The New Driver’s Guide to Car Insurance

Congratulations on obtaining your license! You passed the test, and now you are ready to drive. You have your car (or your parents’ car), your destination, and your “need for speed” intact and ready to go. But, before you get moving just yet, here are a few helpful tips to help you navigate the world of teen drivers’ car insurance that will help you keep you and your parents away from premium hikes. The first rule of thumb for safe driving and insurance is to leave your “need for speed” at home.

Rules that Change with Experience

Car insurance fees are based on ratings of drivers. As a new driver, no matter where you go to buy your insurance, you are a higher than average risk. Your lack of experience behind the wheel makes you close to the worst risk for the insurance firm. However, your parents probably knew that which is why they likely enrolled you in those behind the wheel classes, which give you just enough experience that you are a slightly lower risk, which amounts to a discount. As each year passes and you gain experience without any incidents, you will notice your premiums will decrease, leaving a little extra money in your pocket. The magic age for most companies is 25 unless you just started driving. Most insurance companies find those over the age of twenty-five with at least seven years of driving experience to be a much lower risk than those under that age.

Understanding Coverage

Today may not be that day, however, one day, you will need to buy your own insurance. You will need to understand what raises rates, lower rates, is required by law, and is just a good idea to carry. There are several variables that you can change to lower your overall rates. The first variable is the type of vehicle you drive. The newer the vehicle or more expensive, the higher your premiums. However, certain older vehicles that can be considered riskier than others also carry higher premiums. Research your intended purchase and check with your insurance company before purchasing a new or new-to-you vehicle to discover your actual rates to insure that vehicle.

Should you purchase your car in full, have no payments, and no lease, you must carry at least collision coverage, which will cover you in the event you hit another vehicle. This coverage makes sure you can pay for the damages to the other vehicle or driver. You must also carry some form of PIP Coverage unless your health insurance covers car accident related injuries. Otherwise, should you be in an accident and receive injuries, you have no medical coverage.

If you do not own your vehicle in full, most lenders will insist you also carry OTC (other-than-collision) coverage, which covers most damage done to your vehicle in an accident. By carrying OTC coverage, you are guaranteeing the lender that the vehicle is fully covered and protecting their interest in your vehicle.

This is just the tip of the iceberg of insurance for new drivers. To learn more about insurance and how to navigate the insurance world when you begin driving, contact the agents at Protective Agency Insurance at (877) 739-9367.