Car Insurance for First-Time Drivers: 6 Things You Should Know


Plus: What do teens pay for car insurance in each state?

8 min read

A driver’s license is more than just permission to take to the open road. To many, including first-time drivers, it means freedom, independence, and even the opportunity for economic improvement.

But a driver’s license also means responsibility. A vehicle can be a privilege, a danger, a financial asset, and more, and your driving history can follow you from your carefree teenage years well into your adult life.

While driving safely and following traffic laws are essential to being a responsible driver, it’s also important you take care of your insurance needs before ever buckling into the driver’s seat. Below, find all the details on car insurance for first-time drivers you need to know, with input from The Zebra’s licensed insurance agent and adviser Neil Richardson.

teen driver car insurance

6 Things First-Time Drivers Need to Know About Car Insurance

1. What is insurance?

Believe it or not, many adults would struggle to answer this question simply – let alone teens. But a good grasp on the role insurance plays in your financial security at a young age could save you many thousands of dollars in your lifetime.

Insurance is meant to protect you and other drivers on the road from financial hardship arising from car crashes. It can also provide coverage if your vehicle is stolen, vandalized, or damaged due to weather or fire.

Drivers in every state must carry an auto insurance policy to drive on public roads. (Even in the one state that doesn’t explicitly require insurance, New Hampshire, in order to forgo coverage, drivers have to prove they could cover accident costs in the event they caused damage or injury to another party).

2. What insurance is required by law?

Each state regulates auto insurance for its respective residents and determines how much coverage is needed to drive legally.

In many states (21 to be exact), the bare minimum insurance required by law is liability insurance and any other coverage (for your own vehicle) is optional.

About half of states also require coverage for personal injury protection (PIP) and uninsured motorist coverage, too.

Bottom line: in order to legally drive on public roads you must be able to cover the costs of damages or injuries you cause.

3. What are the most important factors to consider when choosing a policy?

  • Following state laws
    • First of all, make sure any policy you choose meets your state’s minimum requirements. If you choose a reputable insurer, this should be a given.
  • Sufficient coverage…
    • Though your state will require you have at least liability coverage, adequate coverage for other scenarios is critical, especially if you’re financing or leasing your car. In these cases you’ll be required to have comprehensive and collision coverage and more factors will be at play (like a deductible, rental car coverage, etc). Make sure any policy you choose covers what you want covered (like weather events, theft, and run-ins with uninsured drivers) and what you need covered by your lender.
  • …at a rate you can afford
    • Price is one of the most important factors for almost everyone. You never want to miss a payment (doing so might raise your rates), so choose insurance you can afford.
    • Compare rates to ensure you’re getting the best rate for your coverage needs. This is especially important for teens as their rates start high due to a lack of driving and coverage history. Other life changes such as graduating college, getting married, or moving may significantly impact rates, so it’s a good idea to compare every six months or year.
  • An insurance company that has your back
    • Finally, choose a company with an “A” rating with A.M. Best rating if possible. An insurance company’s rating is based on its financial solvency. You’ll want to make sure the company you choose will live up to your expectations – and your contract – in the event you need to make a claim. If you’re deciding between one company and another and the prices aren’t drastically different, choose the one with a better rating.

4. What factors determine your rate?

Auto insurance is determined by a variety of factors including:

  • Where you live – not just your state, but your ZIP code, too
  • Who you are – your age, gender, marital status, whether you own your home or rent, whether and how you’re employed, your education history, your credit score, your insurance history
  • What you drive – car age, make and model
  • How you drive – your driving history, including past speeding tickets and at-fault collisions

Keep in mind that not all states allow insurance companies to use all of the above.

See how each rating factor impacts rates in your state here.

5. How can first-time drivers keep insurance rates low?

There are a few of things new drivers can do right off the bat to keep their rates low:

  • Shop around with as many insurance companies as you can (it’s free and only takes a few minutes) .
  • Stay on your parent or guardian’s policy as long as possible, and if/when you do decide to move to your own policy, set it up before removing yourself from your prior policy. A lapse in insurance coverage, even for a day or two, could result in the loss of a discount associated with maintaining continuous coverage.
  • Consider increasing your deductible for a lower monthly rate. If you’re carrying comprehensive and collision insurance, consider raising your deductible (but don’t go higher than $1,000 otherwise you could struggle to come up with the cash should you need to make a claim) and you should see a pretty significant price drop in your policy.
  • Drive safely! Rates are high for younger drivers because they are statistically involved in many more collisions than older drivers. Put your phone down, stay within speed limits, and obey all other traffic laws to keep yourself and others safe and to keep your insurance rates as low as possible for your age.

6. Should you bundle?

Often bundling auto insurance with renters or homeowners insurance can lower all of your rates. However, be aware that when you have a bundle, insurers may eventually charge you higher rates because they know customers will want to avoid the hassle of shopping around for multiple insurance policies, so remain vigilant. Get individual policy rates and bundled rates from multiple insurers and go with the best coverage for the best price.

What First-Time Auto Insurance Buyers Can Expect to Pay

The Zebra’s State of Auto Insurance Report compiled data from top insurance companies and averaged premium costs by age group. Teens pay more than double for car insurance than any other age group.

car insurance rates by age group

 

Note that the above rates are averages for the entire country and for a certain user profile. Here’s what these age groups pay in each state:

Car Insurance Rates by Age and State
StateAges 16-19Ages 20-29Ages 30-39Ages 40-49Ages 50-59Ages 60-69Ages 70-79Ages 80-85
Alabama$4,438$1,527$1,088$1,051$985$1,005$1,179$1,460
Alaska$4,027$1,651$1,207$1,157$1,058$1,117$1,352$1,623
Arizona$4,719$1,469$1,072$1,001$928$980$1,242$1,544
Arkansas$4,667$1,743$1,285$1,238$1,183$1,190$1,397$1,737
California$5,906$2,322$1,546$1,490$1,385$1,348$1,502$1,607
Colorado$5,630$1,854$1,372$1,276$1,188$1,220$1,484$1,875
Connecticut$7,920$2,403$1,600$1,525$1,467$1,559$1,991$2,456
Delaware$9,267$3,255$2,063$2,015$1,913$1,959$2,371$2,779
Washington DC$5,898$2,127$1,546$1,508$1,425$1,484$1,856$2,230
Florida$5,375$2,040$1,677$1,619$1,510$1,582$2,062$2,565
Georgia$4,124$1,669$1,194$1,131$1,032$1,087$1,377$1,735
Hawaii$1,355$1,151$1,149$1,149$1,149$1,149$1,149$1,149
Idaho$3,899$1,313$910$853$784$812$982$1,170
Illinois$4,032$1,419$986$953$889$901$1,080$1,331
Indiana$3,867$1,406$975$923$857$870$1,020$1,241
Iowa$3,473$1,450$962$918$820$828$942$1,111
Kansas$4,529$1,742$1,226$1,166$1,058$1,066$1,262$1,488
Kentucky$7,484$2,562$1,881$1,743$1,598$1,613$1,940$2,422
Louisiana$7,385$2,455$1,729$1,685$1,519$1,696$1,738$1,756
Maine$3,685$1,401$925$882$851$841$831$827
Maryland$4,998$2,091$1,476$1,425$1,290$1,386$1,430$1,430
Massachusetts$3,333$1,261$980$943$910$844$806$878
Michigan$6,678$2,715$2,085$2,033$1,906$1,909$2,142$2,437
Minnesota$4,572$1,729$1,208$1,139$1,046$1,103$1,314$1,618
Mississippi$6,056$2,123$1,599$1,472$1,403$1,425$1,680$2,095
Missouri$4,211$1,499$1,052$976$910$937$1,082$1,288
Montana$3,429$1,382$1,102$1,060$984$988$1,133$1,306
Nebraska$4,032$1,506$1,120$1,064$974$973$1,098$1,302
Nevada$5,663$1,774$1,284$1,256$1,163$1,213$1,531$1,886
New Hampshire$4,823$1,634$1,103$1,039$982$1,037$1,254$1,525
New Jersey$6,861$2,433$1,727$1,647$1,545$1,572$1,659$1,771
New Mexico$4,228$1,520$1,136$1,088$1,010$1,046$1,290$1,628
New York$5,757$1,976$1,460$1,416$1,378$1,424$1,604$1,812
North Carolina$1,860$842$812$802$790$797$827$841
North Dakota$5,016$2,003$1,369$1,310$1,226$1,236$1,429$1,615
Ohio$2,916$1,070$752$726$682$706$858$1,033
Oklahoma$7,731$2,722$1,954$1,779$1,657$1,671$1,988$2,475
Oregon$5,376$1,640$1,211$1,132$1,040$1,080$1,350$1,739
Pennsylvania$5,455$1,719$1,261$1,216$1,125$1,166$1,399$1,614
Rhode Island$8,382$2,444$1,645$1,588$1,536$1,773$1,938$1,968
South Carolina$4,259$1,684$1,249$1,213$1,140$1,178$1,446$1,742
South Dakota$4,091$1,704$1,190$1,137$1,000$996$1,126$1,267
Tennessee$5,071$1,536$1,123$1,031$970$984$1,261$1,656
Texas$6,268$2,377$1,764$1,709$1,577$1,638$2,015$2,526
Utah$4,278$1,399$999$967$889$913$1,105$1,347
Vermont$4,443$1,606$1,110$1,020$933$962$1,183$1,432
Virginia$3,466$1,377$982$946$864$897$1,135$1,385
Washington$5,024$1,627$1,154$1,114$1,046$1,081$1,322$1,678
West Virginia$4,721$1,968$1,426$1,344$1,256$1,285$1,539$1,835
Wisconsin$4,287$1,404$1,003$960$889$905$1,037$1,211
Wyoming$3,838$1,618$1,168$1,143$1,003$993$1,165$1,375

Good luck and happy driving! And if you have any additional insurance questions, you can always Ask an Agent!If you’re a first-time driver and you’re older than 20, you can expect to pay more than the average rate for your age range because you won’t qualify for discounts associated with a history of insurance coverage, but you won’t be subject to the same high rates teen drivers are.