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Car insurance for young drivers


The best car insurance for young drivers means buying enough coverage to prevent financial hardships should an accident occur while still paying the most affordable rate.

In general, car insurance for young drivers involves two different groups – parents adding a teen driver to their policy and first-time drivers in their early 20s. Here we’ll provide tips for both groups on how to keep first-time driver insurance costs as low as possible while still getting the coverage you need.

Here are answers to the most common questions we get about young drivers:

Advice for parents of teen drivers

Do I have to add my teen once he has a learner's permit?

It depends on where you call home. "Some states require those with a learner's permit to be insured while others don't. It is best to check with your insurance company to see if it is required in your state," advises Tony Arevalo, with Carsurance.

Once teens get a learner's permit (aka provisional license or instruction permit in some states), some companies allow you to add them to your policy at no additional charge until they get their license or turn 18.

They allow this because state permit-holder laws require a licensed driver age 21 or older in the passenger seat, making the young driver less of a risk. Other auto insurance providers require that teens be added when they are in the permit stage, so check with your provider.

Do I have to add my teen to my policy if he doesn't own a car?

"If your teen is old enough to drive and has obtained a driver's license, the answer is yes, you need to add your teen to your policy," says Arevalo. "It is very important that you add your teen to your policy to ensure that you're covered in case he or she gets into an accident while driving your vehicle.”

Even if you do not allow your teen to drive your vehicles, the chance of a joyride while you are on vacation or out to dinner is always there.

If you fail to add your teen to your policy and he or she is in an accident, regardless of whether you gave your permission to use the car or not, your insurer may deny the claim. That means you’re on the hook for claim costs. Many insurers explicitly note in their policies that unless you notify them of additional drivers or risks, those individuals will not be covered.

Even in the event that they do cover the claim, most insurers will require you to pay back premiums from the time the teen was licensed. If your teen has a license but is never (and I mean never) going to drive your vehicles, it is possible to have the teen driver specifically excluded from your policy.

While excluding the teen may lower your premium, if Junior decides to take the vehicle out one night, there will be no coverage whatsoever, putting you at risk. Many insurance companies want you to tell them about household residents who are over a certain age (usually 15) whether that person is licensed or not.

Do I have to tell my insurance company about my teen if he isn't licensed?

In most cases, the answer is no. "If your teen isn't licensed, you have no obligation to inform your insurer since he or she won't be driving anyway," says Arevalo. "However, if you would like to be fully protected, it is best to have your teen listed as a non-driver on your policy.”

When you renew your policy, you may be asked for information about everyone in your household. If your child hasn't received a permit or license yet, the teen usually can be listed as unlicensed on your policy. When a young driver is noted as unlicensed, he or she should also be unrated by the car insurance company, meaning the teen wouldn't affect your rates.

Can my car insurance company find out about my teen driver if I don’t tell them?

Yes, insurers get reports on ‘undisclosed additional drivers in a household’ and ‘youthful drivers,’” says Penny Gusner, CarInsurance.com consumer analyst.  “So if your insurer sees a 15-year-old, or older teen, on the report,  the insurers is likely to ask if that teen is driving yet. If the teen is licensed and driving, the insurance company will want to add him or her immediately. The company may ask when the teen was licensed to charge you retroactively for the time that the teen was a licensed driver and should have been on the policy.”

Who should insure the teen driver if the parents are divorced?

"In general, the parent who has primary custody of the teen should add the child to their policy," says Arevalo. "In the instance of joint custody, the parent who has the teen the majority of the school year should add the child to his or her policy. It is important that both parents discuss this matter as soon as the teen obtains a license to make sure the child doesn't go around driving uninsured."

If the child will drive when staying at the second home, both parents typically need to list the teen as a driver.

Can a teen get his own policy?

This is almost always a bad (and expensive) idea. A teen can technically have his or her own insurance policy, but if the teen driver is under age 18, the parents will have to co-sign since an insurance policy is a legal contract. This means that all of the risk comes back to you anyway.

Adding a teen to your own policy is almost always cheaper than putting a teen on his or her own policy. Even if your young driver is over the age of 18, it is typically cheaper to keep the teen on your policy as long as he or she is living at home and driving your cars. Read our age-specific guides for teen drivers to see how rates differ depending on whether the teen is on his own policy or the parents:

Car insurance for a 16 year old

Car insurance for a 17 year old

Car insurance for an 18 year old

Car insurance for a 19 year old

How much does adding a teen driver to insurance policy cost?

You can expect a significant premium increase when adding a teen driver. Our rate analysis showed an average increase of 160 percent when a married couple added a teenage boy to their car insurance policy.

Typically, in states that allow insurers to use gender as a factor when pricing policies, young male drivers cost more to insure than young female drivers. But, adding your daughter to your policy will still jack up your rates quite a bit. Parents can expect to pay, on average, 125 percent more a year when adding a teen daughter to their coverage.

GenderParent average rateParent rate after adding teenDollar increasePercent increase
Adding age 16 female driver$1,430$3,212$1,782125%
Adding age 16 male driver$1,430$3,722$2,292160%

Expert tips on how to get the best car insurance for new drivers under 25

What advice do you have for novice drivers ages 20-24?

Some individuals choose to get their driver’s license at a later age. Maybe you live in a big city and didn’t need a car. Or, you and your family couldn’t afford for you to get your license when you were a teen, but have the need and ability to do so now. Or, you may have been driving since you were a teen, but you’re now ready to get your own policy as driver in your 20s, and still have relatively little driving experience.

The good news is you will pay less at age 20-24 than you would at ages 16-19. However, your rates will still be comparatively high for a few years until you log some time on the road and build up your driving experience.  Your rates will begin to decrease when you hit the age of 25, as insurers find drivers over age 25 to be less risky, says Gusner.

The key to getting good rates at this age is to shop around and to keep a clean driving record.  If you can keep a clean record for three to five years at least, you can earn a good driver discount with most all car insurance companies. This is a pretty good at 10 to 25 percent with most insurers but others claiming they offer up to a 45 percent discount.

Another tip, don’t go for a first car with all the bells and whistles as those will cost more to insure, if you carry comprehensive and collision – a must on a new car, as they cost more to repair.

Another way to save is to let the insurance company monitor your driving.  This allows them to give discounts to you for good driving behavior.  You can also check with the insurer to make sure you can get a report of how you’re driving so you can see what you need to work on as you get more miles of driving under your belt.

For example, American Family has KnowYourDrive which monitors your driving and with the app you get a score five to 10 minutes after your drive that tells you from 0-100 how safely your drove. If you show good behaviors they offer you up to a 40 percent discount. There is also DriveWise with Allstate, it measures your driving skills but instead of offering a discount you can earn Allstate reward points that are redeemable for gift cards, travel, merchandise, etc.


What is the first-time driver insurance cost for those in their 20s?

For drivers in their 20s, rates for a policy separate from their parents are steep, but not as much as when in their teens.

It is impossible to nail down an exact figure as every situation is different. Insurers take into account your coverage options, ZIP code, type of vehicle, driving record, as well as other factors. That means your exact rate will vary depending on your specific factors, but the table below shows the average annual rate you can expect to pay, based on CarInsurance.com’s data analysis.

AgeState minimum50/100/50100/300/100
20$1,102$1,261$3,214
21$875$1,001$2,516
22$794$906$2,288
23$732$834$2,116
24$684$779$1,982
25$608$691$1,745

 

Advice on teen drivers and drivers in their 20s: Coverage levels, how to save

At what age do young drivers' rates go down?

CarInsurance.com’s analysis of average car insurance rates by age show that, for teen drivers, rates should drop a bit every year that the teen driver stays ticket and accident free. At age 20, expect premiums to decline more rapidly. Generally, once a driver hits 25 rates will drop dramatically, and fall in line with other adults.

What is the best auto insurance coverage level for young drivers age 16 to 24?

In many cases it depends on the type of car they are driving. All drivers need to be protected by liability coverage, but if they are in a clunker you may want to drop collision and comprehensive. Here is a quick overview of coverages all teens should carry;

 

Liability: Almost every state in the country requires all drivers out on the road to carry liability insurance. This protects you in the event your teen injuries another person or their property with their car. Liability comes in two flavors:

 

  • Bodily injury: This covers the medical bills (of the other driver) and the cost of any lawsuits (up to your coverage limits) that stem from an accident your teen causes. This coverage is extremely important as medical bills can quickly spiral out of control.

 

  • Property damage: This covers the damage your teen (and their car) does to another person's property. This can include mailboxes, garage doors and even landscaping.

Most states have minimum requirements for liability but in almost all cases, this number is too low. "We recommend liability limits of 100/300/50 as a minimum for all drivers, including teens and young adults, but ideally you should buy 100/300/100 if you can afford it," says Gusner.

Remember, while carrying low limits may save some money in the short-term, if you’re a parent and your teen is an accident and the damages exceed your liability limits, you will have to pay the balance. This can put your home and retirement assets at risk if the accident is serious.

If you’re on your own as a driver in your 20s, you’re also at risk of having to fork over money out-of-pocket to cover the costs for accidents you cause that exceeds your insurance pay out.

  • Collision: This coverage pays to repair your vehicle if it is damaged in an accident. If your teen is in a car that you would repair after an accident you should be carrying this coverage. If it is an old clunker you would junk after an accident, drop this insurance.
  • Comprehensive: This insurance will cover the cost to repair your car if it is damaged by something other than a crash. Animal encounters, vandalism, fire and weather damage are all examples. Again, if the car would be repaired you should carry this coverage but drop it if your teen is in a clunker.
  • Umbrella: If you have a significant amount of assets you may want to put an umbrella policy in place which will kick in to cover liability claims once your car insurance hits its coverage limits. These polices are sold in $1 million increments and are very affordable.

How to keep your premium affordable: Shop your coverage

Adding a young driver to your policy or obtaining your first policy as a novice driver is always going to be expensive but there a few things you can do to ease the financial pain.

This is an excellent time to shop your coverage. Your current insurer will rerun your rates with the new driver so why not expand the search. Get quotes from at least five different insurers and always make sure you are comparing apples to apples when it comes to deductibles and coverage levels.

Cheap car insurance for new drivers under 21

To see an example of how much you can save, here are average rates by company for a 20-year- old buying full coverage with a $500 deductible. You’ll see how much rates differ between the highest and lowest offered from up to six insurers. That’s the amount you can save by comparing car insurance companies.

We found that the national average savings by comparing rates for this scenario, age 20 with full coverage, to be up to $2,486.

Geico offered the cheapest car insurance for new drivers under 21 among those we surveyed.

Enter your state to see how rates compare for where you live.

StateCompanyAverage rate$ savings between highest and lowest rate
AlaskaGeico$2,104$854
AlaskaState Farm$2,138
AlaskaProgressive$2,923
AlaskaAllstate$2,958
AlabamaGeico$1,356$3,024
AlabamaAllstate$2,309
AlabamaState Farm$3,400
AlabamaMid Century$3,780
AlabamaNationwide$3,792
AlabamaProgressive$4,380
ArkansasGeico$1,765$4,098
ArkansasState Farm$2,464
ArkansasFarmers$2,739
ArkansasAllstate$3,327
ArkansasNationwide$3,683
ArkansasProgressive$4,236
ArizonaGeico$1,608$1,780
ArizonaFarmers$2,895
ArizonaState Farm$3,030
ArizonaProgressive$3,072
ArizonaAllstate$3,173
ArizonaNationwide$3,388
CaliforniaGeico$2,126$2,949
CaliforniaUnited Financial$2,843
CaliforniaNorthbrook$3,140
CaliforniaState Farm$3,922
CaliforniaAmco$4,052
CaliforniaFarmers$5,075
ColoradoGeico$1,742$2,121
ColoradoState Farm$2,620
ColoradoProgressive$2,923
ColoradoFarmers$3,325
ColoradoAllstate$3,863
ConnecticutGeico$2,217$3,411
ConnecticutNationwide$3,074
ConnecticutState Farm$3,104
ConnecticutAllstate$4,320
ConnecticutForemost$5,269
ConnecticutProgressive$5,628
DCGeico$1,450$3,364
DCState Farm$3,416
DCProgressive$3,685
DCNationwide$4,357
DCAllstate$4,814
DelawareGeico$2,260$2,044
DelawareProgressive$3,377
DelawareState Farm$3,731
DelawareNationwide$4,231
DelawareAllstate$4,304
FloridaGeico$2,180$2,694
FloridaState Farm$3,050
Florida21st Century Centennial$3,385
FloridaProgressive$4,419
FloridaAllstate$4,874
GeorgiaGeico$1,574$2,913
GeorgiaState Farm$2,772
GeorgiaAllstate$3,159
GeorgiaNationwide$3,310
GeorgiaProgressive$4,487
HawaiiGeico$857$1,584
HawaiiState Farm$1,023
HawaiiAllstate$1,389
HawaiiProgressive$1,646
HawaiiFarmers$2,441
IowaGeico$1,186$2,490
IowaFarmers$1,789
IowaAmco$1,863
IowaState Farm$1,902
IowaAllstate$2,240
IowaProgressive$3,676
IdahoGeico$1,383$1,609
IdahoState Farm$1,788
IdahoFarmers$1,958
IdahoProgressive$1,985
IdahoDepositors$2,135
IdahoAllstate$2,992
IllinoisGeico$1,156$2,559
IllinoisAmco$1,711
IllinoisState Farm$2,144
IllinoisIllinois Farmers$2,876
IllinoisAllstate$3,336
IllinoisProgressive$3,715
IndianaGeico$1,182$1,548
IndianaIllinois Farmers Ins Co$1,542
IndianaNationwide$2,138
IndianaProgressive$2,228
IndianaState Farm$2,366
IndianaAllstate$2,730
KansasGeico$1,574$2,406
KansasNationwide$2,147
KansasState Farm$2,279
KansasFarmers$2,797
KansasAllstate$2,822
KansasProgressive$3,980
KentuckyGeico$1,728$3,239
KentuckyNationwide$3,238
KentuckyState Farm$3,477
KentuckyProgressive$4,673
KentuckyAllstate$4,967
LouisianaGeico$2,533$4,107
LouisianaState Farm$4,054
LouisianaAllstate$4,285
LouisianaProgressive$6,640
MassachusettsGeico$1,565$2,682
MassachusettsState Farm$1,788
MassachusettsProgressive$3,078
MassachusettsAllstate$4,247
MarylandGeico$2,037$1,257
MarylandNationwide$2,157
MarylandProgressive$2,661
MarylandState Farm$2,696
MarylandAllstate$3,294
MaineGeico$1,053$2,056
MaineState Farm$2,043
MaineAllstate$2,479
MaineProgressive$3,109
MichiganGeico$1,767$4,754
MichiganProgressive$3,071
MichiganTitan$3,633
MichiganFarmers$5,551
MichiganAllstate$5,840
MichiganState Farm$6,521
MinnesotaGeico$1,761$1,572
MinnesotaIllinois Farmers$1,935
MinnesotaState Farm$2,119
MinnesotaAllied$2,596
MinnesotaProgressive$2,996
MinnesotaAllstate$3,333
MissouriGeico$1,340$2,327
MissouriAllied$1,898
MissouriFarmers$2,515
MissouriState Farm$2,580
MissouriAllstate$2,725
MissouriProgressive$3,667
MississippiGeico$1,873$1,901
MississippiNationwide$2,085
MississippiState Farm$2,797
MississippiProgressive$3,610
MississippiAllstate$3,774
MontanaGeico$2,045$1,086
MontanaState Farm$2,263
MontanaProgressive$2,340
MontanaDepositors Ins Co$2,692
MontanaMid Century$2,804
MontanaAllstate$3,131
North CarolinaGeico$819$510
North CarolinaProgressive$945
North CarolinaFarmers$1,046
North CarolinaState Farm$1,163
North CarolinaNationwide$1,205
North CarolinaAllstate$1,249
North CarolinaNationwide$1,329
North DakotaAllied$1,738$3,236
North DakotaGeico$1,865
North DakotaState Farm$2,303
North DakotaAllstate$2,868
North DakotaProgressive$2,890
North DakotaMid Century$4,974
NebraskaAllied$1,706$2,081
NebraskaGeico$1,783
NebraskaMid Century$2,039
NebraskaState Farm$2,059
NebraskaAllstate$2,061
NebraskaProgressive$3,787
New HampshireGeico$1,048$3,613
New HampshireNationwide$1,746
New HampshireState Farm$2,179
New HampshireAllstate$2,512
New HampshireProgressive $4,661
New Jersey21st Century Centennial$1,436$2,472
New JerseyGeico$1,876
New JerseyProgressive$3,632
New JerseyState Farm$3,885
New JerseyAllstate$3,908
New MexicoGeico$1,390$2,600
New MexicoState Farm$2,216
New MexicoFarmers$2,745
New MexicoProgressive$3,166
New MexicoAllstate$3,990
NevadaGeico$1,831$2,872
NevadaMid Centurey$2,846
NevadaState Farm$3,664
NevadaAllstate$3,756
NevadaVictoria$4,664
NevadaProgressive$4,703
New YorkGeico$1,344$3,847
New YorkProgressive$3,018
New YorkAllstate$3,023
New YorkState Farm$3,785
New YorkNationwide$4,798
New YorkForemost$5,191
OhioGeico$1,142$1,951
OhioState Farm$1,928
OhioFarmers$2,154
OhioAllstate$2,215
OhioNationwide$2,854
OhioProgressive$3,093
OklahomaGeico$1,628$3,797
OklahomaState Farm$2,772
OklahomaFarmers$2,888
OklahomaAllstate$3,107
OklahomaProgressive$5,425
OregonGeico$1,722$1,924
OregonNationwide$2,274
OregonState Farm$2,339
OregonAllstate$3,008
OregonProgressive$3,502
OregonFarmers$3,646
PennsylvaniaGeico$1,311$4,278
PennsylvaniaNationwide$1,502
PennsylvaniaState Farm$2,942
PennsylvaniaAllstate$3,497
PennsylvaniaProgressive$5,589
Rhode IslanGeico$2,094$3,222
Rhode IslanState Farm$2,349
Rhode IslanNationwide$3,678
Rhode IslanAllstate$4,052
Rhode IslanProgressive$5,316
South CarolinaGeico$2,205$1,758
South CarolinaAllstate$2,426
South CarolinaNationwide$2,918
South CarolinaProgressive$3,945
South CarolinaState Farm$3,963
South DakotaGeico$1,513$1,468
South DakotaMid Century$2,150
South DakotaState Farm$2,193
South DakotaProgressive$2,241
South DakotaAmco Ins Co$2,283
South DakotaAllstate$2,981
TennesseeGeico$1,425$2,294
TennesseeNationwide$2,030
TennesseeState Farm$2,447
TennesseeMid Century$3,080
TennesseeAllstate$3,362
TennesseeProgressive$3,719
TexasFarmers$1,758$2,467
TexasGeico$2,302
TexasState Farm$2,886
TexasColonial$2,997
TexasProgressive$3,782
TexasAllstate$4,225
UtahGeico$1,081$4,021
UtahAllstate$2,228
UtahMid Century$2,483
UtahAllied$2,754
UtahState Farm$3,234
UtahProgressive$4,102
VirginiaNationwide$1,556$1,666
VirginiaGeico$1,955
VirginiaState Farm$2,076
VirginiaAllstate$2,557
VirginiaProgressive$3,222
VermontGeico$1,064$2,277
VermontNationwide$1,760
VermontState Farm$2,621
VermontAllstate$2,840
VermontProgressive$3,341
WashingtonGeico$2,105$910
WashingtonState Farm$2,271
WashingtonFarmers$2,429
WashingtonNationwide$2,565
WashingtonAllstate$2,570
WashingtonProgressive$3,015
WisconsinGeico$1,115$4,586
WisconsinState Farm$1,961
WisconsinAllstate$2,194
WisconsinMid Century$2,429
WisconsinArtisan & Truckers$2,826
WisconsinAmco Ins Co$5,701
West VirginiaGeico$2,149$1,296
West VirginiaState Farm$2,772
West VirginiaNationwide$2,931
West VirginiaProgressive$2,945
West VirginiaAllstate$3,445
WyomingGeico$2,510$1,212
WyomingState Farm$2,602
WyomingAllstate$3,197
WyomingFarmers Ins$3,722

You can also use our average car insurance rate tool for ages 20 and older, to see what you can expect to pay for three different coverall levels, and how much you can save by comparison shopping.

Discounts for young drivers and parents of teen drivers

Also, consider discounts you may be eligible for that can lower your rates.

  • Good student discount: Most insurance companies will offer a discount to students who keep their grades up. While guidelines vary, most require a 3.0 grade point or above. You should see a discount of 10 to 15 percent.
  • Defensive driving course: A defensive driving course helps drivers of all ages learn how to handle dangerous driving situations safely. Many insurers will offer a discount to those who take and pass a defensive driving course. The discount will vary but expect around 10 percent. Check with your insurer for a list of approved courses.
  • Safety discount: The car you drive will impact the rates. While an old clunker will often be the cheapest option, it's not always the safest. A new vehicle that is loaded with safety features should result in a discount. Features that may result in a discount include anti-theft devices, anti-lock brakes (ABS), adaptive cruise control, lane departure warning and collision preparation systems. Check with your insurer to see what safety features will lower your premium.
  • Bundle with home insurance: For parents of young drivers who are homeowners, ask about a bundle discount. "If you are carrying a homeowners, life or other policies with the same insurer, you should be getting a bundling discount. Discounts vary but you should expect around 25 percent," says Gusner.
  • Student away discount: If a young driver is a student living 100 miles from home and doesn’t take a family vehicle to school, parents can get a car insurance discount. Most insurers will lower your rate if your teen doesn't have regular access to a car. You should leave them on your policy so they can still drive when home on breaks.

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