Many newcomers get their first car insurance quote and think it’s a mistake. It often isn’t. Car insurance in the US can be expensive, and drivers without a US driving record usually pay more at the start.
Premiums fall as you build history, and you can take steps now to lower them.
Why it costs more for newcomers
Insurers set prices based on risk. They look at your driving record, claims history, where you live, the car, your age, how much you drive and, in many states, a credit-based insurance score. As a newcomer, you may have:
- No US driving record
- No US insurance history
- No US credit history
- A new state driver’s license
To an insurer, missing information often means higher risk, and a higher price.
What coverage is required
Almost every state requires liability insurance. Requirements vary, but the main types of coverage are:
| Coverage | What it pays for | Required? |
|---|---|---|
| Bodily injury liability | Injuries you cause to others | Required in most states |
| Property damage liability | Damage you cause to others’ property | Required in most states |
| Uninsured/underinsured motorist | Your costs if the other driver lacks insurance | Required in some states |
| Personal injury protection (PIP) | Your medical costs, regardless of fault | Required in no-fault states |
| Collision | Damage to your car in a crash | Usually required if you have a car loan or lease |
| Comprehensive | Theft, weather, fire, hitting an animal | Usually required with a loan or lease |
State minimums are often low. Many people choose higher liability limits because a serious accident can cost far more than the minimum covers.
10 ways to lower your premium
1. Bring your foreign driving record
Some insurers will consider driving history from abroad, especially from certain countries. Ask for a letter from your previous insurer showing years insured and any claims, translated into English if needed.
2. Get a US license quickly
Many insurers price you better once you have a state license. The clock on your US experience starts then.
3. Shop around
Prices differ a lot between companies for the same driver. Get at least three quotes, including from insurers that work with newcomers or offer telematics programs.
4. Choose the car carefully
Insurance for a sports car or a car often stolen can be much higher. Get quotes for specific models before you buy.
5. Raise your deductible
A higher deductible on collision and comprehensive lowers your premium. Just make sure you could pay it after an accident.
6. Try a usage-based or telematics program
Many insurers offer discounts if you share driving data through an app or device that tracks braking, speed and time of day. Careful drivers can save significantly.
7. Bundle policies
Buying renters and car insurance from the same company often earns a discount.
8. Ask about discounts
Common discounts include good student, safe driver course, paying in full, automatic payments, paperless billing, low mileage and anti-theft devices.
9. Consider being added to someone else’s policy
If you live with a family member or partner who has insurance, being added to their policy may cost less than your own. You must live at the same address, and the policy must list you correctly.
10. Build credit
In most states, insurers can use credit-based insurance scores. As your credit improves, your premium may drop at renewal.
What to avoid
- Driving uninsured, which can bring fines, license suspension and huge costs after an accident
- Listing a false address to get a cheaper rate, which can void your coverage
- Choosing only state minimums without understanding the risk
- Letting coverage lapse between policies, which can raise future prices
Renting or sharing cars
If you use car rentals or car-sharing, check what coverage you get. Some credit cards include rental car coverage, but usually secondary and only for collision damage, not liability.
After an accident
- Check for injuries and call 911 if needed
- Move to safety if possible
- Exchange names, phone numbers, license and insurance information
- Take photos of the vehicles, scene and any damage
- Don’t admit fault at the scene
- Report the claim to your insurer quickly
Your price will fall over time
Most newcomers see premiums improve after six to twelve months of clean driving and continuous insurance. Review your policy at each renewal and get new quotes every year.
Sample quote comparison
When you get quotes, compare the same coverage from each company. Otherwise, the cheapest quote might just be the least coverage.
| Company A | Company B | Company C | |
|---|---|---|---|
| Liability limits | 100/300/100 | 100/300/100 | 100/300/100 |
| Collision deductible | $1,000 | $1,000 | $1,000 |
| Comprehensive deductible | $500 | $500 | $500 |
| Uninsured motorist | Yes | Yes | Yes |
| Accepts foreign driving history | Yes | No | Partially |
| Telematics discount | Up to 20% | None | Up to 30% |
| 6-month premium | $1,380 | $1,720 | $1,290 |
“100/300/100” means $100,000 bodily injury per person, $300,000 per accident, and $100,000 property damage.
Understanding liability limits
State minimums can be very low. If you cause a serious crash, medical bills and damages can quickly exceed those limits, and you could be personally responsible for the rest. Higher limits often cost only a little more per month. Some drivers also buy an umbrella policy for extra protection once they have assets.
New car vs. used car
- Financed or leased cars require collision and comprehensive coverage
- Older paid-off cars may not need collision coverage if the car’s value is low
- Gap insurance covers the difference between what you owe and the car’s value if it’s totaled, useful for new cars with small down payments
Insurance for international students
Students who drive can often lower costs with good student discounts, low-mileage discounts and by choosing a modest car. If you share a car with a roommate, make sure you’re listed on the policy; being unlisted can cause claim problems.
Keep your record clean
Tickets and accidents raise premiums for three to five years in many cases. Drive the speed limit, never use your phone while driving, and never drive after drinking. A clean first year in the US is the fastest way to lower your insurance costs.
Renewal checklist
At each renewal:
- Check that drivers, cars and addresses are correct
- Ask whether your new US history qualifies you for a lower rate
- Get two or three fresh quotes
- Review deductibles and coverage based on your car’s current value
Proof of insurance and state rules
Keep your insurance card in the car or in your insurer’s app. Police ask for it during traffic stops, and the DMV may ask for it when you register a vehicle. Some states electronically check that registered cars stay insured, and a lapse can lead to fines or suspended registration even if you’re not driving.
Driving someone else’s car
In many cases, insurance follows the car, so borrowing a friend’s car may be covered under their policy with permission. Regularly driving a car you don’t own, like a housemate’s, often means you should be listed on their policy. If you rent often but don’t own a car, a “non-owner” policy can give you liability coverage and help you build continuous insurance history.
Key terms at a glance
- Premium: what you pay for the policy, monthly or every six months
- Deductible: what you pay before insurance covers collision or comprehensive damage
- Liability limits: the most the insurer pays for damage you cause to others
- Telematics: an app or device that tracks driving habits for discounts
- Lapse: a gap in coverage, which can raise future prices
