Car Insurance

The Beginner’s Guide to Car Insurance

Car Insurance

For people under 25, purchasing car insurance is one of the first lessons that teach us adulthood isn’t easy or cheap. Many young adults will discover the harsh reality of living as a grown-up and having to compensate for the risk their peers create.

A teenage driver with a brand-new license is deemed the riskiest to insure, so you shouldn’t be shocked to observe that car insurance for drivers under 25 is relatively high. This is because, statistically, more inexperienced drivers are involved in more accidents and bear a higher number of insurance claims.

Car insurance is mandatory whether you get full or third party with varying options. The insurance quote you get at age 21 will be significantly more expensive than the one you will receive when you turn 31. As you get older and obtain practice behind the wheel, insurance companies consider you to be less of a risk. Therefore, you can anticipate that your insurance premium will go down regularly until it starts to even out at the age of 30.

It should be noted that male drivers will pay more for their insurance than female drivers until the age of 21. They may find their premium to be at least $300 to $400 more than their female equivalents. According to studies this is because men tend to take on riskier driving habits and are involved in more dangerous car accidents than women. This is reflected in your monthly premium.

Ways to save on car insurance for drivers under 25

Although insurance premiums remain high for 21-year-old drivers, there are some ways to save on the monthly bill. Some primary areas to consider are:

  • Driver Training – Car insurance costs less if you take certified driver training
  • Defensive Driving Course – Completing a recognized defensive driving course can help you get a better rate as you have gained knowledge in advanced road rules, as well as tips and tricks to avoid accidents
  • Driving Record – A spotless driving record will have a positive impact on insurance rates as you get older
  • Online Comparison Quotes – Shop around for the best cover within your budget
  • Your Location – Insurance rates are more expensive in metropolitan areas than they are in rural, unpopulated regions

You can apply for further discounts if you have any of the following: –

Good student discount:

Many insurance companies grant discounts to students who can maintain consistent, good grades. If you’re attending college, this reduction may apply to you. Insurance companies view people of this age section as more reliable if they receive good grades. They will require evidence of your marks when renewing your policy, so make sure you have them ready to receive this discount. Each insurance provider varies in this regard, so you will need to ask the insurance company about this one.

Bundling policies discount:

At the age of 20, you may not hold homeowners insurance and life insurance, but you may have renter’s insurance. If you do, try to use the same company for all your insurance policies to get a bundling discount. 

Stay on your parent’s policy:

As you get older, you look to become more independent from your parents, so remaining on their insurance policy may not seem like a great option. However, doing so could save you a lot on your monthly premium. While their bill will be greater with you on it, they may get multi-car discounts, and it will be much less costly for you than having your own separate policy.

Car Insurance

Other factors that are likely to impact your insurance premiums:

The Reasons You Drive

The amount you drive can impact insurance rates. Infrequent driving as a hobby is going to be less expensive than using the car for commuting to work or school on a daily basis. The fewer miles you drive, the lower the rate will be. 

Your Personal Life

Married couples usually pay less for insurance than single people. Additionally, having a child can positively influence coverage rates. Car insurance companies anticipate a more careful approach to driving and aversion to risk in new parents.

Car Type and Insurance Rate

The type and model of car you drive gives your insurance company a definitive indicator of the way a person intends to drive. For example, buying a white 2013 Fiat 500 Pop with a 4 cylinder, 1.2 liter engine will cost far less to insure than a bright red 2013 BMW Series 4 with a powerful 6 cylinder, 3.0 liter turbo with a rear spoiler and dark tinted windows. These are the items that Insurance companies will look at most:

  • Horsepower of the car
  • Crash history of the make and model
  • Theft history of the make and model
  • Vehicle weight
  • Historical repair expenses for the make and model
  • Modifications and lowering of the car
  • Color of the car

Understanding GAP Car Insurance:

GAP (Guaranteed Asset Protection) insurance is elective coverage. To understand GAP Car Insurance, you first need to know whether your car is covered for the exact cash value or decreased value in the event of a claim. GAP insurance is the type of car insurance coverage that gives supplemental cover for the distinction within the actual cash value (ACV) of your vehicle and the amount you owe your bank or leasing company at the time of your claim. GAP will equip you with adequate money to meet the difference between what is owed for the vehicle, and what the insurer gives out in the event of a mishap or loss.

Common car insurance exclusions

It’s not uncommon for the list of standard exclusions to occupy a few pages of your car insurance documentation. While the plan may appear a little overwhelming in the beginning, several of these car insurance exclusions are merely common sense. If you’re a reliable and responsible road user, many of them won’t ever create any problems for you.

  1. Driving while under the influence of alcohol or drugs
  2. Driving a car that isn’t roadworthy
  3. Make any unauthorized changes to your car without telling your insurer 
  4. Unlicensed drivers or unregistered vehicles
  5. Driving your car while it is overloaded
  6. Mechanical or electrical breakdowns and damaged tires
  7. Legal confiscation or repossession of your car
  8. Motorsports or reckless acts
  9. Hiring out your car
  10. Not paying your premiums

One of the best means to save on your car insurance is to shop around. Every insurance provider has their method of determining the rate they will charge you. With quotes from numerous companies, you can guarantee you’re receiving the best price and the best cover.

Comments are closed.