a first-time driver and you just recently got your license, your experience could affect your rates
  • All car insurance companies base insurance rates on how long a driver has had their driver’s license
  • You can be classified as an inexperienced driver just like teen drivers regardless of your age at the time
  • Some states base rates off of age, but age is only partially used when setting rates for older first-time drivers
  • If you’ve had your license but never owned a car, having no established insurance history could affect rates

Not everyone jumps at the opportunity to get their driver’s license when they turn 16. The process of learning how to drive the same for teens as it is for older adults, but getting a license older in age is typically easier because there are fewer steps.

Getting a license as an adult it a lot easier than getting an adult as a teen, but that doesn’t mean that you should assume you’ll pay less for insurance if you’re an older first-time driver.

Don’t overpay for the coverage you need. Compare quotes today to find the best rate for your auto insurance.

The fact that you’re newly licensed could work against you if you’re on a limited budget. Here’s what you should know before you start shopping around:

Insurance Rates Aren’t Based Solely on Age

A lot of people think that rates for teens are high solely because they’re young and they’re more likely to be negatively influenced while they are driving.

Young minds do tend to be more impressionable, and this does have some bearing on insurance rates, but that’s not the only reason why insurance rates for teens are high.

Insurance rates for teens are primarily high because they are all inexperienced drivers.

In fact, in some states like California, age can’t even be considered when rating any driver. It’s the fact that teens have just learned to drive and just earned their license that they’re such a risk.

Being inexperienced poses unique risks to the insurer regardless of the driver’s age.

Insurance companies use the term high-risk driver to describe someone who pays more for coverage than the average individual.

When that term is used, it is referring to someone who is statistically more likely than other drivers to get into an accident because of their experience, history, or demographic.

High-risk drivers pay more than standard or preferred drivers.

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Why are inexperienced drivers called high-risk drivers?

It’s easy to see why a company would classify someone who’s had several at-fault accidents as a high risk, but you might wonder why someone without much experience is classified the same way.

You have to consider what it means to be inexperienced when you’re operating a car.

A lot of studies have been conducted that focus on licensing experience and accident trends. When you’ve first issued a license, you’re not as confident of a driver as you are after commuting for years.

This lack of confidence is reflected in the fact that new drivers have more accidents than experienced drivers.

Another factor that justifies that inexperienced drivers should automatically fall into a high-risk class is that there’s nothing an insurer can reference to effectively prove the driver is a safe driver.

Experienced drivers have a licensing history and claim history insurers can reference. The driver must prove themselves by establishing a good history, even if they are older.

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How much experience do you need for your rates to go down?

When you’re young and you’re trying to see the light at the end of the tunnel, most agents tell you that your rates will go down dramatically at 25.

It’s not because 25 is the magic age, it’s because the biggest drop occurs after you have nine years of driving experience. If you’re licensed at 16, the magic age would be 25.

You’ll start to see your rates go down as a first-time driver after you get three years of experience. As long as you keep your record free and clear and you don’t have accidents, you’ll start to qualify for some money-saving discounts.

You might even qualify for a standard rate once you’ve held a license for three years.

What discounts will you get as you gain experience?

When you’re an older first-time driver, you won’t be eligible for any discounts pertaining to driving experience until at least three years.

After you’ve hit the three-year mark and your renewal comes up, you should look for some of all of these discounts and policy endorsements:

  • Good Driver Discount applied when you have no more than one ticket or accident within the last three years
  • Safe Driver or Accident-Free Discount applied when you’ve gone three years without having an at-fault accident
  • Accident Forgiveness you may be eligible for accident forgiveness after going a specified number of years without an accident while insured through some carriers
  • Disappearing Deductible you may be eligible for a lowered deductible as you go years without filing a claim through your carrier

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Will experience driving in another country count?

If you’re an older first-time driver in the United States but you’ve been licensed before in other states, the experience could carry over.

It all depends on where you’re buying insurance and where you were licensed. Some countries will give translated records which are helpful.

If you can provide a driving abstract that shows when the license was issued and if you’ve had infractions, there’s a good chance that you’ll be giving experience credit.

You have to ask your agent, but if you ask you may be able to find lower cost rates as a new driver.

Buying Your First Car

If you’ve been licensed but have yet to own a car, it could affect your premiums as well.

You’ll get the driving experience credits, but you won’t get credits for ever having insurance in your own name. This means that you won’t get money-saving insurance history discounts.

Being older doesn’t always mean you’re wiser. Age usually equates to life experience, but not always. If you’ve waited to get your license, you could wind up paying similar rates as young adults for your first insurance policy.

To find the best rates, get discounts and shop around online to compare the rates through all of the best carriers. Use our free comparison tool today!