New driver car insurance: What to consider when buying your first car insurance policy

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Written by
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Reviewed by
Farmers CSR for 4 Years
UPDATED: 2022-09-01T05:04:06.196Z
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new driver showing his driver's license

Driving is an exciting time for new drivers. Getting your driver’s license is a monumental milestone for teens, and the freedom of the open road is something many look forward to. But one thing that can’t be overlooked for new drivers is car insurance.

In order to be a legal driver on the road, all drivers must purchase an auto insurance policy. And unfortunately for new drivers, car insurance will likely be expensive. Insurance companies consider a driver’s risk profile when pricing the car insurance policy, and because new drivers don’t have any experience, he or she is considered a high risk. While new drivers may pay more than others for car insurance, there are some ways to keep your premium reasonable.

Who is a new driver?

Teen drivers who just got their driver’s license are the most common new drivers, but other people may also be considered a new driver. Any person who doesn't have an insurance record and/or driving experience is considered a new driver. This includes newly licensed teenagers, individuals who got their licenses later in life, or foreign drivers new to the country.

A new teen driver can save on his or her car insurance by staying on his or her parent’s car insurance policy, which will lower the new driver’s insurance rates.

Best car insurance for new drivers

To find the best car insurance for new drivers, you can see who other drivers have rated as the top auto insurance companies. If the new driver is still in school (high school or college), you can filter the best car insurance rankings by companies that offer a good student discount. Typically, if the student has a ‘B’ average or better, they may qualify for a good student discount and save on their auto insurance rates.

If the new driver is going to be joining their parents’ car insurance policy, it’s highly recommended that the family shops around. Adding a new driver to an auto insurance policy will likely significantly change the rates for the family, and it’s a great time to see if you can get better car insurance prices for a company that’s also rated as one of the best by other drivers.

Cheapest car insurance for new drivers

When shopping for cheap car insurance rates for a new driver, it’s important to understand that the price each driver pays for auto insurance will vary based on their unique profile aspects. For instance, an 18-year-old male driver in Boston is likely to pay more than an 18-year-old female driver in Wyoming.

Nonetheless, as you're shopping for car insurance, it can be helpful to see average rates from different companies. In the table below, you can see the average car insurance rates for teen drivers from the 10 largest car insurance companies in the country. Interested in rates for your area? Visit the car insurance rankings and filter by your zip code.

Geico offers the cheapest car insurance for new drivers, on average, based on the profile used. However, for those who qualify for USAA, a military only insurance company, USAA is the cheapest car insurance for new drivers.

CompanyMale teen ratesFemale teen rates
Allstate $2,137 $1,889
American Family $2,057 $1,701
Farmers Insurance $3,513 $3,285
Geico $1,492 $1,460
Liberty Mutual $3,199 $2,625
Nationwide $2,402 $2,028
Progressive $2,953 $2,706
State Farm $1,967 $1,721
Travelers $2,879 $2,340
USAA $1,092 $1,023

The driver profile used for this data was an 18-year-old with the minimum car insurance coverages in each state. The driver had fair credit and the car used to determine the rates was a 2015 Honda Civic EX. The driver didn’t have any accidents or violations in their driving history. Rate data is provided by Quadrant Information Services.

Why does new driver car insurance cost so much?

Insurance companies evaluate and assess the risk of an individual to determine first if they even want to insure them and second how much they need to pay for their risk level. Because new drivers have no experience on the road, they’re considered riskier to insure than older drivers with more experience. This is due to insurers' assessment of driving behaviors and the age tax, which charges drivers more or less depending on their age.

Sure, not all new drivers are bad drivers, but the statistics show the risk level of young drivers, and it helps explain why new driver car insurance costs so much. Teen drivers have accident rates nearly four times higher than drivers aged 20 or older per mile driven, according to the Insurance Institute for Highway Safety.

In addition to your risk profile, there are many other factors that affect the car insurance rates of drivers. Some of them are:

  • Your age, gender, and marital status. Teenagers and single drivers tend to have more accidents, and therefore, pay a high premium.
  • Type of vehicle: If the car is new and expensive, the premium is higher.
  • Where you live: Drivers who frequently drive in cities are more prone to accidents. Car insurance rates also differ by state.
  • Car insurance coverage: What coverages you have on your policy, the limits you select and your deductibles all impact your insurance rates.

Understand the coverage when buying car insurance

There are six different types of car insurance coverage options on a typical policy. Understanding what they cover and which ones are required in selecting your coverage is important.

  • Bodily injury liability: It pays for injuries to the other person(s) in an accident caused by you. The coverage includes two limits, one that:
    • applies to each injured person
    • applies to each accident
  • Property damage liability: It pays for damages caused to someone else’s property when you are at fault in an accident.
  • Personal injury protection/medical payments: It pays for the treatment of injuries to yourself as the policyholder and the passengers in your car.
  • Collision insurance: It pays for the damage to your car due to collision with another car, an object, or even rollover accidents, irrespective of who is at fault.
  • Comprehensive insurance: It pays for loss due to theft, fires, falling objects, earthquakes, hitting an animal and more; any damage that is not caused by collision with another car or object.
  • Uninsured motorist or underinsured motorist coverage: Both insurance coverages pay you if you’re the victim of a hit-and-run accident, hit by an uninsured driver or hit by a driver that doesn’t have sufficient coverage limits.

How much car insurance will you need?

Determining your coverage needs and limits is important. If you’re a new driver purchasing car insurance for the first time, it may be a good idea to talk with an insurance agent to make sure you have sufficient coverage. There are some helpful online resources that can help you determine your coverage needs, such as this coverage calculator.

When considering how much insurance you need, some things to think about are:

  • How much are your assets worth?
  • Do you have dependents?
  • How much do you owe and own?
  • What is the out-of-pocket cost you can bear?

Of course, at the very least, you’ll need to ensure you meet your state’s minimum coverage requirements. To see the minimum coverage needed, filter by your zip code on the car insurance rankings page and scroll down to the minimum coverage section.

The content on this site is offered only as a public service to the web community and does not constitute solicitation or provision of legal advice. This site should not be used as a substitute for obtaining legal advice from an insurance company or an attorney licensed or authorized to practice in your jurisdiction. You should always consult a suitably qualified attorney regarding any specific legal problem or matter. The comments and opinions expressed on this site are of the individual author and may not reflect the opinions of the insurance company or any individual attorney.

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