When you’re a teenager or young adult, buying car insurance isn’t the most pleasant of experiences.
On the one hand, auto insurance coverage is required for all drivers in every state in the US (except New Hampshire, Virginia, and Mississippi, where there are alternatives). On the other, teenagers and young adults pay the highest premiums for coverage.
We’re going to try to help you get around that problem by providing a list of the providers of the cheapest auto insurance for young adults.
Why Auto Insurance is More Expensive for Young Drivers
Most of the reason why young people pay the highest premiums for auto insurance is because of a lack of driving experience.
Driving requires a reflexive response, as well as an undeniable level of intuition. As an inexperienced driver, young people simply lack those qualities.
Unfortunately, it also has to do with the driving habits of young adults themselves. They’re more likely to engage in distractions while driving.
These can include talking on cell phones, texting, and adjusting entertainment media. With all of those amenities being second nature to young people, they simply don’t understand that none necessarily work easily in combination with driving.
Finally, though you never want to generalize, it’s a fact that young drivers are more likely to engage in reckless driving.
Youth and lack of experience make it difficult for young drivers to project the consequences of reckless driving. Speeding is particularly common among young drivers. They may underestimate the need to observe posted speed limits.
Engaging in substance abuse, like alcohol and drugs, also lowers inhibitions against reckless behavior, of course. Teenagers and young adults are also less experienced with something legal, like alcohol, and how it impairs driving.
Even if you’re not guilty of any of those, you’re still being lumped in with the rest of your age group. It might not be fair, but it’s the way auto insurance works.
And interestingly, a new survey from Liberty Mutual discovered that teens are likely to follow the poor driving habits they see in their parents, heightening the risk of an accident on the road and impacting their coverage.
Parents who may have decades of driving experience are being watched by their less experienced teens, who take on the same dangerous driving habits like speeding, texting at stoplights, and failing to follow other traffic laws.
Safe driving is key to getting and maintaining affordable car insurance, period, but especially for young drivers.
The Cheapest Auto Insurance for Young Adults
Below we’ve compiled a list of who we believe to be the companies offering the best insurance for young drivers. Not coincidentally, these tend to be the companies who offer the lowest premiums for older adults, as well.
In some cases, they have programs or discounts specific to young adult drivers. But more likely, they offer a combination of discounts to keep their premiums lower than the competition.
The companies listed below generally offer the best insurance for young drivers, but any one of them may not be competitive in the state where you live. Check with several, and find the company who has the best coverage for the lowest premium in your state.
Amica isn’t well known for having the cheapest auto insurance for young adults. However, they do have a number of discounts which can provide young drivers with a serious reduction in their auto insurance premiums.
Like many companies on this list, Amica does offer a discount if you have a claim-free experience. The discount will apply if you’ve had no claims within the past three years, other than glass (think windshields) or towing claims.
They also provide a Good Driving Discount. You are eligible for this discount if you go at least three years without an at-fault accident or a moving violation.
The Good Student Discount can reduce your premium by as much as 25%. What’s more, it will continue even after you graduate from college, up to age 25.
They also offer a Student Away at School Discount. If you go to school away from home and only drive when you’re at home, you can qualify for this discount as well. You must be under age 25 and a full-time student to qualify for this discount.
Perhaps the most interesting discounts provided by Amica are their Loyalty and Legacy discounts.
Under the Loyalty Discount, you can qualify for a reduced rate, after maintaining a policy with the company for at least two years. The discount will increase the longer you are with Amica.
GEICO is one of the most price competitive auto insurers on the market. They offer special programs for young drivers.
One specific program is the GEICO Family Pricing program. This enables young drivers to get the same policy rates as more experienced drivers within the same family.
It’s an opportunity for a young driver to establish a good driving record, without having to pay the higher premiums that are typical for new drivers.
GEICO also offers their Accident Forgiveness program. It can be either earned or purchased. It’s not available in California, Connecticut or Massachusetts.
It only applies to only one member of the family on a single policy. That means that an accident by one member of the family will not result in a surcharge. However, it does not apply to all drivers on the policy, only the first one with an at-fault accident.
You can also save up to 26% on your premium with the Five-Year Accident-Free Good Driver Discount. Five years may seem like a long time, but if you take a policy at 16, you’ll qualify for the discount by the time you’re 21.
GEICO also offers employee discounts (at participating employers) as well as a federal employee discount under the Eagle Discount program. It can reduce your premium by up to 8%.
You can also get a discount of up to 15% if you are a member of the military.
And finally, the Good Student discount is available to drivers between the ages of 16 and 24, who are full-time students, and maintain a minimum of a B average.
USAA offers several different discounts to young drivers.
Driver Training. You can get a discount if you are under 21, and you complete a basic driver training course. (The discount is not available in Hawaii, North Carolina or New York).
Safe Driving Discount. You can reduce your premiums if you maintain a good driving record for at least five years.
Good Student Discount. You get a break when you maintain good grades at school.
Automatic License. This is a free program offered by USAA, designed to encourage good driving by young drivers. You get a free adapter that plugs into the vehicle’s onboard diagnostics port, and connects with an on the teens smart phone.
One of the advantages with Esurance is that they are consistently one of the lowest priced auto insurance carriers in the industry. This makes it highly likely that they will be the best insurance for young drivers as well.
Esurance offers a Good Student Discount. You must be a full-time student, and maintain a GPA of 3.0 (B) or better in order to qualify. You must also qualify under the Multi-Car discount for adding more than one vehicle to the policy.
Like most other insurance companies, Esurance has multiple discounts based on the car’s safety features, like antitheft devices. They also offer multi-policy discounts, as well as multi-vehicle policy discounts.
Their Claim-Free Discount is available if you have driven for at least five years with no at-fault accidents or moving violations. This discount can save you anywhere from 10% to 25% on your current premium.
Still another intriguing discount is the Esurance Switch & Save Discount. If you have auto insurance coverage from another company, and you switch to Esurance, you can get a discount of up to 5% off your premium.
The discount is only available for your first two policy terms.
And still two more interesting discounts: Fast 5 and Pay-in-Full. Under the Fast 5 Discount, you get a 5% discount on your premium just for applying online. Meanwhile, the Pay-in-Full Discount can get you a discount of as much is 10% off your premium.
Like Esurance, Progressive is well known for having some of the very lowest auto insurance rates possible.
It’s even possible that they have some of the very cheapest auto insurance for young adults. But as is the case with virtually all auto insurance providers, it really comes down to the discounts that they offer.
If you sign your documents online, that entitles you to a discount of up to 7%. You can also save money on your premium by paying the entire amount up front. Progressive’s policies are billed in six- month increments, so it’s just a matter of making all six payments at one time. And as you would expect, there is a good student discount, though Progressive doesn’t specify how much it is.
Progressive also offers their Snapshot program, which can give you a discount based on your actual driving.
You receive the device in the mail and plug it into your car’s onboard diagnostics port. There, it monitors your driving. You get $25 just for using the device. Progressive claims the use of the tool rewards the average driver with a $130 discount.
They also offer their Name Your Price Tool. It’s not really a discount, but you plug in the amount you’re willing to pay, and the tool locates a policy for you – if it’s available at that price. Enter zero, and I’m sure you’ll get zero results!
Liberty Mutual has some interesting discounts.
Under their Exclusive Savings program, you can get a break of up to 10% on your auto insurance if you are affiliated with one of the more than 14,000 associated employers, alumni associations and professional associations who partner with Liberty Mutual Insurance.
Liberty Mutual also offers its Away at School Discount. If your child is a student, attending school at least 100 miles from home, and only drives when he or she is at home, this discount is available.
There is also a discount for completing a driver training course, as well as a good student discount. You just have to maintain a GPA minimum of 3.0 (B), and you can get this discount. You must also be under the age of 25, and attending school on a full-time basis.
And if you’re contemplating how to talk to your kids about safe driving, Liberty Mutual provides parents with a downloadable conversation guide for parents and teen drivers.
Nationwide offers their Accident Forgiveness program. It’s not available in all states, but one of the major benefits is that it is available for teen drivers.
This is an important benefit since young drivers are statistically more likely to be involved in accidents than older drivers. Under the plan, your premium won’t increase after one accident (but only one!).
If you’re a full-time student, Nationwide offers their Good Student Discount. You can qualify for the discount if you maintain a grade point average of B or better.
Nationwide offers many other different discounts, too.
If you work for an employer who participates in a Nationwide discount plan, you can get a break there. You can also get a discount by bundling your auto insurance with other policies, such as renter’s insurance.
And, as is often the case, you can get proportionately less expensive coverage by remaining on your family’s auto insurance plan.
Much like Progressive, Nationwide also offers a discount if you meet safe driver criteria as determined by use of a plug-in device.
Nationwide calls it their SmartRide discount. It’s a usage-based insurance program that enables you to earn a discount for safe driving.
State Farm offers their Steer Clear program specifically for drivers under age 25.
You can qualify if you don’t have any at-fault accidents or moving violations within the past three years. It can result in a discount of as much as 15%.
Of course, it won’t help you when you first sign up for a policy, but it’s certainly something to aim for.
You can also take a defensive driving course, and get a discount.
State Farm also offers their Student Away at School Discount. If you are a student under the age of 25, living away at school and only using your car while at home, you can qualify for this discount.
Then there is also the Good Student Discount, which can cut your auto insurance premium by as much as 25%.
Allstate offers a large number of discounts that can help both teens and young adults get a break on their auto insurance. For example, you’ll get a break if you are under the age of 25, and a full-time student. And like most auto insurers, Allstate also offers a discount if you have good grades. That’s only the beginning.
Allstate can offer you a discount if you maintain both auto and renter’s insurance with the company.
There is also a discount if you work for certain employers that offer special discount programs (check with human resources at work). You may even get a discount if you’re self-employed and work from home.
But perhaps what Allstate is best known for is their Accident Forgiveness program. It doesn’t help you lower your premium when you first take a policy. But if you do have an accident, your premium won’t increase. Accident Forgiveness applies only to your first accident. That’s no small advantage!
What YOU Can Do to Lower Your Auto Insurance Premium
Choosing the right insurance company is probably the single best way to get the best coverage for the lowest premium.
As you’ve probably gathered from the company information above, there are common discounts available through most providers. This means there’s plenty you can do to help your own cause so you’ll be able to get those discounts.
Staying on your parent’s auto insurance policy is the best start. Since the young adult doesn’t have a driving track record, this enables him or her to benefit from the parent’s driving history. It will usually result in a much lower premium than what a young person will get with an individual policy.
Maintain a safe driving history. As a new or recent driver, this won’t help much.
But the years will pass, and as they do, you should build that pattern of safety. It will usually take from three years to five years to begin getting good driver discounts. Start now, and keep the pattern going forward. Soon enough, you’ll get the benefit of safe driver discounts.
Take driving courses. These have an immediate benefit. If you complete a course, an insurance company will apply the discount right away. Just make sure the course is approved by the insurance company, and the cost of the course doesn’t outweigh the discount.
Keep good grades. This almost always means you must maintain a minimum grade point average of 3.0 (B) or better. But that has additional benefits. Not only will it enable you to take advantage of good student discounts, but it will also help you to get into a good college or graduate school, or to land a good job afterward.
Final Thoughts on Getting the Best Insurance As a Young Driver
Be sure to comparison shop. You should do this periodically anyway.
But adding a young person to your family policy is an event which should trigger a shopping spree. The additional driver means you’ll pay a higher premium on the overall policy. That’s the very best reason to begin shopping.
When does auto insurance become more affordable for young drivers? You’re generally considered to be a higher risk up until the age of 25. After that, you can expect your auto insurance premiums to decrease.
Just don’t expect the decrease to happen suddenly. Unfortunately, increases happen suddenly, but decreases are usually phased in – slowly!
But there may be some salvation in the near-term. The longer that you drive, and go without an at-fault accident or moving violation, the greater the likelihood of a premium cut.
There are no guarantees of course. But since auto insurance is a major expense for young people, it’s always worth making every effort to lower your premium.