A Student’s Guide to Your First Auto Insurance Policy

Last Updated on April 16, 2013

The average college student simply doesn't need the high cost of driving to interfere with the financial pitfalls already associated with getting a degree. But is there a reliable way to find affordable first-time car insurance? Most young people avoid high insurance premiums by being on the family plan as an additional driver, but this isn't an option for everyone, especially when teenagers are old enough to leave home and go to college. Fortunately, most insurance companies know this, which is why there are plenty of incentive programs for first-time insurance buyers available. The trick is finding out what works for you.

1. Why do Young Drivers Cost So Much More?

The reason first-time car insurance buyers typically have it so rough is less to do with age and more to do with the fact that they have no driving record to speak of. It's just like getting a credit card when you're in college – you have no credit yet, so the credit provider doesn't really know how you handle debt. Until you've been on the roads for at least a few years, nobody really knows how safe you will be. In fact, car accidents remain the leading cause of death for Americans right up until age 34, with astronomical percentages for drivers under 19. That's why students often need to prove that they can be responsible. Good grades and driver's education courses are just some of the ways that students can show they are less of a risk for accidents.

2. Think About the Type of Car You Drive

The best way to make sure you won't be paying sky-high rates for insurance is to think about insuring your car before you even purchase it. Insurance rates for males under 25 driving flashy sports cars is the highest of any demographic, and flashy sports cars are definitely what you want to avoid. You need a car that is safe and reliable, with security features that will save you money on your policy. You should also research how often the make and model of your car is stolen, because high theft numbers can sometimes make your premium more expensive, as well. The cost of maintenance and quality of performance of your vehicle can often affect how easy it is to get a realistic insurance package for it.

3. Shop Around

While most drivers of any age can save a few hundred dollars on their premium simply by doing a better job of comparing different companies, for young drivers, the average amount saved is closer to $1,100. It's true that some insurance companies avoid young drivers altogether by charging them enormous rates, but others work off many different variables, and you never know where you might find good incentives for first-time insurance buyers. When you're in the market for auto insurance, don't accept the first, second, or third quote you receive. Putting the effort into looking around on sites like www.kanetix.ca can really pay off. And once you have your policy, keep shopping around for new deals at least once or twice a year. You'll be amassing a solid driving record, so your offers should start to be much lower with time.

4. Paying for Lower Deductibles

You can never be sure of exactly how much an auto accident will cost you, or even if you'll be involved in one at all. Your deductible is the amount your claim pays out in the event of an accident, and lowering this amount is one of the quickest ways to lower the price of your insurance. It's a big gamble because you never know when it could backfire if you do happen to be involved in a collision, but a low deductible can work out well for younger drivers who might need a few years of experience under their belts before they can pay more reasonable insurance rates. You should check around to find out what the bare minimum is for insurance in your state. Most states simply require liability insurance, which shouldn't cost a fortune for most cars.

Young drivers cause around 12 percent of all car accidents and top the chart when it comes to aggressive driving stats, so it's no wonder that insurance companies are sometimes wary about taking on first-time policy holders. But everyone has to start somewhere, and many of them will be willing to work with you to get a policy rate that you can feel comfortable with. Remember that the safer you are on the road, the more money you will save in the long run. And when you're a student, that's a powerful motivation for anything.

Amy Nielson is an avid blogger. You can follow her on Twitter @NielsonAmy.

Photo credit: madamenoire.com

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