Everything You Need to Know

Buying first-time car insurance can be overwhelming. Determining a good rate is not easy, especially if you haven’t purchased auto insurance in the past. Understanding what factors go into insurance rates and how you can qualify for discounts can help you get the best rate.

Buying First-Time Car Insurance

First-time drivers tend to pay the highest insurance rate. Knowing what to look for when cutting costs can be helpful. You’ll need information about your vehicle to obtain quotes. If you are a teen or first-time driver, you can expect to pay a higher rate for car insurance, regardless of your age.

According to Forbes, first-time drivers tend to pay more for car insurance for the following reasons:

• Increased risk of filing a claim: Younger drivers have less experience driving and are more likely to file claims due to being involved in vehicle accidents.
• Minimal credit history: Your credit score can also affect your insurance rate. Younger drivers are less likely to have established credit, which can also lead to higher rates.
• Inability to qualify for discounts: Many younger drivers don’t qualify for the discount programs available to other drivers. These programs may require the driver to own multiple vehicles or a house, or be married or recently graduated from college.
• Inability to combine policies: Once a young driver separates from his or her parent’s policy, both individuals may lose multivehicle discounts.

Some auto insurance companies may deny drivers of a certain age any coverage at all. However, obtaining quotes from multiple insurance providers can help you find an insurance company that will cover you and offer you a good rate.

How to Get the Best Rates for First-Time Car Insurance

Since first-time drivers lose out on many of the available discounts, including multivehicle discounts, you may want to join an existing policy rather than getting your own. Many factors affect your rates as a first-time policyholder, including the following:

• Your location.
• Your demographics, including age and gender.
• Credit score.
• Driving history.

Your driving history and experience are some of the most important factors when determining your insurance rate. Drivers with more experience on the road will usually pay lower rates than drivers with minimal experience. That’s because beginner drivers are more likely to get into an accident and file a claim.

Shopping around is the best way to get the most affordable insurance rates as a first-time driver or policyholder. Aim to get quotes from multiple providers to determine which one will offer you the best rates. You might also decide to talk with an insurance representative who may be able to gather multiple quotes for you.

You can improve certain factors leading to an increased insurance rate. While you can’t change your age, you can improve your driving record or credit score.

You can also meet with insurance agents in person if you prefer. Additionally, many insurance providers have apps that allow you to communicate with an agent online. In some cases, you may be able to ask your insurance agent if you’re eligible for available discounts. Some discounts, including multivehicle discounts, can save you as much as 25 percent on your policy. You may also qualify for discounts if you have certain safety devices or features on your vehicle.

Determine How Much Coverage You Need as a First-Time Policyholder

Consider how much insurance you need. Paying for more insurance than what you need can lead to higher rates. You want to have at least the state’s minimum, which will vary based on your state. Additional insurance add-ons may include:

• Collision: Collision coverage includes damages due to any cause, including if you are at fault or if you strike an object.
• Comprehensive: Comprehensive coverage includes damage that’s not from a car accident. This damage might include bad weather or theft.

Some states may also require uninsured or underinsured coverage, which protects you if you are in an accident with a driver who does not have sufficient insurance coverage.

To determine your coverage needs, calculate your net worth. Add together your assets and subtract your debts. If your net worth is less than the minimum insurance requirements in your state, then you may decide to go with the cheapest policy, often referred to as liability coverage. Property damage liability is also usually required in each state.

Continue evaluating your coverage needs. This point is beneficial when your life circumstances change, such as getting married, having children, improving your credit score, or buying a house or another vehicle.

Collision and comprehensive coverage may or may not be required, depending on the vehicle you drive. If you buy a new vehicle or lease one, you may be required to have full-coverage insurance.

How to Buy Car Insurance for the First Time

Take the following steps when buying car insurance for the first time:

1. Gather all important documents: Assemble important documents you will need to take out an insurance policy. According to ValuePenguin, these documents include your driver’s license, vehicle registration, vehicle identification number (VIN), vehicle title, and your vehicle’s mileage reading.
2. Gather a few quotes: The best way to choose the right policy is to compare a few price quotes among different insurance providers. You can gather quotes by completing an application online or talking with an insurance representative by phone. When filling out quotes, you will need to include personal information, such as your driver’s license number, birth date, occupation, address, marital status, and education level. You may also need to include your previous driving record.
3. Review the contract: Before signing the agreement, make sure you know what you are buying and what items are eligible for coverage.
4. Ask about available discounts: Even if you don’t qualify for traditional discounts, others could help you reduce your premium. Some insurance providers allow you to pay in full and receive discounts.

You’re not required to proceed with an insurance provider just because you request a quote. Do some research to find the best rate possible.

When buying auto insurance for the first time, you want to make sure you have enough coverage while also securing a good rate. Consider your needs ahead of time and choose an insurance policy that fits your needs and budget.

Sources:

https://www.forbes.com/advisor/car-insurance/tips-first-time-car-insurance-buyers/

https://www.valuepenguin.com/first-time-car-insurance

https://www.caranddriver.com/car-insurance/a35600382/cheapest-way-to-get-car-insurance/

https://www.caranddriver.com/car-insurance/a35600766/discount-on-auto-insurance/

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