How Are New Driver Car Insurance Rates Determined?

New drivers don't have a lot of car experience for insurers to go on. So, insurers consider a variety of other characteristics and factors instead. Just what actually goes into an insurance premium, anyway?

6 Determining Factors for New Driver Car Insurance Rates

Here's a quick crash course in how insurers decide your auto insurance financial fate. Your rates are determined by:

1. Where You Live

Some states experience higher premiums than others. This can be due to variations in local laws, different weather patterns, and other local factors. 

A spokesperson for The Zebra, an online car insurance marketplace, said that accident rates, driving patterns, and much more all factor into car insurance for teens

"Different areas within a state may have different rates because the risk of accidents may be higher in one area over another (i.e. rural driving vs city driving)," the rep said. "Weather is also an important factor to consider, as well as population density and crime rates that vary even in ZIP codes." 

2. Your Gender

Yes, your gender factors into your driving insurance. If you're a guy, it might not seem fair. Young men usually pay more for car insurance than young women do.

This is something you can't really change, however. You can, however, choose a car that's cheaper to insure and you can build a good driving record over time. 

3. Your Age

Although you're both in your teenage years, a 16-year-old and a 19-year-old may pay different rates.

"Once a driver has gained more experience, factors such as driving history, annual millage, and prior insurance coverage are also taken into account," The Zebra's spokesperson added. "A new driver is a big risk for an insurance company, mainly because of so many unknowns." 

Older drivers with more experience generally have fewer unknowns, making it a safer bet for insurers to offer coverage. 

4. Your Grades

Yes, you can get a discount for being a good student. That might just make studying extra for that calc test worth it. It's important to see what discounts your insurer offers when you sign up for your policy, because there may be something worthwhile you already qualify for--like a good student discount. 

5. Time of Purchase

Even the month you shop matters! In some cases, premiums can differ by as much as half depending on what time of year you shop. This is why it's a good idea to compare seasonal rates as well as different insurers.

6. What You Drive

A used minivan probably won't set you back as much for insurance as a brand-new sports car would. Some cars may look very cool but be enormously expensive to actually insure. 

"A new driver can reduce their rates by carefully choosing a car to insure," The Zebra's 2018 State of Auto Insurance Report states. "If a vehicle is generally considered safe, and scores well in crash safety tests, then the rate will reflect this. Buying an older model can also decrease insurance rates, a five-year model can save you an average of 12% on your annual car premium." 

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