Insured?

Auto insurance may be costlier for first time buyers

Buying your first auto insurance policy usually means a lot of hassle and misunderstandings. First time auto insurance buyers are typically those who have just bought their first car and are making the first steps into getting a solid driving experience. If you are one of these drivers one of the least pleasant news will be that your auto insurance rates will typically be higher if compared to more experienced drivers. Why? There's a set of reasons for first time insurance shoppers to get higher rates.

The main reason for new auto insurance customers to get higher rates is the lack of driving experience. Insurance companies are very cautious about drivers with a short driving record since they have a higher risk of ending up in an accident and filing an insurance claim than drivers with a vast experience of driving. And the higher is the risk of a customer to file a claim the higher rates he or she will get. Don't think that the insurance company has a certain prejudice towards new customers. The only thing that matters to insurers is the risk they take upon themselves when insuring each drivers. And if the risk is higher they charge respective rates.

Another reason for higher rates can be the driver's age. Usually, the first auto insurance policy is purchased when the person is still young and only learns how to driver. Sure, the teen can be included in the parents' auto insurance policy and avoid higher rates for individual insurance. But if a driver aged less than 25 chooses to purchase a separate policy even with plenty of driving experience his or her rates will always be higher if compared to older drivers. This is explained by the claims statistics all the companies share with regard to age groups. It has been observed that drivers younger than 25 tend to file the most claims and get involved in serious accidents more often. That's why you should expect to pay more when shopping for your first policy.

But it doesn't mean that you should always pay more for auto insurance being a first time buyer. By shopping around and comparing quotes from different companies you will be able to locate competitively priced policies regardless of your driving experience. So make sure to spend some time on comparison shopping when buying your first auto insurance policy if you don't want to end up paying a whole lot more for it later.

How auto insurance rates are affected by the vehicle Auto insurance may be costlier for first time buyers