Best Car Insurance for Young Adults

It’s rarely convenient or economical to purchase auto insurance when you’re a teen or a young adult. This is true for anyone wanting to increase coverage under a parent’s current policy, but it is especially true for young adults who must independently obtain low-cost auto insurance.

If you want to find the best, most affordable young driver insurance, you should compare policies and look into available discounts.

Depending on your location, whether you continue to be covered by a parent’s insurance, and other variables, the typical premium for young drivers varies. It’s still possible for young people and drivers to acquire low-cost, high-quality auto insurance, though. The top vehicle insurance firms for young individuals are listed below:

Cheapest Car Insurance Companies for Young Adults

  1. USAA: $1,060
  2. Geico: $1,207
  3. State Farm: $1,329
  4. Travelers: $1,373
  5. Nationwide: $1,552
  6. Progressive: $1,620
  7. American Family: $1,709
  8. Farmers: $1,881
  9. Allstate: $1,957

Why Is Car Insurance More Expensive for Young Drivers?

Young individuals generally lack driving experience, which is the main factor contributing to their higher vehicle insurance prices. Driving necessitates a reflexive reaction and a certain amount of intuition. Young drivers have not yet mastered those skills and are hence novice drivers.

Additionally, the risk the insured provides to the insurance business determines how much each firm’s policies cost. There isn’t enough observable driving history from the perspective of the insurance company. A person who has never driven cannot reasonably evaluate the risk. It is believed that the track record is insufficient to make a decision, even for a teenager who has only been driving for one or two years. As a result, there are longer-term increases in rates.

How Car Insurance Protects Teen Drivers

By auto insurance, teenagers and other young drivers are shielded from having to cover bodily injury and property damage out of pocket after an accident. Teenagers need quality auto insurance more than anyone because of their lack of experience behind the wheel and limited household incomes.

The U.S. Census Bureau estimates that in 2020, 15.8 million, or 60% of those under 25 with incomes under $25,000, lived in poverty. Young drivers are therefore less likely to have the resources necessary to cover someone’s medical expenses or replace a totaled vehicle than their more experienced counterparts.

For this reason, we advise purchasing the most expensive level of automobile insurance you can. Teen drivers should buy the most liability insurance they can if they didn’t afford full coverage.

How to Find Cheap Car Insurance as a Young Adult

If you are a young adult, the cost of auto insurance may seem fairly alarming at first. There are ways to restrict the cost of coverage, though. Below, we will go through five of the best techniques.

1. Reduce Coverage Limits

Your vehicle and finances are less protected if you reduce your auto insurance coverage, but you may be able to get the lowest rates available. Both bodily injury liability insurance and property damage insurance coverage will probably be required of you. Required insurance may be more comprehensive in some states than that.

2. Increase Auto Insurance Deductible

When you go for a higher deductible on your policy, it will be much simpler to locate affordable auto insurance for young adults. As a result, if you submit a claim, your out-of-pocket costs will increase. You can choose whether to risk paying more in the future for coverage or pay more up now.

3. Raise Your Credit Score

Although it takes time, you may raise your credit score. If you do have good credit, you will save money on more than just auto insurance because lenders will typically give you lower rates on lines of credit.

4. Compare Car Insurance Quotes

If you get insurance price quotes from several providers, finding the best car insurance for a young adult will be much easier for you. Asking for vehicle insurance quotes can enable you to determine whether you are receiving reasonable premiums.

5. Bundle Your Insurance Policies

Combining your current auto insurance policy with your homeowner’s insurance may result in cheaper premiums for each policy. It makes sense to save money on car insurance by working with the same company you’ll need to secure your car and home.

How Young Drivers Can Save on Car Insurance

It’s not the only way that young drivers can lower their auto insurance costs: they can also qualify for discounts. Maintaining a claim-free driving record devoid of incidents where you were at fault, keeping an eye on your credit score, and driving safely by abstaining from moving offenses (like speeding) will all help to maintain your cheap auto insurance affordable.

1. Choose the Right Car

Various auto insurance premiums are a result of different vehicles. Insurance will be more expensive for high-performance cars, luxury cars with significant maintenance costs, and cars with a history of theft. You can avoid committing yourself to buy a car that will be too expensive for you to insure by speaking with an insurance agent or obtaining an internet estimate before making a purchase.

2. Choose Proper Coverage

Different young drivers require various levels of insurance protection. We walk you through the different coverage options.  It’s crucial to keep in mind that different states have varied standards for the types and amounts of auto insurance. 

The majority of lenders and leasing businesses do as well, allowing them to be confident that the collateral serving as the loan’s security is well-protected. Keep in mind that the minimal insurances you should have are those required by the state and your lender. In some circumstances, even if insurance costs more, you’ll want greater coverage than the bare minimum.

3. Claim-Free Driving Record

A “high at-fault accident rate” is one of the main causes of high auto insurance prices for new drivers. If you’ve maintained a spotless driving record during your years as a young driver, your rates should drop significantly as you enter your early twenties. You can keep the cheaper costs you have earned by maintaining a clean driving record.

4. Clear Bills on Time

It’s simple to overlook one or two bill payments once you graduate from college and begin your own household. But you can’t skip any payments if you want to have inexpensive auto insurance, especially ones for credit cards. The majority of states allow vehicle insurance providers to base the pricing on your credit score. The more they can charge you during prime time, the lower your score.

5. Don’t Get Traffic Tickets

Even though it may seem simple, avoiding traffic penalties is crucial if you really want to keep the cost of your auto insurance down. Keep in mind that any traffic infractions you receive—whether they occur in a friend’s car, a rental car, an out-of-state vehicle, or even on a bicycle—can affect your driving record. Teen drivers with a history of traffic violations will have high insurance premiums throughout their first few years due to their poor driving records.

Insurance Discounts for Young Adults 

Although finding affordable auto insurance for teenage drivers can be challenging, it is still possible to earn cheaper insurance premiums by being eligible for discounts.

Every major insurance provider offers discounts, many of which are tailored to young people, novice drivers, and teenagers. Young driver automobile insurance discounts include some of the following:

  1. Earning a spot on the honor roll, finishing near the top of your class, keeping a high-grade point average, or performing well enough on a test as a homeschooled student will all help you pay less for insurance.
  2. Students without a family car who live at least 100 miles from home are eligible for reductions from insurance companies.
  3. As a strategy to draw drivers, insurers frequently collaborate with certain colleges, fraternities, sororities, on-campus organizations, and other student organizations. You may be able to lower your insurance costs if you belong to any of the eligible organizations.

We hope this guide will help you in your quest to find out the best car insurance as a young driver. Still have doubts? Let us know in the comment section. 

Best Car Insurance for Young Adults was last updated August 4th, 2022 by Lokesh Jaral