Insurance experts may tell you to buy as much insurance as you can afford, but that advice isn’t helpful for first-time drivers. While comparing car insurance quotes is the best way to know what coverage works best for you, you’ll need to know the basics first to make an informed decision.
How First-TIme Drivers Can Get the Most Out of Car Insurance
After teaching your teen how to drive, be sure to discuss the importance of comprehensive car insurance. One way to ensure adequate protection is to choose the right car insurance premium coverage for your car, which covers a wide range of potential risks. For first-time drivers, it’s essential to find the right policy that balances cost and coverage.
1. Liability Insurance is Mandatory in the US (Except for New Hampshire)
Basic (liability) car insurance is mandatory in every state except for New Hampshire (as long as you show proof of financial responsibility). Liability insurance covers the other driver’s vehicle repairs and medical bills but doesn’t cover your or your passenger’s expenses or injuries.
You can choose to upgrade your insurance in the following ways:
- Collision Insurance: Covers damage to your own vehicle after an accident.
- Comprehensive Insurance: Covers non-accident related damage, like vandalism.
- Personal Injury Protection: Covers medical expenses for you and your passengers.
- Uninsured Motorist Coverage: Covers medical bills and vehicle repairs if you’re hit by an uninsured motorist or a driver that’s too underinsured to pay for your expenses.
- Other Coverage Types: Motorists can also purchase situation-based coverage, such as gap, umbrella, usage-based, medical breakdown, and non-owner car insurance.
Emergency roadside assistance is another option that provides assistance if you lock yourself out of your car, run out of gas, or get a flat tire, which is useful for frequent road trippers.
2. Costs Vary Based on Policy, Company, Driving Record, and More
Liability insurance is the cheapest option, but you could be paying more than you need to. It’s essential to shop around for insurance before buying it, as costs vary based on your policy and insurer. Your location, age, car model, and credit score will also affect your auto insurance rates.
However, nothing affects your insurance costs more than your driving record. Traffic violations, insurance claims, and accidents will increase the number of points on your license. Even 2 points can increase your insurance premiums by 20% and move you closer to a suspension.
High-risk drivers are saddled with SR-22 insurance, which is often expensive. But, you can find affordable SR-22 car insurance quotes online through reputable brokers on comparison sites.
3. Insurers Only Cover The Car and Person in the Policy for a Limited Time
When signing up for car insurance, insurers will attach your name and your car’s model/license plate to your policy. That means you can’t drive another vehicle and expect to be covered for your expenses unless that car’s driver adds you as a secondary driver to their insurance.
Keep in mind that this concept works both ways. If a non-insured driver drives your vehicle and gets in an accident, your insurer won’t pay for the damages incurred by the driver. Not only will you pay out of pocket, but your insurer may deem you as high-risk and increase your premiums.
For this reason, rental car insurance is necessary if you wish to rent a vehicle. Like regular insurance, you have to check what rental insurance coverers and how much it’ll cost.
All car insurance, no matter the policy, only covers you for a limited time. If you let your policy expire, you’ll likely pay more when you buy car insurance. That’s because non-insured drivers are seen as risky. Always purchase more car insurance before your policy is canceled.