What You Need to Know When Buying Car Insurance for the First Time

Adulting comes as a surprise to everyone at some point. Congratulations and welcome to the club if you have recently purchased your first car! It is now time to deal with all of the tedious aspects of driving your new car, such as purchasing car insurance for the first time. Car insurance for the first time is as exciting as going to the dentist, but it is required to protect yourself financially. Don't be concerned if you're feeling overwhelmed or perplexed about how it all works. We break it down for you, especially the cost of first-time driver insurance.

How do I get car insurance for the first time?

The first step in obtaining car insurance for the first time is determining how much car insurance coverage you need. Each state has its own set of requirements. Most insurance companies will know how much coverage you require based on where you live. The requirements are commonly referred to as 25/50/10 liability insurance. This means you'll need liability insurance in the event you're at fault in an accident. The 25/50/10 is an abbreviation for:

If you are at fault in a crash, you must have $25,000 in bodily injury coverage to cover each person's medical bills/injuries.
Per accident, $50,000 in bodily injury coverage is provided. This means that your insurance will only cover up to $50,000 in medical bills for others injured in an accident caused by you.
$10,000 in property damage to cover the costs of repairing and replacing cars, fences, poles, and any other property you hit and damage.

You can drive legally with the state's liability minimums, but you may want to purchase more. Consider the state's requirements to be the no-frills version of auto insurance. The issue is that liability insurance only covers other people, or third parties. If your car was damaged or you were injured, your minimum liability insurance would not cover you; you would have to pay for these expenses yourself.

Furthermore, if you cause a more serious crash, a state's liability minimums are usually insufficient. Consider this: if you rear-end a new Tesla, do you believe a state's $10,000 property minimum coverage will be enough to repair the Tesla you hit? If the bill for the repair exceeds $10,000, your insurance will only pay up to that amount, leaving you to pay the remainder out of pocket.

It is best to shop around for car insurance by obtaining several online quotes in order to find the best deal. When you do, aim for 100/300/100 liability coverage. This should cover you in the event of an accident involving newer, more expensive vehicles and injuries. Aside from shopping around for liability insurance with higher minimums, think about including the following optional coverages:

Comprehensive insurance

As previously stated, liability insurance only covers the damages caused by others. Comprehensive insurance will pay for the repair or replacement of your vehicle if it is stolen, vandalized, lost in a fire, or damaged by a falling tree limb or bad weather events like hail and flooding. It also protects you if you hit a deer or other animal while driving.

Collision insurance

Add collision coverage to your policy to be reimbursed for repairs if your car is damaged as a result of an accident you caused. Drivers typically purchase comprehensive and collision coverage in addition to the mandatory liability insurance. Comprehensive and collision car insurance combine their powers as the wonder twins of full car insurance. You'll be covered for any harm you cause to others or yourself.

Gap insurance

You're probably aware that the moment you drove your sweet ride away from the new car dealer, you lost money. However, if your car was totaled in a serious accident shortly after you purchased it, the problems begin.

Your car insurance company will issue you a replacement check for your lost vehicle based on its current market value, not what you paid for it, which is likely less than what you owe on the car loan. That is, if the $40,000 car on which you are making payments is destroyed, it may only be worth $32,000 months later due to depreciation. Your insurance company paid you $32,000 to go buy a new car, but once you hand that check over to the finance company, you still owe them an additional $8,000. Gap insurance covers the difference between what you owe and the value of your car at the time it was totaled. And the coverage is far less expensive than the potential shortfall.

Do first-time insurance customers pay more?

The fact that you are purchasing car insurance for the first time does not imply that it will be more expensive. Your rate is determined by your age, driving record, where you live, and a few other factors. Younger drivers pay more for car insurance, according to the Insurance Information Institute. If you are between the ages of 16 and 25, you should expect to pay a little more for car insurance.

The number of fatal accidents is linked to the price of first-time insurance for young adults. Drivers between the ages of 16 and 24 account for 66.5 percent of all fatal car accidents. Young adults are at a higher risk of causing a serious crash due to a lack of driving experience, increased risk-taking, texting, and drinking. As a result, drivers under the age of 25 are more expensive to insure.

Where to find cheap car insurance for first-time drivers

If the cost of first-time insurance is a deciding factor in whether you can afford your first car, follow these tips to find cheap car insurance for first-time drivers.

Choose a more affordable car

Some vehicles are less expensive to insure than others. A Honda, for example, will cost less in car insurance than a Tesla or a sports car. Before you buy a car, do some research on insurance costs.

Stay on your parent’s car insurance

If a parent can add you to their existing auto insurance policy, you may be able to get a better deal on your car insurance. They may have loyalty discounts and a long-standing relationship with an insurance carrier, and adding your vehicle to their policy may be less expensive than purchasing insurance for the first time.

Shop around for quotes

Getting online quotes from a few car insurance companies is the best and easiest way to find the best cheap car insurance for first-time drivers. You'd be surprised how much your car insurance can vary in price from one carrier to the next for the same coverage.

The majority of insurance companies make it simple to obtain a quote. You'll need an address, information about your car (make, model, and year), and the type of car insurance coverage you want. Obtaining a quote is completely free and without obligation. In just a few minutes, you'll have an estimate to compare.

Take advantage of car insurance discounts

Most car insurance companies offer discounts to new customers for a variety of reasons. The best part is that you can use more than one discount at the same time. Among those to consider are:

Bundled coverage: If you insure your car and your home or apartment with the same company, you can save money on both.
Good student: If you are currently enrolled in school, you may be eligible for a discount on your car insurance while you are studying.
Military: Most insurance companies provide an automatic discount to enlisted personnel.
Telematics: Enroll in an insurance company's driver tracking program and you could save up to 25% on your car insurance premiums based on your driving habits. You'll need to download an app that tracks your mileage, speed, and other factors to determine how safe you are as a driver and the size of your discount.
Defensive driving courses: Most carriers will give you a 10% or higher discount if you complete an online defensive driving course. The courses are typically completed over the course of a weekend and can result in savings of up to three years.

How to buy your first car insurance policy

Are you ready to purchase your first car insurance policy? To ensure that you get it right, follow these steps.

Obtain several online quotes: To find the best deal, obtain quotes from a few carriers and select the one you like best.
Round up information: You'll need your vehicle's Vehicle Identification Number (VIN), which can be found on your title or on the lower dashboard on the driver's side when looking from the outside. In addition to the VIN, have your vehicle's mileage, driver's license, contact information, and home address on hand. Keep your bank account information on hand in order to set up automatic payments, as well as a debit or credit card on hand to pay your first premium.
Select your policy: Enter information about the policy you're purchasing, such as liability insurance, dollar limits, and add-ons like gap, comprehensive and collision coverage.
Choose a deductible amount: The deductible is the amount you will pay out of pocket in the event of an accident or claim before the insurance company pays the rest. The average deductible is $500 or $1,000.
Decide on an effective date: The effective date is the first day of your insurance coverage. It could be as soon as the same day you purchase the policy, though you should check with the insurance company first.
Choose the length of your premium payment: You can pay your car insurance premiums monthly, every six months, or every twelve months. You may be eligible for a small discount if you prepay for six or twelve months or sign up for automatic payments.
Examine your information: Check that the policy, vehicle description, and all of the other information you provided are correct.
Pay for the policy: You can pay for your policy online by entering your banking information, such as your routing number and bank account number. You could also pay with a debit or credit card. After you pay, your policy will become official and will go into effect on the date you specified. You will receive an email with an insurance declaration page for your records, or you can download one.
Print your insurance card and keep it in your car: Keep a copy of the insurance declaration and digital insurance card in your vehicle. You may receive a hard copy in the mail, but print a copy just in case. You'll need it to show as proof of insurance in the event of an accident or if you're pulled over.