The Average Car Insurance for New Drivers

Average Insurance Costs

According to the Insurance Information Institute, the average cost of car insurance was $789 in 2008, the most recent year that the statistics have been compiled for. Insurance needs and risk values change from one person to the next, affected by driving record, personal demographics and the kind of car you drive. The average cost of insurance for you may be dramatically lower than the national average, but it could also be substantially higher.

Liability Insurance

Liability insurance in one form or another is mandatory throughout the United States, and buying minimum requirements may be the least expensive method rather than the best choice. For example, a $25,000 personal liability policy could easily fall short of settling the claim if you badly injure someone in a car accident, leaving you to pay the remaining cost of the injuries out of your own pocket. Getting more coverage costs more, but it can save you thousands of dollars if you are at fault in a serious accident.

No Fault / Medical Payments

No fault insurance is sometimes referred to as medical payments coverage. In some states, such as Florida, PIP no fault is the basic type of policy, but it must be purchased as an optional rider in other locations. Medical payments will help you get past being injured in accident, but sufficient coverage comes as a large rider on your basic policy.

Uninsured / Underinsured Coverage

Unisured/underinsured insurance is used to cover your injuries and damages if the person at fault for the accident does not have sufficient insurance coverage. Choose a coverage plan that will be suitable for your and you entire family in a worst-case scenario. The insurance will add a significant amount to your auto insurance, but it can be devastating to need the coverage and you do not have it.

Collision Insurance

You can also save money by dropping your collision coverage. This type of insurance is used to pay for damage to your own vehicle, regardless of who is found to be a fault. If the guy who hit you does not have enough coverage to get your car repaired, you own collision coverage will cover the difference.

The Bottom Line

Your policy is not going to be the same as the next person’s, and the coverages you choose will have an impact on your insurance costs as well as your peace of mind. You may be able to get insured for less than $789, but it is vital that your coverage is sufficient to protect you from heavy losses. Paying more for an insurance policy you don’t use is many times less expensive than needing coverage that you never bought.

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