About 42% of the world’s population is less than 25 years old.
When you’re under the age of 25, finding reasonable insurance premiums can be tricky. Sometimes drivers make the mistake of cutting important coverages to lower their rate. Other new drivers choose such low coverage limits that their policy becomes weak.
If you want to have a strong insurance policy that’s also affordable, you’re in the right place. This guide will walk you through what coverages young drivers need to carry and the proper coverage limits.
What’s the best car insurance for new drivers under 25? Read on to find out.
Liability for Young Drivers
Do you know what your state’s minimum liability requirements are? Typically, states will have liability limits of at least 10,000/20,000 for bodily injury coverages.
However, the limits could be higher depending on where you live. It’s not uncommon for states to require residents to carry 50,000/100,000 or even 100,000 / 300,000 for their liability coverage limits.
As a new driver, it’s essential to pick limits to protect your financial future. Liability is a type of coverage that keeps you safe from legal trouble. Instead of someone being able to sue you and take your assets, the insurance company will be there to provide a layer of protection.
Drivers under the age of 25 might not have many assets or personal wealth built up just yet. However, that doesn’t mean they shouldn’t carry high liability limits. If you wind up in a personal injury lawsuit now, think about how that could affect your future success.
Navigating Coverage Limits
To play it safe, we suggest carrying bodily injury limits of at least 50,000/100,000. What exactly do these numbers mean? The numbers explain how your insurance carrier will payout in the event of an accident.
For liability coverages to apply, you’ll have to be the one who causes the accident. If you cause an accident and the other driver experiences an injury, your bodily injury coverages can pay for their medical bills.
The first number for your coverage limits lets you know how much each person can claim. The second number lets you know how much your insurance will pay per accident.
If you carry bodily injury limits of 50,000/100,000, your insurance provider won’t pay over $100,000 for each accident. If the passengers in the car you hit have over $100,000 worth of injuries, your policy won’t continue to pay for them.
Medical expenses add up fast. The average stay at a hospital costs $2,607 a night. If you’re afraid $100,000 isn’t a high enough amount, it’s not unheard of to carry higher limits.
Have an insurance agent quote you with varying limits to see the price differences. Sometimes increasing your coverages from 100,000 to 300,000 will only cost a few dollars more.
Liability coverages are one of the least expensive coverages on your insurance policy. Keep in mind that bodily injury is just a portion of liability protection.
Property damage is another aspect of liability coverage. If you cause damage to someone else’s vehicle or a stationary structure, your property damage can pay for the bill.
Do You Need Full Coverage Car Insurance?
Should you get full coverage as a young driver? The state will require that you carry liability coverages, but covering your vehicle is optional. As long as you’re the owner and not making payments on it, it’s up to you whether or not you want to include the car on your policy.
As a general rule of thumb, it’s almost always a good idea to carry full vehicle coverage. Unless you have a car worth less than a few thousand dollars, your coverages can provide financial security.
As you start calling for quotes, you’ll hear insurance agents talking about comprehensive and collision. Comprehensive and collision are the two coverages that apply directly to your car.
Collision is what it sounds like and covers any collision—comprehensive covers car repairs for perils such as theft or storm damage. For instance, if there was a big hail storm and it dented your car, you could file a comprehensive claim.
Set Smart Deductibles
What type of deductibles should young drivers choose? Drivers under the age of 25 would do best sticking to low deductibles. The lower the deductible, the easier it’ll be for you to recover after an accident.
A deductible is the amount that the named insured has to pay themselves. If you cannot pay the deductible, your insurance coverage won’t apply.
The two coverages on your car insurance policy that require deductibles are comprehensive and collision. For instance, let’s say that a significant storm causes $2,000 worth of damage to your car. Before your insurance pays the $2,000 repair bill, you’ll have to meet your agreed-upon deductible.
The amount of your deductible will depend on what you choose when you sign up for your policy. You can choose a $0 deductible or one as high as $1,000. As we mentioned earlier, the lower the deductible, the easier it’ll be on your wallet.
Typically $500 is a safe deductible amount, but it’s still a good idea to try going lower. Have an insurance agent provide you with quotes for different deductible amounts.
Stay Safe With Uninsured Motorist
Since you’re responsible and shopping for car insurance, it’s easy to assume everyone else is doing the same. However, the truth is that there are many uninsured drivers out there on the road. There are around 32 million uninsured drivers in the United States.
Sadly, if an uninsured driver hits you and causes injuries or car damage, you could have to pay for everything yourself. The uninsured driver might receive a ticket or face legal complications, but that doesn’t help you financially.
The best way to protect yourself as a young driver on the road is to carry uninsured motorist coverage. Uninsured motorist coverage is precisely what it sounds like. You’ll have protection if an uninsured motorist hits your car and causes damage or injuries.
Uninsured motorist coverages work like your bodily injury and property protection, except they only apply to you. The coverage limits will look similar, and the payouts will be structured similarly.
For instance, you could carry uninsured motorist coverages with limits of 100,000/300,000/100,000. If an uninsured driver hits your car, you could claim up to $100,000 for your injuries. If there were other passengers in your vehicle, you could claim up to $300,000 for the entire accident.
The last number on the coverage limit lets you know the property damage. You’d have $100,000 of property damage to repair your car in this situation.
Personal Injury Protection
Uninsured motorist isn’t the only coverage that can pay for your medical bills. Young drivers will also need to carry personal injury protection. Often personal injury protection, or PIP, is mandated by the state.
A typical PIP coverage limit would be 10,000/20,000. These limits mean you can claim up to $10,000 per person and $20,000 per accident.
Along with covering medical expenses, PIP can also help with income substitution. If an accident causes you to miss work, PIP can assist with covering the lost wages.
Do you live in a no-fault state? Then the PIP applies no matter who causes the accident.
Keep in mind that your coverage limits aren’t going to overpay. If you only have $5,000 worth of medical bills, you don’t get to take home a $10,000 payout. Insurance companies only pay for what you can prove you need coverage for.
Rental Reimbursement and Roadside Assistance
As a new driver, you must choose a reputable insurance provider willing to offer you policy add-ons. Policy add-ons can be a tremendous benefit for your wallet and driving experience.
Two of the most critical policy add-ons are rental reimbursement and roadside assistance. The best car insurance for new drivers under 25 will include roadside services.
It’s incredible how comprehensive and affordable the roadside assistance add-ons are. Sometimes, you can get a complete roadside plan for as little as $5 a month or less. Your roadside assistance plan can include lockout services and flat tire repair.
You’ll also want to invest in rental reimbursement since it can be a lifesaver. If your car is damaged in an accident, you’ll have a rental car to get around in the meantime. Rental car reimbursement has different coverage limits, and we suggest going with the 30/900 setup.
A 30/900 rental reimbursement coverage limit means you’ll have $30 for 30 days. The plan will pay up to $900 before you exhaust the coverage.
Find the Best Car Insurance for New Drivers Under 25
Now you know how to find the best car insurance for new drivers under 25. What matters most is that you have the coverages you need. Luckily for you, we’re experts at finding significant coverages for affordable rates.
Infinex Financial Group is a broker-dealer powerhouse with access to various reputable carriers. We can help you look for insurance providers who are happy to cover young drivers.Let us show you how we can make insurance easy and affordable. Finding cheap car insurance is possible. Reach out to one of our agents today for a free quote.