Tips on Buying Car Insurance for the First Time

A foundational understanding of key terms like premiums, deductibles and coverages equips you to make an informed and cost-effective decision. Ensure that your chosen policy meets your individual needs and aligns with your state's minimum car insurance requirements.

While an exclusive or independent agent can offer personalized guidance to find the best policy match, visiting a company's website can provide quick — albeit potentially less precise — quotes.

Car insurance for first-time drivers is generally more expensive because of their lack of experience on the road, but stacking discounts can help lower costs.

• How to Get Car Insurance for the First Time
• When to Shop for Car Insurance for First-Time Buyers
• How Much Is Insurance for a First Time Driver?
• FAQs

Your insurance needs depend on your car's value as well as who drives it and where. Keep legal requirements in mind, especially for out-of-state trips. When looking for insurance, get several quotes from agents or online, and ask about discounts and policy specifics to get the best deal.

Reflect on factors like your vehicle's make and model, your driving frequency and your location to inform your decision.

Here's a closer look at what to consider:

Your Car's Make and Model Your vehicle's make, model, age and value can significantly influence the cost and type of coverage you might need. Typically, newer luxury cars might have higher premiums, while older models might cost less to insure. Some makes and models are more prone to theft or have higher repair costs, influencing the insurance rate.

Your Driving Frequency How often you hit the road matters. If you're a daily commuter covering many miles, you might require more comprehensive coverage. In contrast, an occasional driver might opt for a more basic plan that only includes liability-only coverage.

Risk Level of Your Area Your area's risk of accidents, vehicle thefts or natural disasters can impact the type of coverage you might want to consider. For instance, if you reside in an area prone to floods or hail, getting comprehensive coverage may help pay for weather-related damage.

Interstate Driving Planning on road trips or have work that takes you across state lines? Each state has its own insurance requirements, and your policy is based on the regulations in the state where your car is registered. You're not legally obligated to change your policy if you drive in other states, but if you're frequently driving in another state, you may want to ensure your coverage aligns with any additional risks you might encounter.

Car insurance isn't a one-size-fits-all solution. It's a personalized protective measure molded by your unique lifestyle, needs and circumstances. After figuring out how much insurance you need, find out how much your state requires you to have.

It's important to understand the basics of car insurance before purchasing a policy. This foundational knowledge ensures you select the right coverages, avoid overpaying and safeguard your financial wellbeing. By grasping key terms and how they impact your protection, you can make informed decisions that align with your driving habits and personal circumstances.

In addition to the policyholder, a car insurance policy may also cover other drivers who drive the owner’s car with permission under the provision of permissive use. In contrast, excluded drivers, even with the permission of the owner, will not be covered by the policyholder’s insurance.

Knowing who is and isn't covered under your car insurance policy can prevent unexpected surprises and financial pitfalls. It's all about tailoring your coverage to your specific needs and understanding how each driver category affects your protection. Always read the fine print and ask questions if you need any clarifications.

When buying car insurance for the first time, you will need to find out what type of car insurance coverage you need. You will come across two different categories of coverages: state minimum car insurance requirements and optional coverages.

Only two out of 50 states and Washington, D.C. do not require drivers to carry liability car insurance. Also, not all states mandate drivers to carry uninsured motorist coverage, personal injury protection or medical payments coverage. For example, drivers in Maine and Pennsylvania need to have medical payments coverage, while states like North Carolina and Connecticut mandate uninsured/underinsured motorist coverage.

Make sure to check with your state and insurance agent to get the right kind of coverage. In most states, you need to present proof of insurance when you register your car with the DMV. The DMV agent, should your state require insurance coverage before car registration, will also make sure you have adequate coverage that satisfies state regulations.

Even if you’re not legally required to carry certain coverage, like uninsured motorist coverage, you should consider stacking it in your policy. If you live in a state where many drivers don’t carry enough insurance, your policy may be able to help you pay for your medical bills if you get into an accident with an uninsured or underinsured driver.

Car insurance providers also offer other optional coverage beyond those mandated by the state.

While these coverages are optional, they can add layers of financial protection and peace of mind, depending on your individual circumstances and the potential risks you might face. Always assess your situation and consult with insurance professionals when determining which coverages are right for you.

To speed up the process — and possibly get insurance on the same day you begin shopping — prepare all important documents and information car insurance companies will need.

Insurance providers will likely ask for details on listed drivers, including their:

• Full legal name
• Date of birth (to verify age)
• Gender
• Social Security number
• Current address
• Occupation or status (e.g., student, employed, unemployed)
• Marital status

Keep important documents handy, like:

• A valid driver's license (with the license number and issue date)
• Details about the vehicle to be insured (make, model, year, Vehicle Identification Number)
• Information about the vehicle's primary use (e.g., commuting to school or work, leisure)
• If applicable, details about driver's education or training courses completed
• Driving history or record, if any (including any past accidents or violations)
• Details of any previous car insurance policies, if applicable, especially any proof of no claims bonuses

Whether you're a new driver or someone with a bit more experience behind the wheel, remember that insurers are looking to gauge risk. By providing accurate information and understanding what's needed, you're on the right path to getting a policy that suits your unique needs.

When shopping for car insurance, it's important to do your research and compare quotes from multiple companies in order to get the best deal.

Here are some tips for how to shop for car insurance as a first-time driver:

• Collect at least three quotes from different companies. This will give you a good idea of the range of prices available.
• Consider using a car insurance estimate calculator. These can make it easy to compare quotes from multiple companies at once.
• Be sure to compare quotes for the same coverage levels to ensure that you're comparing apples to apples.
• Ask about car insurance discounts. Many car insurance companies offer discounts for things like good student status, anti-theft devices and safe driving habits.

Consider working with an insurance agent. An agent can help you understand your options and find the best policy for your needs.

There are three main ways to shop for car insurance: through an exclusive (or captive) agent, an independent agent or the insurance provider’s website. An exclusive agent works for a specific insurance company, while an independent agent represents multiple companies. A few clicks on the company website can get you an instant — albeit inaccurate — quote.

Exclusive agents typically have more knowledge about the products of their own company, but they may not be able to offer as many options.

Independent agents can provide more choices and quotes for you to choose from.

Many car insurance companies offer instant quotes on their websites. This is a convenient way to get an idea of your rates without having to talk to an agent. However, it's important to note that these quotes likely will not be as accurate as quotes from an exclusive agent or independent agent.

Ultimately, the best way to shop for car insurance is the way that works best for you. If you're comfortable doing your own research, then you may be able to save money by going directly to the company website. But if you want more personalized service, then an insurance agent may be a better option.

Car insurance discounts can significantly reduce your premiums, and it's always a wise move to be aware of them. Here's a list of some of the most common discounts in the industry:

Car insurance is generally more expensive for first-time drivers, so knowing how to stack discounts can help you pay less for the most coverage.

Each insurance provider may have variations on these discounts or offer additional ones not listed here. Always inquire with your chosen provider or your insurance agent to ensure you're maximizing potential savings.

Ensure you have a temporary or permanent proof of insurance card or document. This is mandatory to have when driving. Many companies also provide digital proof of insurance. Still, always keep a physical copy in your car, especially if your state requires it.

Keep it in your glove box or above the driver’s seat — it’s a good idea to have it within arm’s reach as local law enforcement may ask to see proof of insurance at any time.

Car insurance for teen drivers is generally more expensive than car insurance for older first-time buyers. Teenagers, especially those in the 16-19 age range, are statistically more likely to be involved in accidents than older drivers. Insurance premiums are based on risk assessments, and younger drivers are often deemed higher risk due to their inexperience on the road and the higher accident rates associated with their age group.

While older first-time buyers may pay more than seasoned drivers, their rates are generally lower than teens'. Rates can also vary based on driving records, vehicle types, location and other factors.

Based on MoneyGeek's comprehensive analysis, which evaluated claims processing, coverage options, customer satisfaction, financial stability and affordability, USAA, Travelers and Progressive emerge as top picks for people buying car insurance for the first time.

USAA stands out as the premier choice for current and former U.S. military members and their families, offering a blend of exceptional service and value. If you're not eligible for USAA, Nationwide is a strong alternative and stands out for its blend of comprehensive coverage and unique benefits. With its strong industry reputation, it's a favored choice for drivers seeking dependable protection and personalized service on their journeys. Travelers, on the other hand, provides drivers with robust coverage and tailored options. Its long-standing reputation and dedicated support make it a top choice for people prioritizing reliability and personalization on the road.

All three providers are committed to delivering quality car insurance and prioritize customer care, striking a balance between reliability and affordability. For those venturing into the car insurance market for the first time, these providers offer a trustworthy and financially savvy starting point.

If you're purchasing car insurance for the first time, you might notice that rates seem particularly steep. Here are some of the reasons why:

• Experience. Car insurance is, at its heart, all about assessing risk. First-time drivers, regardless of age, lack the on-road experience that longer-term drivers have. In the eyes of insurers, less experience can translate to a higher likelihood of causing accidents and thus, a higher risk of claims.
• Lack of a Track Record. Seasoned drivers have a driving record that insurance companies can scrutinize — whether they've had accidents, made previous claims or garnered any traffic violations. First-time drivers, however, present an unknown risk, leading insurers to err on the side of caution with higher rates.
• Age Factor. Many first-time drivers are young, often in their teens. Statistically, younger drivers tend to be involved in more accidents than older age groups. Insurers set premiums based on these statistics, and unfortunately for younger drivers, this can lead to steeper rates.
• Premium Discounts. Longer-term drivers may have had the chance to earn various discounts that can lower their premium, such as a no-claims bonus or multi-policy discounts. First-time drivers haven't had the opportunity yet to avail of these.
• Vehicle Type. First-time drivers, excited by the prospect of their first car, might choose a model that's more expensive to insure. Sportier cars or brand-new models can increase premiums.

Car insurance is a balance of probabilities. Until you've built up a history of safe driving, insurers default to viewing you as a higher risk. The good news? As you gain experience and maintain a clean driving record, your premiums will generally decrease over time.

Always shop around, take advantage of any applicable discounts and consider courses like defensive driving to possibly reduce your initial rates. As you drive more, you'll be paving the way to more affordable coverage in the future.

Below, we answered some of the most frequently asked questions about tips for buying car insurance for first-time buyers.