An 18-year-old falls into the riskiest group of drivers. Accidents are the leading killer for people aged 16 to 20, and insurance prices are high as a result. Because of inexperience, an 18-year-old is more likely to have an accident than someone older than 25, when insurance rates start to decrease. The best car insurance policy for an 18-year-old offers the best protection that's still affordable.
Understanding Your Options
You need at least your state's required liability insurance to register your car. Liability insurance pays for damages you cause to property or other people (excluding your vehicle or passengers) when you have an at-fault accident. The next step up in coverage is a comprehensive policy, which adds protection for your vehicle's repairs or pays its replacement value for accidents caused by instances other than collision, such as weather-related damages, fire, theft, vandalism or animal impact. Collision coverage includes comprehensive and liability coverage, but it also pays to repair your vehicle or replace it if you're at fault for damages. Leasing and financing providers require full coverage insurance.
Because of inexperience and the high risk of accidents for your age group, purchase higher limits for the liability portion of your insurance. State limits for bodily injury coverage, the portion that pays for damages caused to other people, are often too low to provide adequate coverage. If your state only requires $10,000 in bodily injury and $20,000 per accident, the policy won't pay more than $10,000 for one person's injuries and no more than two people per accident. Edmunds.com recommends that even experienced drivers should increase limits to $100,000 per person and $300,000 per accident. Increase your limits to as high as you can afford; otherwise, you're liable to pay for damages.
If you add comprehensive or collision coverage to your policy, offset the high price of your high insurance cost by increasing your deductible. A deductible, optional for either of these policies, is the amount of money you pay out-of-pocket for damages to your vehicle before insurance picks up the tab. For example, if your vehicle is determined a loss, and you receive a payout of $5,000 for your car, the deductible is subtracted from the payout. Increasing your deductible lowers your insurance cost. Keep in mind that you'll also have to pay out-of-pocket for repairs, so make sure the amount is affordable.
Insurance Company Choices
Being in the highest risk group, you'll pay more for your policy if you choose an insurance company that caters to low-risk drivers. Consider shopping insurance costs at a broker rather than an agent. A broker doesn't work for any specific company, as does an agent who's limited in selection and discounts. Instead, the broker works for his customer to find the lowest rates possible based on needs and cost. A broker can also recommend the best coverage options for your vehicle and make recommendations to help lower cost based on your state and insurance provider.