Everyone starts as a new driver, either in one’s teenager or adulthood. Needless to say, new drivers lack driving experience and an established driving record. However, driving experience and history is a major factor when determining your car insurance rate. Without knowing how good or bad your driving is, insurance companies lack sufficient knowledge of foreseeable risks associated with insuring you. Therefore, they tend to charge more when you have limited driving experience. Most of them actually have an “inexperienced driver surcharge” for three years. It’s a charge exposed on top of your regular premium. Insurance companies use this way to protect themselves from big financial losses before any unforeseeable risks kick in.
As new drivers, most likely you will get the highest premiums rates of all drivers on the road. I like to think this as a “growing pain”. It’s not a shame to say you are a new driver. Most important thing is to be a responsive and defensive driver from the beginning. Once you establish a good driving record, with no accidents or claims, your rate is going to drop a lot. Even though you probably cannot get a car insurance from major insurers, there are some insurance companies that cater to high risk drivers and offer affordable coverage. If you are a parent and want to help your teenager get their first car insurance, it’s a good idea to add them to your policy first. There are also some discounts for high risk drivers as well. Be sure to ask the insurance representative.
It’s the same story with applying for your first credit card and building your credit history. At first, you may be required to put in a “Certificate of Deposit’ which you can not use until one year later. After this “growing pain” period, days are brighter and sunnier!
So in a nutshell, the longer you have driver license, the cheaper your car insurance can be, provided that all other factors are the same. When getting a quote, you will be asked what was your age when you first get licensed or how many years of driving history you have. However, in the state of California, the application does not have a filed for “date originally licensed”. It’s only allowed to ask the issue date of the current license. This of course does not tell insurance companies whether or not you had a prior license and for how long. So the insurance company will automatically think 16 was your year when you got your driver license unless you say something different. However, even if you can get away with longer driving history by telling them you get licensed at 16 when the fact is not, your policy can be voided if the insurance company find out the truth later.
Having years of driving experience is definitely helpful in terms of decreasing the car insurance rate. But once you become a senior, your rate starts to increase again. It may be 55 or 60 years old threshold depending on the insurance company.