New Drivers: Why is Insurance so Expensive?

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First of all, I would like to say congratulations on getting your license. You have just stepped into the world of another responsibility. Most people, especially teenagers, would see this as a freedom they have been waiting for up until this point. Unfortunately, this is not how the insurance companies view you. You are excited because you have now become mobile! The insurance company sees this as a liability waiting to happen. This is why new drivers, young and old, have a higher premium than more experienced drivers. If you are not a teenager, rest assured, you will see a less expensive premium than a teenager, just for being older. Seems unfair teenagers would say. Not so much; the insurer views an older driver that might have just as much experience as a new teenager driver less of a risk. This is due to life experience and knowing how to react and respond to a situation better. In other words, they are more mature and know what responsibility is.

If you are reading this and you are a teenager, please do not be offended, this is just the harsh realities of the insurance world. They take a risk on you, and they make sure they are as calculated as possible. In turn, this increases your premium.

So how can I Lower my Premium?

There as indeed ways you can lower your premium. If you are a teenager you can:

1. Take Driver Education in School. Most schools offer this as a course in the daily curriculum. If Drivers Ed is not available at your school, you can take a drivers class at your local Division of Motor Vehicles (DMV), or you can take a course online. There are many sites to choose from online, just make sure the site you choose is accredited.

2. Keep your grades up! Yes, good grades do pay off. And you were thinking your grades were just to get into a good college. Insurance companies do not have much to gauge your creditworthiness by, or how responsible you are. Getting good grades and maintaining them shows them some good points. A student that has good grades is typically going to be more responsible than a teenager that lets their grades slip. Although this is not always the case, this is what the insurance company sees.

3. Pick a safe, non sporty car. If you are looking to save some big bucks on your car insurance, you want to go with a car that is not sporty in appearance. If they see a sports car, they hike up the premium because sporty cars are associated with speeding, therefore, a higher risk. Also, SUV’s and trucks are also considered a higher risk vehicle because they are prone to roll over and flip. These types of vehicles are typically reserved for the more experience driver because of size and handling.

4. Stay one your parent’s policy. They have established driving records. It is typically less expensive than your own policy.

If you are not a teenager, you already have your age going for you. Here are some other measures you can take to lower car insurance.

1. Take a driving course. As discussed earlier for teenagers, you too can take a driving course to get a discount on your policy premium.

2. Insure with one company. If you won a home and currently have homeowners insurance, see if your insurer also covers automobiles. You can often get more of a discount when insuring multiple items with a company.

3. Get a car with many safety features. If you are in the market for a car, make sure you ask about safety features. Not only will it offer you ultimate safety when in a wreck, you get discounts for additional safety features outside the standard ones required by law.

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