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No driving record, no cheap insurance


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Question: I was an international student, but now I have obtained a visa and am working in the U.S. I obtained a U.S. driver’s license about a year and a half ago. I want to purchase a new car soon.  I did a quick scan of insurance quotes and found them to be exorbitant. I had an excellent driving record in my home country and have been driving for over 10 years. How do I get reasonably priced insurance coverage?

Answer: You’ll have to shop around and compare rates with various car insurance companies to find the best-priced policy for your needs.  For finding much cheaper insurance rates, that may take time.

Car insurance companies attempt to charge each motorist the appropriate rate for the risk that individual poses.  Simply put, if you appear to be more of a risk to insure, you will pay more for your car insurance policy.

You don’t have a verifiable driving record or likely a long credit history here in the U.S.  These are both rating factors that are important to car insurance companies in most states.

While you have 10 years of driving experience in your home country, this driving history isn’t verifiable by U.S. car insurance companies. Since your driving record can’t be confirmed, you’re considered to a new driver by auto insurers. 

New drivers receive a surcharge for inexperience.  The amount of the surcharge varies by insurer -- another good reason to shop around.  The good news is that the surcharge doesn’t last forever. 

Typically, this will only last until you have a U.S. driving record for three years.  So, if you’re able to keep a clear record (no traffic violations or accidents), then, in time, your rates should be lowered to a more affordable amount.

The same is true in regards to your credit history. If you buy a new car, pay your bills on time and build up a good credit rating, then that, as well, should have a positive effect on your car insurance rates.

More good news is that even with being considered a new driver, you still should be eligible for some discounts.

For instance, if you buy a car with safety and anti-theft features, then you should receive discounts on certain coverages for these items.  Paying your auto insurance policy in full and signing up to receive your documents online can also get you discounts with many car insurance companies.  

You may even want to try out a pay-as-you-drive (PAYD) program.  For allowing the auto insurer to monitor your driving behavior, you may be eligible for a discount.  (See “Guide to PAYD insurance programs”)

Since you want to buy a new car, it’s important to do what you have been doing, checking rates before you actually purchase a vehicle.  You don’t want to buy a vehicle only to realize that you can afford it, but not its car insurance policy.

Comparison shopping will allow you to weed out car insurance companies that don’t accept new business from drivers who haven’t previously been insured in the U.S. or lack a driving history.

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