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Which auto insurance is best for young adults?

It’s an uncomfortable truth that, as a young driver, you are perceived to be at greater risk of an automobile accident then older drivers.

This is because of the limited amount of experience you have behind the wheel, leading to a statistically higher risk of having an accident than more experienced drivers.

For that reason, it is vital that, as a young adult looking for the best auto insurance, you are ultra-diligent with your research.

The best way is to create a chart listing the policy variables and then print out several copies. That will allow you to detail the various policies that are available to you and enable you to quickly compare like for like.

You need to be clear about what each particular policy covers.

For example, suppose your vehicle is damaged beyond repair. Does the policy pay out what they perceive is the value of the written off vehicle or is it a ‘new for old’ policy where they pay for a new or fairly new replacement vehicle?

As well as being certain about what is covered by each policy, you also need to be sure what is not covered. To do this, be sure to check the insurer’s list of exclusions.

For example, if there are five seat belts in your car, but you cram six or more of your buddies into the vehicle and have an accident (which is not a completely uncommon scenario with young drivers) your insurance company will deny your claim, because it is one of the exclusions in the policy.

All US auto insurers have a provision for deductible payments. This is an amount that you, as the insured person, agree to pay towards the damage in the event of a claim.

So, if – for example – the claim payout totals $4,000 and your deductible is $500, then the insurance company will pay $3,500 and look to you to pay the other $500.

Most insurers allow you to choose how large or how small a deductible you pay and this will be reflected in the size of your premium. So it’s worth getting quotes for various sized deductibles, to see which is most beneficial ratio of deductible to premium for you.

Another aspect to check is the optional extras, such as roadside assistance cover, which might be much cheaper bought with the policy than buying this separately elsewhere.

Finally, you only really discover how good or bad your insurers are when you come to make a claim – at which point, it’s too late!

So investigate their claims procedure before you buy their insurance.

Before you finally settle on your insurance company, here are a few other ways you could reduce your sky-high young driver premiums.

Adding an older person to your policy could well reduce the average premium for both drivers, because the older driver is perceived as a lower risk. But never claim the older driver is the main driver, if it’s not true. This is a practice well known to insurers. It is called ‘fronting’ and will get your claim denied.

Even if you are on a tight budget, try to pay the premium in one lump sum, rather than monthly, which will tend to attract a higher premium and possibly interest, too.

Even being a model student with good grades can help reduce your young driver premiums because you will be perceived as sensible and reliable.

So keep those report cards handy. Anything from B upwards could be worthwhile.

Some insurers will lower the premiums if you complete an advanced driver course, because you are perceived as a responsible driver and the course will help to hone your driver skills – as well as being great fun, too!

Comprehensive cover will always cost more than just third party liability, but it’s worth comparing the two to see which actually gives you better value, taking into account your overall circumstances.

Once you start to narrow down your possible insurers, it might pay you to inquire if any of the ones on your short list offer a discount if you bundle another insurance with your auto insurance.

It can be very bewildering, as a young driver, to pick you way through the minefield that is auto insurance for the first time.

So employing the services of a good insurance broker, will help you find a policy that is exactly right for your particular circumstances.

You will also find the latest ways of keeping a lid on your young driver premiums in our regular newsletter.

Published in Auto Insurance

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