WHY IS CAR INSURANCE SO EXPENSIVE FOR FIRST TIME DRIVERS?
There are a lot of responsibilities you have to take when you enter adulthood. You’re slowly starting to do things on your own: pay your own bills, find your own place, get your own car. And having your own car means paying for your own car insurance.
If you started to drive on a young age, you are most likely aware that car insurance is crazy expensive for first time drivers. But why is car insurance more expensive for first time drivers?
Higher insurance premium doesn’t represent your ability as a driver, it simply boils down to risk. Insurance companies are designed to minimize risks, and car insurance companies see young, inexperienced drivers as big risks, and the bigger the risk, the more you pay. Inexperience in road hazards, and being young and careless means they are most likely to take risks. According to research, there is a 1 in 5 risk of crashing during the first six months of a driver on the road.
Insurance companies take your credit history as a factor in your insurance premium. They believe that insurance holders with a bad or no credit history tend to file more claims. First-time, young adult drivers, you don’t have a lot of credit history to back you up, and this is one reason for your insurance premium to go up.
Being a first time driver steals away a lot of big discounts that an experienced driver can get. Discounts such as the accident-free discount which is based on a driver’s driving history won’t apply to first time drivers. Other customer loyalty discounts from early policy renewal, multi-policy and multi-car discounts can’t be applied if you’re only on your first car insurance policy.
There are other discounts offered for first time drivers but these are the most common discounts that almost all car insurance companies offer.
Believe it or not , age can be a factor for a first time driver to pay more for insurance. You haven’t graduated college yet, not yet married, and not yet a homeowner. Some discounts require a certain age for you to qualify, even your marital status is a factor, because married drivers often pay lower premiums.
A number of other reasons can affect a first time driver to pay more for insurance such as, your vehicle’s make and model, older models often get lower rates than newer, flashier ones that young drivers tend to get. Your car insurance history which you don’t have yet if it’s your first time getting a car insurance. How often you use you your car is also a factor. Your job could also be a factor, if you use your car as a part of your work, which requires you do to a lot of driving, you are more likely to be a risk for an insurer. And sometimes, some insurance companies doesn’t want to insure drivers under 25, though many others will.