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Car insurance with a graduated license
How to get savings now and set yourself up for low rates in the future.
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Your graduated, probationary or intermediate license means you’ve updated your learner’s permit and you’re one step closer to a full license. But it doesn’t give you a degree in safe driving. You’ll probably experience higher insurance rates until you hit your 20s for age-related reasons alone. You can look for ways to save now and set yourself up for future savings while you’re at it.
What's in this guide?
Why do I need car insurance with a graduated license?
With a graduated license, you have more driving freedom. However, you still might face some requirements, like driving curfews and limited passengers. You also need insurance coverage to stay legal as you drive solo on the roads. However, consider several factors when getting insured:
- Sharing a policy. You can share a policy as long as you’re living at home and drive the family car or add your own to the policy.
- Getting your own policy. You may need your own policy if you’re living on your own. But that could mean higher rates until you hit the 21- and 25-year-old milestones when insurance drops.
- Student status. As a high school junior, senior or college-bound student, you could get lower rates if you’re not driving much during the school year. Plus, get rewards for keeping your grades up.
- Getting a job. Both your job and education can affect rates. So consider a job that doesn’t make you more of a risk to your insurer, like driving high mileage or after long work hours. You might also be able to extend your driving curfew if you prove to the DMV you have a job.
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- Broad coverage, including for custom car parts or ridesharing
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- Stack a variety of discounts for multiple cars, autopay or homeownership
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How much does car insurance with a graduated license cost?
Having a graduated license can mean lower insurance rates than a learning driver. However, the factor that weighs most toward your premium is your personal age or license age, which shows your length of experience.
In general, teens pay the highest premiums because statistics show they’re more likely to get into an accident. Average teen rates can go above $6,000 per year for a standalone policy but are lowered to $3,858 once you hit 18.
By comparison, the average car insurance rate is around $1,300 per year. So the longer you have your license, the more driving experience you have and the lower your insurance rates.
Affects of a graduated drivers license on insurance costs
Since there are restrictions on your graduated license while you’re still gaining experience, accidents are reduced. In fact, since the graduated license program was put in place, the Insurance Institute for Highway Safety reported a 68% reduction in fatal car accidents of 16-year-old drivers over 14 years. A lower amount of accidents and claims results in a lower premium for you, your family and drivers overall.
How can I save on car insurance with a graduated license?
Driving on your own for the first time doesn’t disqualify you from insurance savings. You can lower your premium if you:
- Shop around. See which providers offer the best teen-friendly insurance, premium discounts and rewards for your new graduated status.
- Share your policy. You may get a better rate by adding yourself to your parents’ policy or another family member’s.
- Play the student card. If you have good grades, low mileage or if you’re attending school away from home you could score savings.
- Consider telematics. You could get a rate based on your safe driving if you allow your insurer to track your driving habits.
- Get just enough coverage. You may need ample coverage like collision since you’re still gaining experience, but consider cutting some options like better car replacement if you’re driving an older family car.
- Go for a seasonal policy. You might opt to lower coverage during the school season if you’re taking the bus and aren’t driving. This could be a change to your current policy or a special policy on its own.
- Pay as you go. This lets you pay only for the miles you drive, which may help if you need a standalone policy but don’t drive much. This policy also uses telematics.
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What kind of coverage should I get with a graduated license?
You’ll need enough coverage to keep you and your car well protected. Consider several coverage types to ride along with you:
- Liability. This keeps others protected against vehicle damage and injuries if you cause an accident.
- Uninsured/underinsured. Makes sure you have coverage, whether or not the other driver has enough insurance.
- Collision. Protects you or your family from paying for repairs after an at-fault incident.
- Replacement cost. An option that gives peace of mind about replacing your car with the same model and no out-of-pocket costs.
- Roadside assistance. Offers a helping hand if your car breaks down for situations like running out of gas, getting locked out or having a flat tire.
Case study
Amber received her graduated license when she turned 17 and is planning to go to college next year. By adding herself to her parents’ policy, her rate is $4,100 per year.
However, Amber received a good student and safety course discount, which lowered that rate by 20%. When Amber goes away for college and leaves her car at home, the rate will decrease by another 35%. The final rate after all discounts will be $2,132 per year.
Watchouts for car insurance with a graduated license
With newfound freedom comes driving fun and responsibilities. Those responsibilities may affect your present and future car insurance rates:
- Building credit. Getting off to a good financial start can begin before you even graduate, and the best credit scores bring the best insurance rates.
- Driving record. If you keep your driving record clean, you’ll also keep your insurance premiums low.
- Getting a car. While you might be eyeing the newest hot rod in town, think about putting a less expensive car to insure on your list instead. Those include small body types like sedans and crossover SUVs.
- Pleasure riding. Consider keeping your weekend jaunts safer by inviting over-25s along for the ride. These more experienced drivers may help you make safe driving choices and keep you from getting into an accident.
Bottom line
Your solo driving could mean higher insurance rates because of your age. However, you can lower towering costs by sharing a policy with family members, getting student discounts and comparing providers for the best coverage.
Frequently asked questions about graduated license
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