What Car Insurance Coverage Do I Need?

Decide how much liability coverage is enough for similar type of drivers.

How much is car insurance for a 21 year old

Drivers falling under the age of 25 are in the high-risk group with regards to car insurance. Lack of driving experience statistically is considered as high risk and so the companies charge higher rates. There are few things for 21-year-olds to reduce the car insurance cost.

How your age, education, gender, credit score, vehicle, and location affect your premium?

The iconic part of a 21-year-old is that legally he can consume alcohol. However, from the perspective of insurance, the 21-year-olds account for more savings on insurance. On showing a good driving record, you can enjoy the lower premium. However, the male drivers pay more auto insurance than the female drivers.

Apart from this, there are few things taken into consideration for 21-year-olds before arriving at an insurance rate and they are:

  • age - example, insurance for 21year old drivers $1,700, for 20 - $1,900, for 22 - $1,650;
  • education - if at the age of 21 you are not a student, then auto insurance will be slightly more expensive for you than, for example, for bachelors, masters or phd students (you save 10-30$);
  • gender - for male insurance is cheaper by $ 150;
  • credit score - the better you have a credit score - the less you pay for insurance (Excellent score - $1,150, Poor score - $2,400)
  • vehicle - choose sedan or van if you want save money
  • location - Louisiana - $8,500 vs. Kentucky - $4,800.

What types of cover are available?

A minimum cover is required by the most state before you hit the road, regardless of the age. A few choices as coverage options include:

  • Liability: This refers to liability coverage that covers in an accident if you are at fault and have to pay the costs. Except for Iowa, New Hampshire, and Virginia, all states except you to have liability insurance.
  • Collision: The liability insurance pays the costs of other drivers in an accident when you are at fault. You need collision coverage for your vehicle repairs and it pays the costs for the damaged vehicle.
  • Comprehensive: This covers damages taking place beyond your control such as falling objects, damage from theft or animals, natural disasters and so on.
  • Medical Payments: This helps in medical costs in an auto accident, regardless of who is at fault. The cover pays for ambulance fees, dental care, surgery, hospital visits and funerals.
  • Gap Insurance: This covers in case your car is totaled or stolen and you owe a loan more than the worth of your car.
  • PIP (Personal Injury protection: PIP pays medical services required in a car accident if you are involved and this includes lost income, nursing care, ambulance fees, child care and also funeral services, regardless of who causes the accident.
  • Bodily injury liability: The costs for injuries caused are paid by the insurer to another person and this includes legal help, immediate medical assistance, health care and funerals. Bodily injury liability cover will not pay your medical cost and if you need, you have to use your health insurance.
  • Property damage liability: The cover will pay damages caused to the property of someone else and include repairs for the vehicle, building, fences, houses, legal fees from damage claims of property and lost income due to business closure, but our property damage is not paid and for that, you require collision coverage.

Adding yourself to your parents' policy

The 21-year-old car insurance is best to add yourself to your parent’s policy. Especially, if you share the same car of your parents and they are willing to include you in their existing cover, you may add your name as a nominated driver for their car policy.

The premiums will surely increase, yet the added cost is not more than the 21-year-old taking a separate policy.

How can you save?

Car insurance for a 21-year-old may be expensive. This is because the insurers consider your lack of driving skills, no driving history, and young age while calculating the premium. Here are few ways that you can save:

  • Complete an advanced road safety and driving course. This ensures discounted premiums.
  • Minimize the extra features added in the policy and keep the insurance costs down.
  • Consider higher deductibles. Choose the deductible that you pay as you claim. This will slash higher premiums.
  • Fit your car with safety features such as anti-theft device and traction control. Keeping cars in locked garages also are cheaper.
  • Clean driving record. The driving history is considered and so avoiding speeding fines also helps in keeping the costs down.
  • Pay annually than monthly covers, it works cheaper.
  • Buy online. Premium discounts are offered on policy bought online than over the phone.

Compare policies and find ways for a 21-year-old to save money on car insurance. Compare the features, benefits, and limits of different policies to save hundreds of dollars.

Traps to avoid with under-21 car insurance

A few issues must be understood before you purchase car insurance for under 21and the traps to avoid include:

  • Paying monthly means the charges are extra. Consider paying annually or find an insurer who does not charge more for paying monthly.
  • Comparing insurance policies is a must before indulging in purchasing the cover. This helps in finding affordable cover and also meets your needs.
  • Fronting is a term used when you can list some older person or a parent as the main driver. This helps in avoiding high premiums. However, there is a threat that it can be considered illegal and lead to refusal of claims.
  • Ignoring deductible is most likely. But remember a cheap policy may offer low premiums and high with huge deductible during a claim.
  • Not reviewing policy is a mistake. Review the cover offered and acquire quotes to know if there is the better deal available elsewhere and switch over if essential or bargain with the existing insurer for more benefits.

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