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Auto Insurance for Newly Licensed U.S. Immigrants

by Brian O’Connell

For newly-minted U.S. immigrants, tracking down the best auto insurance deal isn’t at the top of the “to do” list when taking their hopes and dreams to America.

That’s understandable, as acclimating to a new country has its priorities, including finding a home, landing a new job, and engaging with a new community and new neighbors.

Once the big items are checked off the list, getting a good auto insurance policy should be a priority. It’s a ticket to government-approved license to drive your vehicle to work, to play, and to personal obligations and appointments.

Go into that process with your eyes wide open to the unique challenges immigrants face when they go for their first auto insurance policies.

“The first issue a new US immigrant would face in terms of driving is that his or her previous driver’s license won’t be recognized in the new country,” said Adam Grant, founder of Car Fuel Advisor, in Indianapolis, In. “This means he or she will have to incur some costs for becoming qualified. Secondly, the language barrier can make it a hard task to understand the local public transit services.”

newly licensed immigrant car insurance

How to Find Car Insurance as a U.S. Immigrant

Where should a new U.S. immigrant start on landing a good auto insurance deal? Ideally, with knowledge of what it takes to get good auto insurance.

For starters, know that the average cost of car insurance is $1,700 annually. Reducing that amount and still getting good value means understanding the factors that go into any auto insurance rate calculation.

Those factors include the state where the immigrant resides, the amount of coverage requested, personal driving history, and the make and model of the vehicle driven.

Once you have a good idea of the key factors that influence an auto insurance policy, check with your U.S. state of residency to see where you stand as a U.S. driver.

  • If you’re an immigrant who has cleared all the hurdles to becoming a U.S. citizen, you’re automatically cleared for a driver’s license.
  • If you’ve entered the country without legal permission, your state of residence may not allow you to get a driver’s license. Without a legal driver’s license, you can’t get auto insurance, as insurers check to see that an applicant holds a legal driver’s license. On the upside, any visitor to the U.S. with a Green Card (which signals the visitor is in the U.S. with Uncle Sam’s permission) can qualify for a driver’s license.

“Some states allow undocumented immigrants to have a license so that they can buy car
insurance,” said Nick Schrader, an insurance agent with Texas General Insurance. “Until you’re licensed and insured, it’s illegal to drive. You can apply for a license like any other person. Go to the Department of Motor Vehicles (DMV), take the education courses, and complete an on-road test.”

Also make sure to provide the exact address where you reside when you apply for auto insurance. “Additionally, make sure you your vehicle’s title and registration are in compliance with state laws,” said Renata Castro, owner of Castro Legal Group, in Coral Springs, Fla.

To see if your state allows immigrants who are in the U.S. without permission offers drivers licenses, check with the National Conference of State Legislators’ web site that lists all 50 U.S. states and their policies on immigrants and drivers licenses.

How to Get the Best Auto Insurance Policy for Immigrants

As most immigrants are unfamiliar with how U.S. state insurance policies work, it’s worth getting to know several useful short cuts that can pave the way for a solid auto policy. These moves should be at the top of that list.

  • 1. Have your paperwork in good order. – The number one reason immigrants without status get into trouble is related to lack of a driver’s license, or auto insurance,” Castro said. “Make sure to keep your insurance compliant with state laws and ensure you drive with your registration valid and other required documents such as car title. Also, consider moving to a state where you can obtain a driver’s license if you do not have lawful immigration status.”
  • 2. Be quick on the driver’s license. – For citizens who can obtain a driver’s license because they are in the US legally, make sure that you do so as soon as you can, to avoid incurring legal violations which could strip you of your immigration benefit, such as your green card or visa.
  • 3. Don’t rush the job. “Try not to jump at the first insurance policy you see. “Make sure to research at least thee or four insurance and compare which policy fits you best,” Schrader said.
  • 4. Look for lenient insurance companies. One big issue that new U.S. immigrants face is that they lack driving history, which means that they’re considered high-risk drivers.

“This means that many insurers will have higher insurance rates than more experienced drivers, even if they drove in their previous country of residence,” said Aliza Vigderman, director of content at AutoInsurance.com. “This will be the case for the first three years of an immigrant’s auto insurance policy experience. After that, insurers let up and that problem goes away with a good driving record.”

In the meantime, look for companies that accept substandard drivers like State Farm, Direct Auto, and National General. “Be sure to compare rates between multiple providers,” Vigderman said. If you need help comparing auto insurance rates, iQ is here to help!