Auto insurance for teens and young adults can be pricey, which is why it’s important to know where to go for the coverage you need.
Published September 9, 2019|5 min read
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It’s common knowledge that, when it comes to car insurance, teens and young adults are notoriously expensive to insure. That’s because car insurance companies see young, inexperienced drivers as riskier, and more likely to get in an accident and file a claim. Generally, your car insurance rates are extremely high when you first start driving as a teen, and they fall every year until you turn 25 and exit that high-risk category.
But that doesn’t mean it’s impossible to find affordable car insurance if you’re under 25. Some carriers are friendlier to younger drivers than others, and many major car insurance carriers offer special discounts and programs aimed at teens and young drivers. The high cost of car insurance for drivers under 25 just means it’s all the more important for younger drivers to research their insurance options and compare quotes before settling on a policy.
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Car insurance premiums are calculated based on a number of factors, including your driving history, credit score, zip code, coverage amounts and the type of car you drive. And age is one of the most important considerations in determining how much you’ll pay for car insurance.
As we mentioned above, teen drivers start out paying high premiums and their rates fall when they reach 25 and exit the high-risk category. There are exceptions to this of course, if you’re over 25 but you’ve had accidents, or you only got your license recently, you may still pay more for car insurance. But generally, young drivers will see their car insurance costs fall at 25, although once you turn 65 and enter the senior driver category, your rates will start to rise again as a result of your age.
The high price for teen drivers isn’t without evidence: According to the Centers for Disease Control and Prevention, the risk of car crashes among 16-19-year-olds is higher than among any other age group, and teens have the lowest rate of seat belt use compared with other age groups. Teens are also more likely to speed, tailgate the drivers in front of them, and underestimate dangerous driving situations — all risk factors that make them more expensive to insure.
Finding the right car insurance company for a teen driver isn’t just a matter of comparing quotes and choosing the cheapest insurance — although doing a thorough quote comparison should certainly be part of the process, and a Policygenius expert can help you with that. You should also look for car insurance companies that offer discounts and programs to help teen drivers save money and become better drivers.
Whether you’re a family adding a teen driver to your existing policy or a driver under 25 looking for your own car insurance policy, here are car insurance companies that offer affordable rates and discounts for young adults:
USAA, which stands for United Services Automobile Association, is known for industry-best claims satisfaction at affordable prices. The catch is that USAA insurance is only available for families associated with the U.S. armed forces, so drivers have to be a member of the U.S. military or have an immediate family member who is.
But for qualifying drivers, USAA makes it simple to add a teen driver to a new policy, and when the children of USAA members need their own policy, they may qualify for a 10% legacy discount. USAA also offers teen discounts that you’ll find with other carriers, like discounts for completing driver’s ed and for maintaining above a certain GPA in school.
GEICO is a hugely popular car insurance company that typically offers affordable rates, including for drivers under the age of 25. While young drivers will still pay more than drivers over 25, GEICO’s affordability and wide range of discounts mean it could be a good option for teen drivers, whether they’re joining an existing policy or getting their own.
GEICO’s discounts for teens and young adults include a good student discount, discounts for completing driver’s ed, and discounts for belonging to certain fraternities, sororities or other student organizations. GEICO also provides resources for parents of teen drivers, including a contract for teens and parents to sign together.
In addition to generally affordable rates, State Farm also offers a wealth of resources to offset the cost of insuring a teen or young adult driver. The State Farm Steer Clear program offers young drivers a discount upon completion, and includes educational quizzes, informational videos, and an app that tracks your driving and helps you learn how to be a better, safer driver.
State Farm also offers the standard discounts for teens that you’ll find at other major carriers, like a discount for completing driver’s education and a good student discount that can last until you turn 25.
Another usually affordable carrier, Nationwide also boasts above-average claims satisfaction, which might be important considering the increased likelihood of a teen or young driver needing to file a claim.
Nationwide also offers accident forgiveness for qualifying drivers, meaning a young driver’s rates won’t go up after their first at-fault accident. Nationwide also offers a good student discount for drivers between the ages of 16 and 24 who are full-time students and maintain a B average or higher.
A note: car insurance rates for teens vary depending on the other factors that determine premiums, like location, make and model of car and credit score. Be sure to shop around with smaller, more regional car insurance providers in your area as well as the major carriers — they may offer the most affordable rates for a teen or young adult driver.
Lower your coverage amount. If your teen is driving an old hand-me-down car, as is often the case, it may be worth dropping collision and comprehensive coverage, which pay for damage to the vehicle itself after an accident or another type of incident. If you’re not overly concerned about being able to pay for any damage to the vehicle, not carrying comprehensive or collision insurance for that specific car will lower your rates.
Look into other discounts. As always, make sure you’re getting every car insurance discount available. You may even be able to get additional discounts by making some changes, like adding an anti-theft device to your vehicle, or signing up for a program that tracks your driving.
Shop around. Comparing quotes from multiple carriers is the best way to ensure you’re getting the best rates. Whether you’re a young adult getting your first policy or a family adding a teen to your existing policy, it’s always worth shopping around to make sure you’re getting the best deal and not overpaying for your coverage.
If you’re ready to compare auto insurance quotes from top carriers, a Policygenius expert can help you through every step of the process. Get started here.