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UPDATED: Mar 13, 2020
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Graduating from school, entering college, getting a job, and purchasing a used-but-reliable car of your own is a milestone in the life of younger drivers. If you have moved out of your parents’ home and are supporting yourself, you will need to purchase auto insurance.
Considering the situation, you are probably in the twenty to twenty-six year old age groups.
Insurance companies rate drivers by using statistical evidence and drivers between the ages of twenty to twenty-six statistically have more accidents with higher fatalities than older drivers.
This is not emphasized often by insurance companies since at present teen drivers have, by far, more accidents and fatalities just because they are inexperienced.
Use our FREE quote comparison tool above to start your search for car insurance today!
Purchasing Car Insurance for Young Drivers
Is a six month car insurance policy is available for persons within the twenty to twenty-six year old age group?
If your driving record is relatively clear, reflecting responsible use of driving privileges as a teen and a habit of obeying traffic laws, insurance companies will cheerfully sell you a six-month policy and, even-at an additional cost, allow you to make monthly payments to ease the stress on your budget.
Costs will be higher than that for older drivers, but they will be lower than the amount charged when you were a teen driver.
Getting the Best Price on Car Insurance
The most reliable method of getting reasonable premiums is to do comparison-shopping with several different insurance companies. Statistics are kept by every insurance company and they often have different rates within the same state.
The process of selecting an insurance company has the following steps:
- Ask relatives, co-workers, and friends about insurance companies and the way each handles the business of insurance
- Ask your parent’s insurance company if they would be willing to sell you insurance, using your previous experience as a basis for rating
- Consult with your state’s Department of Insurance about licensing and status of insurance companies.
- Ask for comparison quotes from at least three different insurance companies using your information.
Insurance is a highly specialized industry because rates are based upon individual experience, so carefully examining the information and coverage purchased can affect your premiums.
Specific Methods of Saving Money on Car Insurance
- Maintain a good driving record
- Be sure the information you give the insurance company is accurate
- Ask about discounts because these may vary from company to company
- Take advantage of multi-car and multi-policy credits
- Maintain a good credit rating
Research the Insurance You will need
Every state has legally required limits of liability necessary for obtaining a driver’s license or for registering the vehicle.
These limits vary from state to state and can be found upon the state’s insurance website.
Coverage recommended, but verify with your state’s laws:
- Bodily injury liability – example – $100,000 per person and $300,000 per accident to cover your legal responsibility for injury to others.
- Property damage liability – example – $50,000 per accident to cover your legal responsibility for damage to the property of others.
Be aware that the above coverage will also pay for legal expenses, rehabilitation costs, and hospital costs for those injured.
The property coverage will pay to restore the property of others to its original state if you are responsible.
The key to this is that the insurance policy will only respond up to the amount of the policy limits.
Physical Damage Coverage
To protect your own vehicle, you need to purchase this type of coverage:
- Comprehensive coverage – provides protection against animal damage, glass breakage, storm damage, hail damage, vandalism, and theft
- Collision coverage – provides protection for your vehicle if you run into another car or fixed object.
Comprehensive and collision coverage are subject to the deductible you choose in coordination with the lien-holder on your vehicle. A deductible of $500 is ordinary. This means that you pay the first $500 of any damage to your vehicle.
Some states require other coverage. These types of coverage are desirable even though your state may not require them:
- Medical payments coverage – $5,000 to $10,000 – to provide emergency medical costs for you and your family in an accident.
- Uninsured motorists coverage – $100,000 per person and $300,000 per accident for injury to you and your family if struck by an uninsured motorist.
This particular coverage may be provided by your medical insurance, but there is no guarantee since medical policies vary a great deal. Consider purchasing them as a protection.
Research the Insurance Companies Quoting Your Premiums
Insurance companies vary within states even though they are all subject to licensing and rating oversight by state insurance departments.
There are several places to go to examine the financial status, licensing, and volume of complaints about insurance companies:
- Individual state websites for Insurance Departments
- National Association of Insurance Commissioners (NAIC)
- A. M. Best Financial Ratings
- Standard and Poor’s Ratings
Financial status of an insurance company is most relevant when a disaster occurs such as a massive tornado loss, hurricane loss, or hailstorm.
Your insurance company should have the financial stability to withstand one of these losses without faltering in claims settlement and service.
Read the site’s criteria for ratings to be sure you understand it.
Volume of complaints can indicate the difficulty an insurance company usually has with handling claims and arguments about premiums. The complaints are investigated with regard to validity and settlement.
Ways to Save Money on Car Insurance
Some suggested methods of saving money on car insurance are as follows:
- Obtain quotations from different companies
- Multi-vehicle discounts
- Discounts for purchasing both renters insurance and car insurance with the same company
- Maintain a good credit rating – it counts in insurance, too
- Keep driving records clear
- Good student discounts for those 26 and under attending school
- Choose vehicles with a good repair history – try checking Consumer Reports
General Advice on Car Insurance
Keep the following in mind:
- Assess the quotations you have received to determine not only the premiums, but also the ratings of the insurance companies
- Read your policy as well as the quotations to evaluate coverage
- Be aware that the average customer in the United States pays $800 or more annually for car insurance – this is a relatively large purchase
- Ask for a six-month policy; it is available, you should be able to purchase it
Be sure to always compare quotes thoroughly before making any decisions. Use a FREE comparison tool, such as the one below, by entering your ZIP code to get started!