Alyssa Lane
What is the Best Auto Insurance for Young Drivers?
Young or first-time drivers often face high auto insurance premiums due to their lack of driving experience, which is seen as a risk factor by insurance companies. The best auto insurance for young drivers will therefore be affordable and tailored to their needs.
Cost of Auto Insurance for Young Drivers
Auto insurance for young drivers can be expensive, with rates depending on factors such as age, gender, location, and driving experience. The average cost of adding a teen driver to a full-coverage, two-adult policy is $3,824 per year, according to NerdWallet. For a one-adult policy, the average cost is $2,711 per year. Male teenagers tend to pay higher rates than females due to higher accident rates.
Best Auto Insurance Companies for Young Drivers
The best auto insurance companies for young drivers offer affordable rates, various discounts, and robust coverage options. Here are some of the top options:
- Travelers Insurance: Offers the cheapest quotes for teen drivers, with an average annual rate of $1,249.
- USAA: Provides inexpensive coverage for eligible military members and their families, with an average annual rate of $1,289.
- Geico: Offers competitive rates and numerous discounts, including good student and driver's education discounts.
- State Farm: Boasts excellent customer satisfaction scores and affordable full-coverage premiums for young adults.
- Nationwide: Provides highly customizable coverage options and usage-based programs to help young drivers save.
- Progressive: Appeals to young drivers who prefer digital tools, with a highly-rated mobile app and website.
- Auto-Owners Insurance: Offers affordable premiums, high customer satisfaction scores, and multiple discount programs for young drivers.
| Characteristics | Values |
|---|---|
| Company | Liberty Mutual, State Farm, USAA, Geico, Erie Insurance, Auto-Owners, Progressive, Nationwide, The Hartford, AAA, Esurance |
| Discounts | Good student, driver training, student away at school, safe driving, multi-car, multi-policy, accident forgiveness, usage-based, distant student, young driver safety training, alumni association, roadside assistance, gap insurance, pay-per-mile insurance, bundling policies, membership savings, safety features, driver's education, defensive driving course, safe driver, telematics |
| Average Annual Premium | $1,249-$3,535 |
What You'll Learn
Discounts for young drivers
Young drivers can save money on their auto insurance by comparing multiple quotes and looking for discounts. Here are some of the most common discounts available for young drivers:
Multi-car discount
If you live with your parents and multiple vehicles are insured with the same company, your family may qualify for a multi-car discount. You could also be eligible if you live with a spouse or domestic partner and your vehicles are on the same insurance policy.
Good student discount
If you’re in high school or college, you may qualify for this discount by maintaining good grades. The required grade is usually a "B" average (3.0 grade point average) or higher. Typically, the student must be under the age of 25. This discount averages 16%.
Defensive driving discount
You can take extra driver education or a defensive driving course. This means exceeding the minimum state-mandated driver's education and training. In most states, teen drivers can save around 5% on their premiums by taking a state-approved driver improvement class.
Student away from home discount
Most car insurance companies offer a discount for students who are away at college. This discount averages 18%.
Good driver discount
Keeping a clean record can help you get lower rates. This may not be available to newly licensed teens.
Low-mileage discounts
Pay-as-you-drive or pay-per-mile insurance can also reduce rates. Most car insurance companies offer discounts if you allow a telematics device to be placed in your vehicle to monitor driving habits. This is considered "pay-as-you-drive". Both discounts are great for teens or families that don't drive very often.
Alumni association discounts
Many car insurance companies offer alumni association discounts for recent college graduates.
Young driver safety training
Many companies offer discounts to students who have taken a driver education class or an approved driver training course. Most courses cover the rules of the road and teach young drivers to drive defensively.
Usage-based rating discounts
Usage-based rating is a relatively new way to reduce your auto insurance rate. Carriers that offer these telematics programs require policyholders to use a mobile app or plugin device to monitor driving habits such as acceleration, braking, speed and trip distance each time they drive.
Distant student discount
Many auto insurers offer discounts for students who attend school away from home if they do not take a vehicle with them during the school term. You must be listed on your parents’ policy to take advantage of this discount.
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Cheapest car insurance for teens
Car insurance for teens can be expensive, with policies costing thousands of dollars a year. The best way to get the cheapest car insurance for young drivers is to add them to a parent's or guardian's policy.
The Best Car Insurance for Young Drivers
According to WalletHub's analysis of 17 major car insurance companies, the best car insurance companies for teens and young drivers are:
- Travelers
- USAA
- Progressive
Cost of Car Insurance for Teens
The average cost of adding a teenager to a car insurance policy is $3,824 per year, according to NerdWallet's analysis of full-coverage rates for 16-year-old drivers included on a two-parent or guardian auto insurance policy.
How to Save on Car Insurance for Teens
- Good grade discount: Some auto insurers offer discounts for maintaining a high GPA or getting straight As.
- Defensive driving discount: If a young driver takes a defensive driving course, some car insurance companies may offer a discount.
- Tracked driving behaviour programs
- Student away-at-school discount: Young drivers who go to school away from home could qualify for this discount.
Cheapest Car Insurance Companies for Teens
- Travelers: $1,249 per year
- USAA: $1,289 per year
- Geico: $1,355 per year
- State Farm: $1,500 per year
- Mercury: $1,546 per year
- Grange: $1,602 per year
- Progressive: $1,670 per year
- AAA: $2,083 per year
- The Hartford: $2,007 per year
- Esurance: $2,205 per year
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Car insurance for young women
Young drivers, especially those between the ages of 16 and 25, are considered to be a high-risk group by insurance companies due to their relative inexperience, higher likelihood of reckless driving and higher accident rates. As a result, insurance companies tend to charge higher premiums to young drivers. However, young women can find affordable insurance rates and there are a number of ways to reduce the cost of car insurance for young women.
Insurance Companies with Affordable Rates for Young Women
According to a US News and World Report study, USAA offers the cheapest average annual rates for young adult drivers, with a sample rate of $1,612 per year for 25-year-old female drivers. However, USAA policies are only available to the military community. The next most affordable insurer for young women is Nationwide, with a sample rate of $1,892 per year. Geico is also one of the more affordable insurers for young women, with a sample annual rate of $1,921.
Ways to Reduce the Cost of Car Insurance for Young Women
- Stay on a parent's policy: Adding a young driver to an existing policy is typically cheaper than buying a separate policy.
- Shop around for quotes: It's a good idea to compare quotes from multiple insurance companies to find the most affordable rate.
- Look for discounts: Many insurance companies offer discounts for young drivers, such as good student discounts, student-away-at-school discounts, driver's education discounts, defensive driving course discounts, safe driver discounts, multi-car discounts, multi-policy discounts, safety feature discounts, and usage-based rating discounts.
- Choose a higher deductible: Opting for a higher deductible can lower your premium, but keep in mind that you will have to pay more out of pocket if you file a claim.
- Choose the right car: Insurance rates vary depending on the make, model, and year of your vehicle. High-performance vehicles, luxury cars, and vehicles with high theft rates will cost more to insure.
- Review your coverage: Consider what types and amounts of coverage you need. While liability insurance is typically required by states, you may want to add additional coverage types such as collision and comprehensive insurance for more protection.
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Car insurance for young men
The best car insurance companies for young men include:
- State Farm: State Farm has excellent customer satisfaction ratings and offers 13 discounts, including ones for safe driving and young drivers.
- Geico: Geico offers 16 discounts for young drivers, including for good grades and taking a defensive driving course.
- Auto-Owners: Auto-Owners offers three dedicated savings programs for young drivers and a slew of other discounts.
- Nationwide: Nationwide offers numerous coverage add-ons, like roadside assistance and gap insurance, and has a usage-based program that rewards safe driving.
- Progressive: Progressive may appeal to young men who prefer to handle their insurance digitally, with a highly rated mobile app and website.
- USAA: USAA provides some of the lowest rates available, but is only available to military members and their families.
The best way to find the cheapest car insurance for young men is to shop around and get quotes from multiple companies.
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Best insurance for military members
When it comes to auto insurance for military members, USAA and Geico are the two companies that are most recommended. USAA offers the cheapest auto insurance rates on average and its coverage is exclusively for active or retired military members and their spouses and children. The company also has a telematics insurance program, USAA Safepilot, which can help customers save even more. Geico offers a discount of up to 15% off car insurance policies for qualifying active-duty and former service members. Policyholders can also qualify for additional discounts for emergency deployment and membership in military organizations.
Other auto insurance companies that offer military discounts include:
- Armed Forces Insurance
- Kemper
- Farmers
- Liberty Mutual
- State Farm
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Frequently asked questions
The best auto insurance for young drivers is typically being added to a parent's or guardian's policy. That's because young drivers are seen as risky to insure due to their lack of driving experience and a higher likelihood of reckless driving and accidents.
The average cost of adding a teenager to a car insurance policy is $3,824 per year. The cost of auto insurance for young drivers varies depending on factors such as age, gender, state, and whether the teen is the primary policyholder.
In addition to age and driving experience, factors such as vehicle make and model, credit history, gender, and location can also impact the cost of auto insurance for young drivers.
Yes, many auto insurance companies offer discounts for young drivers, including good student discounts, driver training discounts, and student-away-at-school discounts.
Young drivers can save money on auto insurance by comparing quotes from multiple companies, choosing a higher deductible, and taking advantage of available discounts.
