When Does Car Insurance Get Cheaper For Young Drivers?

  • Author :
  • TATA AIG Team
  • Published on :
  • 18/07/2023

Car insurance can be pretty expensive for young drivers. This is because younger drivers have less driving experience and are more likely to get into collisions. They also drive less often, which could result in lower miles on their vehicles compared to older drivers, subsequently increasing the insurance cost.

Financially, these costs can be difficult to cover for someone in their teens and young adults, as with most households, this cost is covered fully or partially by the parents. However, most insurance companies specifically offer discounts to young drivers for this reason when they purchase a car insurance policy.

Why Is Car Insurance So Expensive For Young Drivers

This mainly comes down to the amount of experience a driver has. The more driving experience, the less expensive their insurance premiums are since it signals to the insurance company that they are less likely to get into accidents or cause collisions.

All car insurance companies are primarily interested in the experience and skill level of the driver. Since younger drivers have less experience, they're considered a risky investment. Since fewer accidents also mean fewer claims filed, it incentivises the insurance companies to offer lower insurance rates for older drivers and higher ones for young drivers.

However, if you are a young driver, this doesn't mean that insurance for your four-wheeler will always be expensive. Insurance premiums usually go down as drivers gain more experience and get older. Furthermore, there are a few ways to bring down the cost.

How To Get Affordable Car Insurance For Young Drivers?

Before making that purchase, remember to read the fine print in the car insurance policy about the deductible amount and due date/expiry date. The deductible is the amount you pay out of pocket before the car insurance covers you for damages when filing a claim. It is calculated by multiplying your premium cost by the percentage of coverage you have.

Due to higher collision rates in recent years across most of India, the typical deductible for a car insurance policy has risen dramatically. Here are a few ways to get a more affordable car insurance policy as a young driver.

1. Work On Your Driving Skills And Habits

One sure way to lower your insurance rate is to practise safe driving habits and techniques. By doing so, especially in the first year, where you have no accidents, and file no claims. You prove yourself to be a low-risk driver and investment to the insurance company. This will automatically bring down your premium amount during policy renewals.

Some insurance companies also install telematic devices to monitor the driving patterns in your car. If it detects, you are a safe driver. It can transmit this information back to the insurer, thereby lowering your premium rates.

2. Make Use Of Discounts Offered By Insurance Companies

This can tie into the previous point. Being a safe driver awards you access to many company discounts. The discount percentage has increased as high as 75% in some cases.

The other key feature that can lower your premium rate would be the no-claim bonus offered by all insurance companies, which increases with each progressive year you do not file a claim.

3. Include A 2nd Or 3rd Driver In Your Policy

Your insurance premium is calculated based on many factors, a key one being risk. As we stated, insurance companies consider younger and new drivers a risky investment.

One way to lower your insurance rate is by adding someone from a low-risk group to your insurance policy. This can be a more experienced driver, which will significantly bring down the premium amounts of your car insurance policy.

4. Opt To Pay Premiums Annually

Monthly premiums can be more expensive as they can include other charges like additional interest rates and other expenses to the bank and the insurance company. Paying your premiums annually instead of monthly can help you save on these additional expenses as a younger driver.

5. Compare Different Policies Available Online

This is one of the best ways to get affordable car insurance for young drivers. Comparing insurance policies with each other online can give you a complete picture of how much you will need to spend on a particular insurance plan. An excellent way to estimate how much you will be spending on a car insurance policy is a car insurance calculator.

It is an online tool used to calculate the premium rates of an insurance policy, so you are no longer stuck guessing at how much you will have to spend for an insurance policy.

At What Age Does Insurance Start To Go Down?

Generally, the cost of insurance for four-wheelers goes down as you get older. This is because, with age, people get more driving experience, and older people are less likely to be frequently involved in accidents. For example, a yearly full-coverage policy can cost around ₹18,000 when you are 25. However, this price can go down to ₹10,000 if you are 40 and have held a valid driver's licence for 20 years.

Usually, it is best to pay your insurance premiums in full if you are a young driver, as it can qualify you for discounts, lowering your insurance amount.

Do You Really Need A Car Insurance Policy?

In India, having at least a third-party motor insurance policy is legally mandated according to the Motor Vehicles Act. Furthermore, Indian roads are notoriously accident-prone. With more people buying private vehicles every year, it is more likely that the percentage of accidents and collisions will also rise.

So what is the best car insurance for young drivers? It is generally advised, at least with newer or high-end cars, to have a comprehensive car insurance policy as it will provide more coverage. Furthermore, if your car gets stolen, and if you do not have insurance, it can result in a net loss of goods. So it is always better to have an insurance plan rather than not.

Conclusion

Insurance rates often get cheaper as we age because older drivers are more skilled and less likely to cause collisions. However, as a younger driver, practising most of the methods stated here can help lower your premium amounts. Additionally, buying car insurance policies online is cheaper when compared to buying them offline.

So the next time you buy insurance for your 4-wheeler, consider buying it from Tata AIG's website. Doing so can also make you eligible for discounts and other benefits when buying insurance from our site.

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Your policy is subjected to terms and conditions & inclusions and exclusions mentioned in your policy wording. Please go through the documents carefully.

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