Younger drivers and insurance

Younger people tend to shun the necessity of insurance because it is seen as an added expense that isn't very worthwhile. With limited income, it's hard to see the risk-benefit analysis of having several different types of insurance. Because of youth and inexperience, insurance companies typically charge higher rates for younger drivers. This may be another reason why 20-somethings ignore coverage.

However, liability insurance is mandated in nearly 100 percent of states, and without it, drivers are susceptible to heavy fines and jail time. So if a policy is legally required, then it's important to get the best deal possible. Here are six ways you can lower your car insurance premiums today:

1. Increase deductibles
You only pay deductibles when a claim is filed. That means if you are a risk-averse driver, then you'll likely not have to pay this out-of-pocket expense often, if at all. By raising your deductible, your premiums will go down because you are essentially telling your provider that you will front a larger amount of money in the case of an accident, which will mean it will have to pay less to cover damages. This can be incredibly worthwhile because you could end up saving on insurance over the long run, and it provides an extra incentive to drive safely.

2. Shop around
It's necessary for drivers of all ages to do their research and shop for bargains. However, younger drivers have less experience negotiating prices and navigating the insurance market, which means they might be hesitant to get a lower rate. Speaking with several different insurance companies can give you a better idea of how much you should expect to pay on average. Don't settle for first estimates. Rather, approach a number of providers and ask about rebates and savings opportunities.

3. Stay on parents' plan
While it may seem like a good idea to spread your wings and purchase your own individual policy, remaining on your parents' plan can be a better option. Insurance companies offer discounts for more people under the same plan. This will keep your rates lower because you will benefit from having other safe drivers coupled with you, essentially providing a good reference in your name.

4. Consolidate coverage
Starting out, new drivers usually don't drive the fanciest cars. In fact, most start out with used vehicles, which can be a decade old, from secondhand dealers. If your car is only worth a couple of thousand dollars, then it doesn't make financial sense to purchase an extensive policy. As is the case of being underinsured, there are certain negative consequences of being overinsured as well. You probably don't need additional property, comprehensive or collision coverage because it could be cheaper to just buy a new car rather than pay for damages.

5. Improve credit
Drivers tend not to know how much of an impact credit scores can have on their insurance. Younger people in particular should make it a point to start out on the right foot when it comes to applying for credit and paying off their debts in a timely manner. Insurance companies do thorough background checks before settling on a quote. Having a higher credit score will garner you lower car insurance rates in most instances.

6. Look for discounts
Insurance providers have a plethora of discounts for safe drivers. Also, if you are a good student and have a certain grade point average, some companies will lower your premiums. If you drive infrequently or only short distances, you could be entitled to mileage discounts as well. Providers may not bring these items up in the first meeting, so you'll have to do your own research and ask about rebates upfront.

CoverHound is leading provider of car insurance quotes for drivers in the U.S.

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