Buying car insurance can prove to be overwhelming for a first-time car owner. Whether you were previously using your parent’s policy or are acquiring one for the very first time, the process of buying insurance for a young driver brings a unique set of challenges.
Challenges for Young Drivers
Before purchasing their own auto insurance, most young drivers obtain car insurance through their parents. They are either added to the family policy or handed a separate joint policy. A separate joint policy may cover the entirety of a teenager’s high school and college years. This experience will make it easier to buy first-time car insurance in the future. The bigger challenge is posed to those who do not learn to drive as teenagers and decided to learn later in life.
The cost of purchasing car insurance for first-time car owners may be higher. This is especially true if the purchaser does not conduct the research on the best policy. The increase in costs is because there are numerous risk factors associated with both teenage drivers and older first-time drivers. The older first-time drivers have no experience and will pay more premiums during the initial years of their policy. Additionally, because they have never had an insurance policy so they will be charged higher rates. Many insurance companies consider new drivers higher risk customers due to their lack of experience.
However, the good news is that it does not take too long for a person’s insurance premiums to decrease after the initial term ends. This term is supposed to prove that you are a responsible and safe driver. After that, the insurance company will assign you to an appropriate category of risk and your rates will be accordingly adjusted.
Not Understanding Your Policy
Many people face challenges when purchasing their first-time car insurance because they don’t understand terms of the policy. Before settling for any insurance company, it is important to view several companies online. This will allow you to compare different companies, which will help you to choose a cheaper alternative. Furthermore, you should find out the service quality, type of products and the protection given.
One common tactic that insurance companies do to take advantage of clients who are oblivious of the policies is sneaking in extra coverage, which you do not require. Therefore, it is important to review everything the company offers. The first thing you should look at is the deductible- the money paid when making a claim. Generally, lower deductibles lead to higher monthly premiums.
Auto insurance quotes for first-time drivers are too high. Many people do not know that this is contributed by several factors such as the type of car they drive. Fast, spotty cars in lustrous colors will result to skyrocketing insurance fees for any driver, and especially a first-time driver. Driving an older car that has a more muted paint will keep the young driver safer and as well save some money for them.
Lack of Credit History
Additional challenges that people face when buying auto insurance for the first time are that they do not have a credit record. Many insurance companies claim that those with bad or no credit history usually file more claims. Again, first-time insurance buyers lose many discounts that would have been available in a few years. This is because they are neither homeowners, married nor college graduates yet. Apparently, this will drive a few costs to the roof. Again, as a first timer, it is likely that you are losing the multi-car discount. The cost of adding you and your car to a parent’s policy is most likely offset somewhat by a discount of ten to twenty-five percent for insuring more than one car. The situation would have been better if you were graduating off a parent policy.
You can avoid these challenges by shopping for the right insurance providers who will help you with the process. As an independent agency, Grindell & Romero Insurance is dedicated to helping our customers navigate the challenges of first-time car insurance buying experience. Whether you need coverage right now or need advice on how to best prepare for that time, do not hesitate to reach out, and we will do our best to help.