Jessica Sautter is a Content Writer for CarInsuranceCompanies.com with a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in Mathematics.

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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 29, 2020

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Here's what you need to know...

  • Getting your driver’s license is an exciting time for most teens
  • Inexperienced drivers who wait until they are older to get their license will also pay for being inexperienced
  • As the teen ages and gain experience, the rates will drop

Getting your license should be a joyous time. After all of the planning, practicing and anxious awaiting, you have finally passed both the written and the driving test to prove that you have the skills that you need to operate a two-ton vehicle.

After you get your license, it is time to get down to business and make sure you have adequate coverage.

Buying car insurance is an obligation that you will take on when you are licensed.

Start comparing car insurance rates now by using our FREE tool above! Enter your zip code to get started now!

Table of Contents

Insurance Costs Are Higher For New Drivers

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One thing you need to prepare for is the high cost of insurance. Part of being inexperienced when you buy insurance is paying the high-risk premiums.

Insurance costs for the young and the newly licensed are just naturally going to be higher than they would be if you had already had your license.

In fact, you can expect to pay as much as three times more than someone who has experience as a new driver.

If you think that is a biased or discriminatory practice, read on and learn why insurers feel like they need to charge higher premiums:

– Inexperience

When you get a new driver license, you do not have any experience under your belt. Insurance companies like to look at a driver’s history and trends in their motor vehicle report to see if they make good decisions while they are driving.

It is not possible to do this with a new driver because there are no reports or trends to reference. When there is nothing to reference, the insurer can only assume the driver will be a greater risk.

In the insurance industry, where there is a high risk there are higher premiums.

The lack of data is not the only reason why new drivers pay more for coverage. Another major contributing factor is that people who are new to driving have not had the time to develop their skills.

The inexperience shows in the statistics. According to studies, drivers with less than 3 years of experience are 3 times more likely to get into a crash.

This same category of drivers causes more than 50 percent of motor vehicle injury costs. This does not even include how much property damage is caused by accidents when a new driver is at-fault.

– Age

Some people assume that they can avoid the high costs of auto insurance when they are not licensed during their teenage years.

Their mentality is that they can wait until they are in their 20’s and then skip the high premiums. Unfortunately, most states have a rating system that does not only consider age when setting rates.

In addition to considering a driver’s age, the company will also consider the years of driving experience the driver has.

Age is considered because of your mentality and maturity at the time.

Younger males tend to drive more aggressively. They also tend to drive faster and take more risks while they are driving at higher speeds.

Young females also have a high rate of accidents, but not as high as males in their age group. The age and the inexperience of new drivers who are in their teens will work against them.

Inexperienced drivers who wait until they are older to get their license will also pay more.

This is why someone who is 25 will pay high rates with no years of experience, but not as high of a rate as a 16-year-old who just earned their license the same day. As the teen ages and gets

As the teen ages and gain experience, the rates will drop. As the inexperienced adult gets experience, their rates will drop. Typically, people with 9 years or more experience will start to pay standard rates.

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How much higher are the insurance costs for new drivers?

Now that you know why the costs are higher, you might be asking yourself just how much more you will pay.

This is a difficult question to answer because of all of the different factors that can affect your car insurance premiums.

Some of these factors include:

  • Your driving record
  • Car
  • Car usage
  • Territory
  • Credit
  • Mileage
  • Coverage selection

Each of these factors is considered when a premium is quoted. You can consider averages, but the only way to really learn what you will pay is to get quotes for yourself.

How much insurance costs depends entirely on how you go about getting coverage.

For a teen or an adult driver who lives in a household with their parents or their family, it is possible to be added to a policy that is already in force.

When doing this, the cost to add a new driver tends to raise the premiums of the policy up by 50 or even 100 percent.

Costs are much higher when the same newly licensed driver decides that buying their own insurance plan is best.

In some scenarios, like when the driver is the registered owner and does not live in a household with others, buying a separate policy is the only option.

The rates for this policy are going to be much higher because there are no policy discounts, experience discounts, or loyalty discounts to keep rates down.

How can you keep premiums lower when you are inexperienced?

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  • Keep a clean driving record. Some insurers will not even cover new drivers who have blemishes on their records.
  • By choosing a safe car for your teen and then pricing the cost of insurance for the model before you buy it, you can manage your insurance costs. It might even be best to buy an inexpensive car with just liability coverage at first to avoid comprehensive and collision costs.
  • New drivers will earn discounts throughout the years, but there are discounts you can get immediately as well.

It can be painful to see how expensive car insurance for new drivers can be. If you choose the wrong company, the cost can be double what you predicted.

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