Let’s take a look at the auto insurance companies out there that insure young drivers. We’ll also explore the discounts available from each. And we’ll see which one will provide you with the best service and coverage every time you get on the road.
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Factors Impacting Cost
A number of variables impact the cost of auto insurance premiums you’ll pay each month. Things like your driving history, credit history (in certain states), and where you live in your city can raise or lower your cost significantly. The amount of coverage you choose–state-required minimum liability or additional coverage–will also impact the price of your premiums.
Of course, there’s also the issue of your age.
Younger drivers (those under 26, typically) will typically pay a considerable amount more each month for auto insurance, regardless of the other factors involved. This is because these drivers are obviously less experienced behind the wheel. They also have higher rates of speeding, driving under the influence, and crashes involving speeding.
According to the National Highway Traffic and Safety Administration, 64% of alcohol-impaired accidents resulting in a fatality in 2010 were caused by drivers between the ages of 21 and 34. And when examining accident-related fatalities in 2012, they found that 37% of 15- to 24-year-old male drivers were speeding at the time of their crash.
It’s no wonder, then, that auto insurance companies charge a higher premium for drivers under the age of 30, and particularly those under 26.
Premiums can also be affected by the insured’s credit history, which many young adults are still working on. Other factors like whether they own or rent their own home and how many miles per year they drive also can count more heavily against young drivers.
Compare Car Insurance Plans for Young Adults
Which Companies are Best for Young Drivers
Some auto insurance companies are better than others when it comes to insuring young adults, though. Let’s take a look at some of the best out there, and what they offer.
You’ve probably seen commercials recently for this auto insurance provider, touting their New Car Replacement coverage. Well this, combined with a wide variety of discounts to choose from, makes Liberty Mutual a great choice for young adults.
Here are a few of the discounts that they offer to young drivers:
- Good Student Discount: Available to student drivers under the age of 25 who also maintain a B average or higher overall.
- New Graduate Discount: Just walked the stage? Great! You’re eligible for exciting new savings to commemorate your accomplishment.
- Newly Married Discount: Newlyweds can celebrate with added auto insurance discounts through Liberty Mutual.
- Vehicle Safety Features Discount: Have airbags in your vehicle? What about bluetooth hands-free capability? Lane departure sensors? You’ll find a number of safety-related discounts just for driving the car you already have.
While not a discount, Liberty Mutual also offers another valuable feature: accident forgiveness. This means that if you get into an at-fault accident, your premiums won’t go up after one claim. And if you’ve just bought your first new car, you might consider adding the company’s New Car Replacement rider. If your car is totaled, you’ll get enough money back to replace it in with a similar car.
If you’re looking to cut auto insurance costs and don’t have a long commute each day, usage-based coverage might be a great option. At Metromile, the leading pay-per-mile insurance provider in the U.S., you can completely customize the coverage you want while also ensuring that you only pay for what you need.
Coverage options range from liability-only to comprehensive, collision, personal injury protection (PIP), uninsured/underinsured motorist coverage, as well as benefits like roadside assistance and glass repair. Their app allows you to track your miles, file a claim, get vehicle diagnostics, and even locate your car if it’s lost or stolen (they boast at 94% stolen vehicle recovery rate!).
With Metromile, your monthly premiums will consist of a base fee plus a set rate per mile driven. That rate is determined according to personal factors such as your age, location, and driving record–as with any auto insurance policy. You’ll pay for each mile up to 250 per day (150 for NJ drivers), but anything over that is free.
If at any point you want to cancel your policy, no worries! There are no cancellation fees with Metromile. And if you have a trip planned, you’re allowed to set a travel grace period for up to two weeks which can save you money (this is allowed once every six months).
Some of the discounts you can enjoy with Metromile include:
- 3-Year Safe Driving Discount: If you haven’t had an accident or traffic citation in the last three years, you may be eligible for a discount.
- 5-Year At-Fault-Free Discount: Your rates could decrease if you’ve been without an at-fault incident in the last five years.
- Multi-car discount: Have more than one vehicle on your policy? You can enjoy discounts on your coverage for both.
While Metromile plans to expand quite a bit in 2020, their pay-per-mile insurance coverage is currently only available in Arizona, California, Illinois, New Jersey, Oregon, Pennsylvania, Virginia, and Washington.
Learn More: Read our Metromile Review
Founded in 1922, State Farm is one of the oldest auto insurance companies around, as well as the largest auto insurer in the country. They have a proven track record for customer service, reliability, and fair pricing. And this extends to their younger customers, as well.
The company boasts excellent customer satisfaction ratings from JD Power with just shy of five stars. Of those companies listed here, they’re only second to Esurance. They offer plenty of excellent discounts to ensure your premiums are manageable. They also offer various online tools to make managing your account–and choosing coverage–easier than ever.
If you’re looking into State Farm, here are a few of the discounts you can enjoy:
- Good Student Discount: While almost all companies offer a discount to students with good grades, State Farm continues this discount even after graduation. If you’re enrolled full-time with a B average or higher, you can enjoy up to 25% off of your premiums. Once you graduate, this discount will continue all the way to age 25!
- Good Driving Discount: If you’ve gone three or more years without a driving incident, you’ll snag yourself a hefty discount for being a safe driver.
- Drive Safe & Save™ Program: Enrolling in this program allows State Farm to log data from your phone’s app or your vehicle’s OnStar/SYNC system, in order to see if you’ve been a safe driver. If so, you’ll receive notable discount on premiums based on the info they receive.
- Steer Clear® Program: If you’re 25 or younger, haven’t had an accident in the last three years, and want to snag a hefty discount on your premiums, the Steer Clear program is perfect for you. It serves as an opportunity to review your driving skills through their online or in-app course. Those who complete the program? They’ll earn serious discounts on their bill.
This insurance company is known for ads targeted at the younger crowd. Plus, they offer low, instant quotes. They were also bought out by Allstate a while back, so they are now supported by one of the most established, reliable companies on the market.
Esurance has an easy-to-use website and online portal, making it simple to get an instant quote and manage your account once you establish coverage. They offer a mobile app. It lets you to view your insurance documents, make a claim, communicate with agents, and even upload supporting documents, straight from your phone.
They offer a number of discounts for drivers, too, helping you save some cash each month. Here are a few:
- Fast 5 Discount: Simply start a quote online and you’ll snag 5% off of your first term’s premiums.
- Switch & Save Discount: Bring your insurance over from another company to Esurance, and they’ll reward you with 5% off of your first two terms’ premiums.
- Good Driver Discount: This is the most significant discount in most states. Esurance automatically grants it to drivers without any significant incidents (accidents, citations) on their driving record.
- Defensive Driver Discount: Complete a voluntary, certified defensive driver course (online or in a classroom) and receive a price cut on your premiums.
- Good Student Discount: If you are a student under 25, have a B average (3.0 GPA or higher), and are enrolled full-time in high school, a university, or college, you’ll be qualify for this discount.
- Pac-12 Discount: Are you a Pac-12 student or alum living in Arizona, Colorado, Oregon, or Utah? Esurance has a price break for that. For more info on qualifying, visit their Pac-12 Discount page here.
On top of everything they offer, Esurance also has a reputation for excellent customer satisfaction ratings. In fact, the JD Power 2017 U.S. Auto Insurance Study found Esurance to be the top-rated insurance company in the country.
The jingle seems to ring pretty true, even for younger drivers: Nationwide really is on your side. Whether you’re looking for a quick and easy online quote or multiple premium discounts to choose from, this insurer offers it all.
Nationwide gives drivers discounts for just about everything, including:
- Easy Pay Sign-up Discount: Sign up for paperless billing and auto-pay to snag an easy discount. And you’ll also never forget to pay your premiums!
- Accident-free Discount: If you’ve gone 5 or more years without an accident, you’ll pocket some extra cash in the form of a discount on premiums.
- SmartRide® Discount: This little device plugs directly into your vehicle and offers Nationwide feedback on your driving and vehicle usage, in exchange for a potential notable discount.
- Good Student Discount: Drivers aged 16 to 24 who are enrolled in school full-time and maintain a B average or higher can take advantage of this price break.
If you’re worried you’re missing out on potential discounts and price breaks, Nationwide will even help you evaluate the policy. Simply request an On Your Side® review. This free assessment takes a look at your policy and individual needs. You can then determine if you have the right level of coverage for your lifestyle, if you’re taking advantage of all the discounts available to you, and if you understand your policy and benefits.
Blame it on the witty lizard or the lightning fast online quotes (promising to save you 15% or more). But GEICO is worth a look if you’re a young driver seeking auto insurance. The company consistently carries a four-star customer satisfaction rating from JD Power and offers excellent rates. They even have a unique program that makes transitioning from mom and dad’s policy to your own easy and cost-effective.
In addition to other great features and discounts, GEICO offers the Family Pricing program. You may have gotten an awesome rate by jumping onto your parents’ policy as a teen or young adult. But these usually skyrocket when it’s time to split off onto your own policy. However, GEICO does things differently.
With the Family Pricing program, you can receive the same great rates you enjoyed on your family’s policy, even if you move to a solo policy. This allows you to spread your wings a bit without seeing premiums double, triple, or worse. Of course, you may lose out on certain discounts your parents enjoy (such as multi-driver/multi-car discounts or combined policy discounts for also insuring a home, motorcycle/boat, or personal property). But at least your base rate will stay the same.
Here are some other great discounts that GEICO offers young drivers:
- Good Student Discount: Are you a full-time student in high school or college, aged 16 to 24, with a B average or higher? You could save as much as 15% on your premiums.
- Good Driver Discount: If you haven’t gotten in an accident in the last 5 years, you’ll see a reduction of as much as 26% on your bill.
- Vehicle Safety features: If you’re driving a later model vehicle with a number of safety features, you could save quite a bit. An anti-lock brake system will net you 5% off. Anti-theft systems save up to 25%. Airbags will earn a discount between 25-40%, and daytime running lights net another 1% off.
- Certain affiliations: GEICO offers discounts if you’re a member or alum of a number of different schools, sororities/fraternities, student organizations, federal groups, and more.
Getting the Cheapest Car Insurance for New and Young Drivers
Getting auto insurance as an adult under 30 (and particularly under 26) is a pricey venture. Thanks to good ol’ statistics, you’re going to pay more than if you were a few years older. There’s just no avoiding it.
However, there are a few ways that you can make the best of the situation and find the lowest possible rates on car insurance.
Boost Your Credit. Improving your credit history can, in many states, result in a drop in auto insurance premiums. Not all states factor in your credit history, but many do. Having a positive, established history can work wonders for your quote.
Doing things like responsibly managing a credit card, paying your bills on time, and clearing out revolving debt are all ways that you can improve your credit history.
Drive Responsibly. It should go without saying, but the smarter you are as a driver, the lower your premiums will be. Avoid speeding tickets and definitely don’t get in an at-fault accidents if you want to see your bill drop.
Raise Your Deductible. The higher your deductible, the lower your monthly premiums will be. Depending on your situation, the difference can be significant. Just make sure you have enough money set aside that you can cover the deductible if the need arises unexpectedly.
Combine Coverage. If you have homeowners, renters, personal property, or boat/motorcycle insurance, look into combining policies with the same company. You can often net serious savings by creating a multiple-policy bundle, rather than paying each policy separately with different companies.
Use Gabi to Save Even More Money
Look, as a young adult, cost is top of mind. You don’t necessarily have to get cut-rate insurance to save money, though. So what I strongly recommend is looking into a tool called Gabi.
Gabi is a free online tool that will look at your current car insurance and help you find a similar package for less money. They’re a licensed insurance broker in all 50 states, and all you need to do is upload a PDF of your current insurance plan and Gabi will search to find other providers on your behalf. If Gabi can’t save you money, they simply recommend you keep your existing policy – that’s it.
But if they find a provider that offers insurance for less, they’ll present the options and link to sign up with one of those auto insurance providers (which is where Gabi makes money). There’s no cost to you – so it’s worth checking out to see if you can save money.