Car Insurance for Young and New Drivers: 2026 Guide

Young new driver holding car keys beside a parent, reviewing a car insurance policy document

Last reviewed: October 1, 2026

Short answer: Young and new drivers pay more for car insurance because insurers price on crash risk, and inexperienced drivers crash far more often. The Insurance Institute for Highway Safety (IIHS) reports that teen drivers have crash rates over 4 times those of drivers 20 and older per mile driven. In most US states, a new driver also has no driving record, no insurance history and often a thin credit file, so the insurer has little evidence that this particular driver is safer than average.

The cheapest legal route for most teens is to be added to a parent's or guardian's policy rather than buying a separate one. Adults who are licensed for the first time, and drivers with no credit history or no prior insurance, usually save most by comparing several quotes with identical coverage, choosing a modest and safe car, asking about every discount they qualify for, and keeping a clean record with no gaps in coverage. If no company will insure you, every state has a last-resort route, often called an assigned risk plan or automobile insurance plan.

This guide covers three groups: teenagers and drivers under 25, adults who get a licence later in life, and drivers with no credit history or no prior insurance. It draws on the Insurance Institute for Highway Safety (IIHS), the Centers for Disease Control and Prevention (CDC), the National Association of Insurance Commissioners (NAIC), the Insurance Information Institute (Triple-I), the Federal Trade Commission (FTC), state regulators and official UK and Canadian sources. We do not recommend any insurer, and we do not show real prices.

This article is general information, not financial, legal or insurance advice. Rules differ by state, province and insurer, so confirm the details with your own state insurance department and motor vehicle agency.

In this guide

Why young and new drivers pay more
How insurers price a new driver
Credit-based insurance scores and drivers with no credit
Staying on a parent's policy vs buying your own
Required coverage and state minimums
Graduated driver licensing and insurance
Discounts explained by type
Telematics: savings and privacy trade-offs
Choosing a car that is cheaper to insure
Adult first-time drivers and no prior insurance
Non-owner policies
If no insurer will cover you: assigned risk plans
International licence holders and newcomers
SR-22 basics after serious violations
What to do after a first accident or ticket
How rates change with age and a clean record
How to shop and compare quotes, step by step
Checking an insurer's licence and complaints
A short note for UK readers
A short note for Canadian readers
Common mistakes
New driver's checklist
FAQ
Bottom line
Sources

Why young and new drivers pay more

Young and new drivers pay more because, as a group, they are involved in more crashes and more serious crashes than experienced drivers. Insurance prices follow expected claims, and the claims data for inexperienced drivers is clearly worse.

The numbers from safety bodies are consistent:

Crash rate per mile. IIHS states that teen drivers have crash rates over 4 times those of drivers 20 and older per mile driven.
Fatal crash rate. The CDC says the fatal crash rate for drivers aged 16 to 19 is almost three times as high as the rate for drivers aged 20 and older. IIHS reports a similar ratio.
The youngest are the riskiest. According to the CDC, the crash rate for 16-year-olds is about 1.5 times as high as for 18 to 19-year-olds.
The first months matter most. IIHS notes that crash risk is particularly high during the first months after a teen gets a licence.

IIHS sums up the cause in one sentence: for teenagers, the combination of immaturity and inexperience makes driving especially risky. Safety researchers point to a set of specific risk factors.

Risk factor	What official data says	Why it matters for insurance
Inexperience	IIHS: crash risk is highest in the first months of licensed driving.	Insurers charge most in the first years and less as experience builds.
Night driving	CDC: the fatal crash rate at night is about 3 times as high for teen drivers as for adults aged 30 to 59.	Telematics programs often score late-night driving as higher risk.
Passengers	IIHS: passengers increase crash risk for teenage drivers but decrease it for drivers 30 and older.	Licensing laws restrict teen passengers; breaking them can lead to tickets.
Speeding	CDC: in 2020, 35% of male drivers and 18% of female drivers aged 15 to 20 involved in fatal crashes were speeding.	Speeding tickets are among the most common reasons a new driver's premium rises.
Alcohol	CDC: 29% of drivers aged 15 to 20 killed in crashes in 2020 had been drinking.	An impaired driving conviction can trigger an SR-22 and years of high rates.

None of this means every young driver is a bad driver. It means the insurer cannot yet tell the careful 17-year-old from the careless one. That is also why an adult who gets a first licence at 30 often pays more than a 30-year-old who has driven since 16: the missing ingredient is experience, not just age.

How insurers price a new driver

Insurers combine a set of rating factors to estimate how likely you are to make a claim and how much it would cost. For a new driver, the heaviest factors are usually age and years of experience, the car, where it is kept, how much it is driven, the driving record and, in most states, a credit-based insurance score.

The NAIC and the Triple-I describe the main factors in similar terms. The table below sets them out with what a new driver can and cannot change.

Rating factor	How it is used	Can you influence it?
Age and driving experience	The Triple-I notes that insurers generally charge more if teenagers or young adults under 25 drive your car, because mature drivers have fewer accidents.	Only with time. Each clean year helps.
Driving record	Accidents and moving violations raise premiums; the NAIC lists driving record first among rating factors.	Yes. This is the factor most within your control.
Annual mileage and use	More miles mean more exposure. Commuting or driving for work costs more than occasional pleasure use.	Partly. Report mileage honestly; low-mileage discounts may apply.
Vehicle	Cost of the car, repair costs, theft likelihood, engine size and safety record all matter. The NAIC notes that luxury and sports cars average a higher number of claims.	Yes, if you have not bought the car yet.
Gender and marital status	Used in many states. The Triple-I says women tend to have fewer and less serious accidents; the NAIC notes married drivers have fewer claims.	No. Some states limit or ban these factors.
Credit-based insurance score	Used in most states to predict the likelihood of claims.	Yes, slowly. See the credit section below.

Rules differ by state

Car insurance is regulated state by state, and states do not agree on which factors are fair. California is a clear example. The California Department of Insurance explains that insurers there must look at your driving record, how many miles you drive in a year and how long you have been driving. California also requires every auto insurer to offer a Good Driver Discount: the department says rates for a qualifying Good Driver must be at least 20% lower than a non-Good Driver would pay at the same company. To qualify you need three consecutive years of being licensed and no more than one point on your record, which means a brand-new driver has to wait for it.

Credit-based insurance scores and drivers with no credit

In most US states, insurers may use a credit-based insurance score when deciding whether to offer you a policy and how much to charge. A driver with no credit history is not automatically treated as a bad risk, but a thin file can mean you do not get the best price tier. A few states restrict or ban the practice.

What a credit-based insurance score is

The NAIC explains that a credit-based insurance score uses information from your credit history to predict the likelihood of future insurance losses. It is not the same as the credit score a lender uses to predict whether you will repay a loan, although both are built from your credit report. According to the NAIC, these scores were introduced in the early 1990s, and around 95% of auto insurers use them in states where it is allowed. Insurers use them in two ways: underwriting, which is deciding whether to offer coverage, and rating, which is setting the price.

If you want to understand the underlying report, our guide on what a credit score is and how it is calculated explains the ingredients, such as payment history and length of credit history.

Which states restrict them

The NAIC says that in most states insurers cannot use these scores as the sole reason to raise rates or to deny, cancel or refuse to renew a policy. Beyond that, the rules vary:

California. The Department of Insurance consumer guide lists driving record, annual mileage and years of driving experience as the factors insurers must consider. Credit is not among the factors the guide describes for auto rating.
Washington. The Office of the Insurance Commissioner says insurers may use credit information for underwriting and rating, and that there is currently no ban. But an insurer cannot use your credit history by itself to deny coverage or cancel your policy, and it cannot base decisions on things such as the number of credit inquiries, collections for medical bills, or the fact that you are financing a first car or home.
Other states. A small number of other states, commonly cited as including Hawaii, Massachusetts and Michigan, limit or bar the use of credit information in auto insurance, and Maryland limits how it can be used after a policy starts. The details differ and can change, so check your own state insurance department's website rather than relying on a list.

If you have no credit history

Many young adults, recent immigrants and people who have always paid in cash have a thin credit file or none. How insurers handle that is set partly by state law and partly by each company's filed rules. Some treat a missing score as neutral, and some place you in a middle or less favourable tier. Because companies treat it differently, the gap between quotes can be wide for a no-credit driver. That is a strong reason to compare several insurers.

What you can do:

Ask the question directly. When you request a quote, ask whether the company uses credit information in your state and how it treats an applicant with no credit file.
Build a file gradually. A long record of on-time payments helps over time. Tools designed for beginners, such as secured credit cards or student credit cards, can help if they are used carefully and paid in full.

Your rights when credit affects the price

Federal law gives you rights whenever an insurer uses a consumer report against you. The FTC explains that under the Fair Credit Reporting Act, an insurer must send an adverse action notice when it denies an application, raises a rate, terminates a policy or reduces coverage based partly or completely on a consumer report, even if the report played only a small part. The notice must name the consumer reporting agency that supplied the report, state that the agency did not make the decision, and tell you that you can dispute inaccurate information and get a free copy of the report if you ask within 60 days.

Staying on a parent's policy vs buying your own

For most teenagers and many college students, being added to a parent's or guardian's policy costs less than buying a separate policy. The Triple-I states that it is generally less expensive for parents to add teenagers to their auto insurance policy than for teens to purchase one on their own. A separate policy makes more sense once the young driver has moved out for good, owns the car, or has a record that is pushing up the family's premium.

Question	On a parent's policy	Own policy
Typical cost for the young driver	Usually lower. The household premium rises, but less than a stand-alone policy would cost.	Usually higher, because the driver is rated alone with no history.
Discounts available	May share multi-car, multi-policy and long-term customer discounts, plus student discounts.	Student, training and telematics discounts, but fewer household discounts.
Coverage limits	The teen shares the parents' limits, which are often higher than a minimum policy.	The driver picks the limits; cheap minimum-limit policies leave big gaps.
Who typically qualifies	Household members, and students away at school who still have the family home as their permanent address. Rules vary by insurer.	Anyone who owns a car or has moved out. A minor may need a parent or guardian to sign the contract.

Practical points for parents

Tell the insurer early. Call when your teen gets a learner's permit. Ask whether a permit holder must be listed and when the premium will change. Practices differ between companies.
Do not hide a household driver. Leaving a licensed teen off the policy to save money can lead to a denied claim or a cancelled policy. Insurers expect to be told about all licensed drivers in the household.

Students away at school

A student living away at school can often stay on the family policy. The Triple-I notes that insurers may offer a reduced premium for college students who attend school at least 100 miles from home and do not take a car to campus. Tell the insurer where the student lives and whether a car goes with them. If the car is kept in another state for most of the year, the policy may need to be rated for that location.

Students who rent off campus should also know that an auto policy does not cover belongings stolen from an apartment. That is a separate product, explained in our guide to what renters insurance covers.

Required coverage and state minimums

Almost every state requires drivers to carry liability insurance or otherwise prove financial responsibility, and each state sets its own minimum limits. The minimum is the least you can legally buy. It is not a recommendation, and it is often too low to cover a serious crash.

The NAIC describes the main parts of an auto policy:

Bodily injury liability pays for injuries you cause to other people, including medical expenses, lost wages, and pain and suffering.
Property damage liability pays for damage you cause to other people's vehicles and property, such as walls and fences.
Uninsured and underinsured motorist coverage protects you if you are hit by a driver with no insurance or too little.
Collision pays to repair your own car after a crash. It is optional by law but lenders usually require it on a financed car.
Comprehensive covers events such as fire, weather, vandalism, flood, theft and broken glass. It is also optional by law.
Medical payments or personal injury protection (PIP) pays medical costs for you and your passengers. Some states require PIP.

Minimum limits are usually written as three numbers. For example, 30/60/15 means $30,000 for injury to one person, $60,000 for all injuries in one accident and $15,000 for property damage. The table shows how three states describe their own minimums on official pages, to illustrate how much they differ. Limits change, so check your own state before you buy.

State (source)	Injury per person	Injury per accident	Property damage	Other required coverage
California (DMV)	$30,000	$60,000	$15,000	None listed on the DMV page
Texas (Department of Public Safety)	$30,000	$60,000	$25,000	None listed on the DPS page
Hawaii (Insurance Division)	$20,000	$40,000	$10,000	$10,000 per person personal injury protection

For a full explanation of each coverage, what it pays and how deductibles work, see our separate guide to car insurance coverage types.

Graduated driver licensing and insurance

Graduated driver licensing (GDL) is a system that gives new teen drivers full privileges in stages, so they gain experience under lower-risk conditions first. Every state's rules differ, but following them matters for insurance because violations can lead to tickets, licence delays and higher premiums.

IIHS describes three stages:

Learner stage. Supervised driving only. States require a set number of supervised practice hours, and part of that practice usually has to be at night.
Intermediate stage. Unsupervised driving is allowed, with limits on night driving and on the number of young passengers.
Unrestricted stage. Full privileges once the driver reaches a set age and has met the experience requirements.

Why GDL matters for your premium

The riskiest hours are the restricted ones. IIHS reports that in 2024, 35% of teen driver deaths happened between 9 p.m. and 3 a.m. GDL limits and telematics scoring both target these hours for the same reason.
Violations count. A ticket for breaking a night or passenger restriction can go on the driving record and may delay the full licence.
Ask about the permit stage. Insurers handle permit holders differently, so ask when your teen must be listed.

Discounts explained by type

Discounts can meaningfully reduce a new driver's premium, but they vary by insurer and state, and none of them is guaranteed. Ask each company which discounts it offers, what proof it needs and whether the discount applies immediately or at renewal.

The NAIC's consumer page lists common auto discounts: multiple vehicles, driver education, good student, safety devices, anti-theft equipment, low mileage, good driver or renewal discounts, and auto and home packages. We describe the ones most relevant to new drivers below, without amounts, because the size of each discount is set by each insurer's filed rates.

Discount type	Who it is for	What you usually need	Things to check
Good student	Full-time high school or college students	Proof of grades. The Triple-I mentions students who maintain at least a B average.	Age cut-off, how often you must re-submit proof
Driver training	Teens, and sometimes adult new drivers	Certificate from a recognised driver education or training course	Which courses the insurer accepts before you pay for one
Telematics or usage-based	Drivers willing to be monitored	A plug-in device, an app or the car's built-in system	Whether the price can go up as well as down
Distant student	Students at school far from home without a car	Proof of enrolment and distance. The Triple-I mentions 100 miles or more.	Whether the student is still covered when home for holidays
Multi-car	Households insuring more than one vehicle with one insurer	All vehicles on one policy	How drivers are assigned to cars

Telematics: savings and privacy trade-offs

Telematics, also called usage-based insurance (UBI), prices your policy partly on how you actually drive rather than only on the group you belong to. For a careful new driver it can be one of the few ways to prove low risk quickly. It can also raise your price, and it means sharing detailed data about your movements.

What is measured

The NAIC explains that UBI works through a device installed in the vehicle or through a smartphone. It lists what these programs can measure: miles driven, time of day, where the vehicle is driven, rapid acceleration, hard braking, hard cornering, phone use and air bag deployment. The idea is to base the premium on your own driving rather than on historical statistics for people like you.

The trade-offs

Your premium can go up. The NAIC is direct about this: advertising promotes the discounts, but UBI can also lead to higher premiums, and not everyone is a better than average driver.
Privacy. The NAIC notes that insurers tracking mileage and monitoring behaviour raises privacy concerns, and that the technology and the rules on how the data is used are still developing.

Questions to ask before you enrol

Based on the NAIC's consumer guidance, ask each insurer:

Exactly which behaviours are measured, and which ones affect the price?
Can my rate increase because of the data, or can it only earn a discount?
What device or app is used, and does it track location all the time or only while driving?
Who can see the data, how long is it kept, and is it shared or sold?

Choosing a car that is cheaper to insure

The car a new driver uses affects both the premium and the odds of walking away from a crash. In general, a moderately priced, mid-sized vehicle with strong crash-test ratings and modest power costs less to insure than a sports car, a luxury model or a very new, expensive vehicle.

The Triple-I lists the vehicle features insurers look at: the cost of the car, the likelihood of theft, the cost of repairs, engine size and the overall safety record. The NAIC notes that luxury and sports cars average a higher number of claims.

What safety researchers recommend for teens

IIHS publishes guidance on vehicle choice for teenagers. Its main principles are:

Avoid high horsepower. Powerful engines can tempt young drivers to speed.
Bigger and heavier is safer, within reason. IIHS advises against very small cars for teens, and its recommended used vehicles all have a curb weight above 2,750 pounds. It also advises against the largest SUVs, which are harder to handle and stop.
Electronic stability control is essential. It helps a driver keep control on curves and slippery roads.
Pick the best crash-test ratings you can afford. IIHS's "best choice" used vehicles earn good ratings in key crash tests and have standard automatic emergency braking.
Check for recalls. IIHS reminds buyers to check a used car's vehicle identification number (VIN) for unrepaired safety recalls before buying.

Insurance tips when buying a car

Get quotes before you buy. Ask for quotes on two or three specific models, using the VIN if you can. The differences can be large for a new driver.
Remember the lender. A financed car normally has to carry collision and comprehensive, which raises the cost.

Adult first-time drivers and no prior insurance

An adult who is newly licensed usually pays less than a teenager but more than someone of the same age who has driven for years. The same applies to people who have had a licence for a long time but no insurance in their own name. The insurer is pricing missing information: no record of claims-free driving and no record of continuous coverage.

Why "no prior insurance" costs more

Many insurers treat continuous prior coverage as a sign of lower risk, and the NAIC lists prior coverage cancellations among the factors that affect premiums. A driver with no previous policy cannot show that history. That is common and legitimate if you:

have just been licensed;
lived in a city and did not own a car;
were listed on a parent's or partner's policy rather than holding your own;
have recently moved to the United States.

How to reduce the penalty

Document any coverage you did have. If you were a listed driver on someone else's policy, ask that insurer for a letter confirming the dates and your claims record. Some companies will give credit for it.
Do not let the first policy lapse. Once you are insured, a missed payment can cancel the policy and create exactly the kind of gap that raises future prices.

Non-owner policies

A non-owner policy is liability insurance for a person who drives but does not own a car. It generally pays for injuries and damage you cause to others while driving a borrowed vehicle. It typically does not pay for damage to the car you are driving or for your own injuries, unless optional coverages are added.

A non-owner policy can suit a new driver who:

often borrows cars from friends or relatives outside their household;
wants to build a record of continuous insurance before buying a car;
must file proof of financial responsibility, such as an SR-22, but owns no vehicle. The Texas Department of Public Safety, for example, tells drivers without a vehicle to ask an insurance provider about a Texas non-owner SR-22 policy.

It is usually not the right product if you live with the owner of the car you drive regularly. In that case, insurers normally expect you to be listed on the owner's policy. Policy terms differ between companies, so ask what is covered, whose insurance pays first when you borrow a car, and whether rental cars are included.

If no insurer will cover you: assigned risk plans

If you are turned down, you still have options. First try other insurers, including companies that specialise in higher-risk drivers. If that fails, every state has a last-resort mechanism, often called an assigned risk plan or automobile insurance plan, that makes sure a licensed driver can buy at least the legally required coverage.

The Triple-I describes the steps in order:

Call another insurer. The Triple-I says that if you are denied insurance, the first step is to call another insurer, because different companies have different rules.
Try the non-standard market. Some insurers specialise in drivers with poor records, high-performance cars or other features standard companies avoid. An independent agent or your state insurance department can point you to them.
Apply to the assigned risk plan. In these plans, each insurer must accept the motorists the state assigns to it. Your agent or your state insurance department can tell you how to apply.

There are trade-offs. The Triple-I warns that premiums in an assigned risk pool are substantially higher than insurance bought directly from a private company, and the coverage may be more basic. The plan is a bridge, not a destination. Keep a clean record, pay on time, and shop the regular market again at each renewal.

International licence holders and newcomers

Visitors can often drive in the US for a limited time on a valid foreign licence, sometimes together with an International Driving Permit (IDP), but the rules are set by each state. People who move to the US to live will normally need a licence from their state, and insurers usually price a state-licensed driver more favourably than one with only a foreign licence.

USA.gov, the federal government's information site, makes these points:

Citizens of some countries do not need an IDP to drive legally in the US, and requirements vary by state. Check with the motor vehicle department of each state you plan to drive in.
The US does not issue IDPs to foreign visitors. You must get one from the motor vehicle authority in your home country before you travel.

Insurance points for newcomers

Foreign driving history may not count. Many US insurers cannot verify a record from another country, so an experienced driver from abroad may be rated as new. Bring an official driving record and a letter of claims history from your previous insurer, and ask each company whether it will consider them.
Students. International students should check whether they need a car at all. If you are still planning your budget, our guide on how to pay for studying abroad covers the wider costs.

SR-22 basics after serious violations

An SR-22 is not a type of insurance. It is a certificate that your insurer files with the state to prove you carry at least the required liability coverage. States typically require one after serious problems, such as driving without insurance, a licence suspension or certain convictions.

Each state has its own rules, and a few use different form names. As one example, the Texas Department of Public Safety describes the SR-22 as a Financial Responsibility Insurance Certificate that verifies you are maintaining motor vehicle liability insurance. In Texas, an SR-22 is required for situations such as a licence suspension due to a crash, a second or subsequent conviction for driving without liability insurance, or an unpaid civil judgment. Texas requires the SR-22 to be kept in force for two years from the date of the conviction or judgment that triggered it.

Key points for a young driver who is told to file one:

Your insurer files it. Not every insurer offers SR-22 filings, so you may have to change company.
Do not let it lapse. The Texas DPS warns that driving privileges and vehicle registration may be suspended if the state is told that the SR-22 on file has been cancelled, terminated or has lapsed. Insurers notify the state when a policy ends.

What to do after a first accident or ticket

After a crash, make sure everyone is safe, call for help if anyone is hurt, exchange the necessary details, document the scene and tell your insurer promptly. After a ticket, read it carefully, note the deadline and understand your options before you pay, because paying is usually treated as admitting the violation.

After an accident

Stop and check for injuries. Call emergency services if anyone is hurt or the road is blocked.
Exchange information. Names, contact details, insurer and policy number, licence plate, and the make and model of each vehicle. The NAIC advises against sharing your driver's licence number with other drivers after an accident; give your insurance details instead.
Document everything. Photos of all vehicles, the road, signs and any injuries. Names and numbers of witnesses.
Notify your insurer quickly. Policies require prompt notice. If you are on a parent's policy, tell them immediately.

After a ticket

Do not ignore it. A missed deadline can lead to extra fines or a suspended licence, which is far worse for insurance than the ticket.
Expect a review at renewal. Insurers check driving records, and a serious violation will almost certainly raise the price.

How rates change with age and a clean record

Premiums for young drivers generally fall as they gain experience and stay claim-free, with the price pressure easing through the early twenties. The Triple-I describes drivers under 25 as the group insurers commonly charge more. There is no single birthday on which rates drop for everyone. Each insurer has its own schedule, and your record matters as much as your age.

Life changes are natural moments to compare quotes again: a birthday, a year of clean driving, graduation, a new address, marriage, a different car or an improved credit file. Insurers do not always apply every improvement automatically, so ask.

How to shop and compare quotes, step by step

The most reliable way for a new driver to save money is to compare several quotes for exactly the same coverage. The NAIC advises consumers to shop around and to give identical information to every agent or company so that comparisons are accurate.

Gather your information. The NAIC's auto shopping guidance says to collect details about your driving history, vehicles and household before you start. You will need each driver's licence number and date first licensed, the VIN of each car, the address where the car is kept, estimated annual mileage, and any tickets, accidents or claims.
Decide your coverage first. Choose liability limits, whether you need collision and comprehensive, and a deductible you could actually pay. Write it down so every quote uses the same figures.
Get at least three to five quotes. Mix sources: companies that sell directly, a company with its own agents, and an independent agent who can quote several insurers. California's regulator tells consumers to always get several quotes, because costs vary significantly even within the same area.
Quote both ways for a teen. Ask for the price of adding the teen to the family policy and the price of a separate policy.
Compare the total cost. Look at the premium for the full term, any policy or instalment fees, and the down payment.
Check the company. Confirm the licence and look at complaints before you pay. The next section explains how.
Read before you sign. The NAIC reminds consumers that a policy is a legal contract. Check the listed drivers, vehicles, address, limits and deductibles on the declarations page.
Do not cancel the old policy first. If you are switching, start the new policy before the old one ends so there is no gap.

Checking an insurer's licence and complaints

Before you pay, confirm that the company and the agent are licensed in your state, and look at the company's complaint record. Both checks are free and take a few minutes.

Licence. The NAIC advises verifying that an agent and company are licensed through your state insurance department before you buy, and warns that it is illegal for unlicensed insurers to sell insurance. Each state insurance department has a licence lookup on its website.
Complaints and financial information. The NAIC's Consumer Insurance Search tool lets you look up an insurance company and find information about complaints, licences and financial health. Search for the exact legal company name shown on the quote, because large groups contain many similarly named companies.

If something goes wrong

The NAIC recommends trying to resolve a problem with the insurer first. If you are still unhappy, for example over a denied claim, a delay or a cancellation you believe is unjustified, you can file a complaint with your state department of insurance. Most departments accept complaints online, by mail or by phone. Have your policy number, copies of relevant documents and a dated record of every contact with the insurer, and state the outcome you want.

A short note for UK readers

In the UK, motor insurance is a legal requirement, young drivers face the highest premiums, and black box policies are a common way to bring the cost down. Naming a parent as the main driver of a car that a young person mainly drives is called fronting, and it is fraud.

The legal minimum. GOV.UK states that you must have motor insurance to drive your vehicle on UK roads, and that third party cover is the legal minimum. It covers damage or injury to other people, vehicles, animals or property, but not your own vehicle.
Penalties. According to GOV.UK, police can issue a fixed penalty of £300 and 6 penalty points for driving a vehicle you are not insured to drive. If the case goes to court, you can get an unlimited fine and be disqualified from driving. Police can also seize, and in some cases destroy, the vehicle.
New driver rule. GOV.UK says your licence will be cancelled if you get 6 or more points within 2 years of passing your test. Because driving uninsured carries 6 points, a single insurance offence can cost a new driver the licence, and they would then have to apply for a provisional licence and pass both the theory and practical tests again.
Fronting. The MIB and the Financial Ombudsman Service describe fronting as a more experienced driver, such as a parent, claiming to be the main driver of a vehicle that is mainly used by a younger driver. The MIB says the consequences can include the policy being cancelled, being added to the Insurance Fraud Register and much more expensive insurance in future. The honest version is fine: the young person is the main driver, and a parent is added as a named driver.
Black box (telematics) policies. The MIB lists a telematics policy that rewards safe driving as a legitimate way to reduce cost. But the Financial Ombudsman Service reported in March 2026 that it received more than 1,200 car insurance complaints from drivers under 25 during 2025, and that telematics complaints involved mis-selling, data collection problems, unexpected price rises linked to driving scores, and cancellations, including cases where a car sat unused while the driver was at university. Read the terms on curfews, mileage and minimum use before you buy.

A short note for Canadian readers

In Canada, car insurance is mandatory and regulated by each province and territory, so both the rules and who sells the mandatory coverage depend on where you live.

Public and private systems. The Insurance Bureau of Canada (IBC) explains that in British Columbia, Manitoba and Saskatchewan the mandatory coverage is bought from a government insurer. Quebec has a hybrid system: the Financial Consumer Agency of Canada (FCAC) notes that Quebec residents are covered for injury or death by the province's public plan, while property damage coverage is bought from private insurers. In other provinces and territories, private insurers sell auto insurance.
Mandatory coverage. Minimum third-party liability amounts are set by each province. IBC's summary shows a minimum of $200,000 in most provinces, with different amounts in a few, including a lower minimum in Quebec and higher minimums in Manitoba and Nova Scotia. Most provinces also require accident benefits and uninsured automobile coverage.
Rating factors. FCAC lists age, gender, where you live, marital status for young drivers, the vehicle, how much you drive, your driving record, claims history, coverage and deductible. It notes that credit scores may be used in certain provinces and territories.

Common mistakes

Most expensive mistakes by new drivers come from chasing the lowest price without checking what it buys, or from giving the insurer inaccurate information.

Buying only the state minimum without thinking. Minimum limits can be exhausted by one moderate crash.
Not telling the insurer about a newly licensed household member. This can lead to a denied claim.
Naming the wrong main driver. Listing a parent as the main driver of a car the young person drives most is misrepresentation in the US and is treated as fraud in the UK.
Letting the policy lapse. A gap can mean fines, licence or registration suspension, and higher prices later.
Never re-shopping. The price you get at 17 or in your first year licensed should not be the price you pay three clean years later.

New driver's checklist

Check your state's minimum insurance requirements on the state insurance department or DMV website.
Tell the family's insurer as soon as a household member gets a permit or licence.
Check crash-test ratings and recalls before buying a car, and get insurance quotes on specific models first.
Get at least three to five quotes with identical coverage.
For teens, compare the cost of joining a parent's policy with a separate policy.
Ask each insurer for its full list of discounts and whether it uses credit information.
Ask whether a telematics program can raise your rate and how your data is used.
Verify the insurer and agent are licensed, and check complaints through the NAIC and your state.
Re-shop at each renewal and after any major life change.

FAQ

Why is car insurance so expensive for young drivers?

Because young drivers crash more often. IIHS reports that teen drivers have crash rates over 4 times those of drivers 20 and older per mile driven, and the CDC says the fatal crash rate for 16 to 19-year-olds is almost three times that of drivers 20 and older. Insurers price on expected claims, and a new driver has no record yet to show they are safer than the group average.

At what age does car insurance go down?

There is no single age. Premiums usually fall gradually with each year of clean driving, and the Triple-I describes drivers under 25 as the group insurers commonly charge more. Each company uses its own schedule, so the fall may come at different points with different insurers. Compare quotes after each clean year rather than waiting for a particular birthday.

Is it cheaper to add a teenager to a parent's policy or buy a separate policy?

Adding a teen to a parent's policy is generally cheaper. The Triple-I states this directly, and the household may also keep multi-car discounts. Get both prices to confirm, because a teen with a serious violation can sometimes make a separate policy worth considering.

Does a teenager with a learner's permit need insurance?

The car must be insured whenever it is driven. Many insurers extend the parents' policy to a permit holder, sometimes without an extra charge until the teen is licensed, but practices differ. Call your insurer when the permit is issued and ask how it handles permit holders.

Can I get car insurance with no credit history?

Yes. Having no credit history does not stop you from buying car insurance. In states that allow credit-based insurance scores, a thin file may mean you miss the best price tier, and companies treat it differently. Ask each insurer how it handles applicants with no credit file and compare several quotes. Some states restrict the use of credit; California's rating rules, for example, focus on driving record, mileage and years of experience.

What is the cheapest type of car insurance for a new driver?

A liability-only policy at your state's minimum limits has the lowest premium, but it is also the weakest protection: it pays nothing for your own car and may not cover a serious injury claim. A better target is the lowest price for coverage you can live with. That usually means reasonable liability limits, a deductible you can afford, a modest car and every discount you qualify for.

Can I get car insurance without owning a car?

Yes. A non-owner policy provides liability coverage when you drive cars you do not own. It can help you keep continuous coverage or meet an SR-22 requirement. It usually does not cover damage to the borrowed car, and it is not meant for a car owned by someone in your own household that you drive regularly.

What happens if no company will insure me?

Try other insurers first, then companies that specialise in higher-risk drivers. If you still cannot get coverage, your state's assigned risk plan or automobile insurance plan will assign you to an insurer that must provide at least the required coverage. The Triple-I warns that these premiums are substantially higher, so treat the plan as temporary and re-shop at each renewal.

Do black box or telematics policies really save money?

They can for careful, low-mileage drivers, but savings are not guaranteed. The NAIC notes that usage-based insurance can also lead to higher premiums, and the UK Financial Ombudsman Service has reported complaints about unexpected price rises and cancellations on black box policies. Ask whether your rate can go up, what is measured and how the data is used.

Will one speeding ticket raise my insurance?

It may. Insurers review driving records at renewal, and a moving violation often leads to a higher premium for a few years, though some insurers overlook a single minor ticket. Ask the court whether you are eligible for traffic school, and avoid a second violation, which usually matters far more.

Is it legal to put the car in my parent's name to pay less?

Who owns the car and who is the main driver are separate questions, and both must be answered truthfully. A parent can legitimately own and insure a car that a teen in the household drives, as long as the teen is listed and correctly described. Stating that the parent is the main driver when the young person really is counts as misrepresentation. In the UK this is called fronting, and the MIB describes it as fraud that can lead to a cancelled policy and an entry on the Insurance Fraud Register.

How often should a young driver shop for car insurance?

At least once a year, and whenever something significant changes: a clean year completed, a move, a new car, graduation or a change in who lives in the household. Always compare quotes with identical coverage, and start the new policy before ending the old one.

Bottom line

New drivers pay more because the risk is real and their track record is blank. Stay on a family policy while it is allowed and honest to do so, choose a safe, modest car, and use the discounts you genuinely qualify for. Compare several quotes with identical coverage, check that the insurer is licensed, and never let the policy lapse.

If you have no credit history or no prior insurance, expect a higher first price and wide differences between companies. If you are turned down everywhere, your state's assigned risk plan is there as a safety net. And if you work on your wider finances at the same time, for example by following the steps in our guide on how to improve your credit score, the price you are offered in most states should improve as your record does. Each clean year works in your favour.

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