As a driver for the past several years, you likely feel more confident on the road and in your life as a blossoming young adult. You’re learning to be responsible and take care of life’s essentials, including being a safe driver and paying for car insurance. Since you’ve got a bit of a driver history now, your car insurance rates should be much lower than your teen years, right?
Not quite. While young drivers pay 63% less annually than they did as teens at an annual average of $5,914, they’re still higher than what older adults pay for car insurance. The national average for an adult male driver aged 25-60 is $1,908. This is $1,184 less than the national average annual for a young adult aged 20-24 at $3,092, according to recent CarInsurance.com data.
If you’re feeling the crunch of paying for high car insurance premiums, it may be time to start shopping for a new policy or trying some cost-saving strategies. Learn more about car insurance for young drivers, annual premiums and cheapest insurance companies, as well as the types of coverage and how much car insurance you need.
- Young drivers’ car insurance is expensive, but discounts and choosing the right coverage options can save you money.
- On average, young drivers pay $3,092 annually for car insurance (or $258 monthly).
- Young drivers can anticipate seeing their rates decrease significantly in their early 20s – $258 monthly – after paying $493 per month, on average, as a teen.
Why do I need car insurance for young drivers?
“If you own a vehicle and can’t pay to repair or replace it, you typically need full coverage auto insurance to protect your finances,” says Laura Adams, MBA, an award-winning author, podcaster, and founder of The Money Stack.
To ensure you and your vehicle are protected at all times on the road depends on your car insurance coverage. Purchase enough car insurance coverage that’s both within your budget and ensures you won’t experience a vehicle or financial loss.
As a young driver between 20 and 24 years old, you may fall into one of two scenarios when it comes to car insurance: You’re seeking your own or you’re still being covered by a parent or guardian’s policy. Car insurance is required in most states across the country.
In general, motorized vehicles must carry proof of liability insurance coverage — coverage that protects other drivers’ medical and property damage — at all times, according to the U.S. Department of State.
Learn more about the types of insurance coverage options to determine what may be best for your needs before you start shopping around.
What are the types of car insurance for young drivers?
There are various types of car insurance coverage, ranging from liability to full coverage options. While liability is often the most affordable option, it may not provide enough coverage to protect you or your vehicle in an accident.
As a young adult, you likely travel to and from work, home, shopping and college or university. You may also travel out of state on road trips and to visit family and friends. How much you drive and the vehicle you drive can impact the type of car insurance you need.
Liability coverage
Liability car insurance typically fulfills your state’s minimum requirements and provides protection for property damage and bodily injury.
- Bodily injury liability car insurance: During an accident, this portion of liability coverage will pay for the other driver’s medical bills.
- Property damage liability car insurance: Any vehicle repairs, replacement or property damage that may be needed to the other driver’s vehicle will be covered by this portion of liability insurance.
There are specific liability limits you will need to define when you’re shopping for car insurance. These are often listed as numbers, such as 50/100/50 and represent the limits you are covered up to. After that, you will pay the remaining accident costs out of pocket.
- The first number represents the per-person limit of $50,000
- The second number represents the per-accident limit of $100,000
- The third number represents the property damage liability limit for vehicle repairs up to $50,000
These limits cover bodily injuries and death you may be responsible for, including medical and funeral expenses, loss of income, pain and suffering and legal defense. You may also have legal defense coverage if needed.
Comprehensive car insurance
It’s easy to think that car insurance is only necessary for accidents. However, other incidents can impact your vehicle while it’s parked. Comprehensive car insurance protects against weather damage — including fire, flood and hail — and theft, vandalism, a broken windshield or an animal collision.
If you experience vehicle damage outside of your control, your insurance company will typically pay for repairs or pay you a lump cash payment if your vehicle is a total loss. Remember that you may be required to purchase full coverage — including collision and comprehensive car insurance coverage — if you owe money on your vehicle.
Collision car insurance
You swear you were just changing the radio channel when you saw brake lights in front of you and couldn’t stop. This common scenario is where collision car insurance coverage comes in. This type of coverage will pay for repair costs or vehicle replacement regardless of fault — up to the actual cash value of their vehicle.
While liability insurance covers the person you may have hit, your vehicle is not covered unless you have opted for collision car insurance coverage. You may want collision insurance if your vehicle is less than 10 years old or more than 10 years old, but worth $3,000 or more, and you wouldn’t be able to replace it if it was totaled in an accident.
Liability, comprehensive and collision comprise full coverage car insurance.
GAP or guaranteed asset protection
If you have a car lease or loan, chances are you need GAP insurance — coverage for the gap between your vehicle’s actual cash value (ACV) and the amount you still owe on a lease or loan. In the event that your vehicle is deemed a total loss after an accident or it’s stolen, GAP insurance can help ensure you receive money back on your purchase.
Generally, a newer vehicle loses its value once it’s driven off the dealership lot, estimated at 20% of its value in the first year and about 15% per year until it’s four years old. This may mean you owe more on the loan than the vehicle is worth. Once you have filed a GAP insurance claim, your insurance company will typically cut you a check for the vehicle’s ACV at that time. This can help you get back on the road quickly without a major financial loss.
Medical payments coverage
While it’s typical to think about what coverage you may need for your vehicle, it’s equally important to consider what medical coverage you may need if you’re involved in an accident. Even fender benders may result in whiplash or cuts and bruises that require medical care. Liability coverage will provide medical care to the other driver, but it does not cover the care you may need.
Medical payment coverage (MedPay) is a type of coverage that helps pay for medical expenses incurred during a car accident, regardless of fault. This type of coverage also generally protects passengers in the vehicle during the accident and may be added to other family members in the same household’s policy.
MedPay provides financial assistance with hospital, surgical and chiropractor expenses, funerals, prosthetics, dental and X-rays. It also protects policyholders who are riding as a passenger in another person’s vehicle or if they are struck by a vehicle as a pedestrian.
Personal injury protection
Personal injury protection (PIP) is another type of medical coverage option that offers “no-fault insurance” for medical expenses if you or your passengers are injured in a car accident. It may also protect against loss of income or any disability needs.
PIP coverage is specific for car-related injuries, which can be used in addition to any medical health care coverage you have. Your state may require this type of insurance, so it’s worth knowing if you need to include it in your policy.
Roadside assistance
You’re inevitably running late to work only to find that your car won’t start. Somehow, a light has been left on overnight and the battery is drained. With roadside assistance coverage, you can simply call a number provided by your insurance company to help jump-start your vehicle.
Roadside assistance provides minor service support and tows and can often cover minor mechanical repairs your vehicle may need. Typically, the services that are provided under this coverage include flat tire fixes, battery jump-starts, assistance with lockouts, fuel delivery, extrication from a ditch (within limits) and a tow to an auto shop or to your home.
How much car insurance should I buy?
Young drivers are still considered a higher-risk driving group because of their inexperience and their tendency to be involved in accidents. Typically, rates remain lower than teen rates and decrease further after age 25.
Initially, you may need more coverage than what liability offers, but you may not need as much as a full coverage policy. You must determine what insurance coverage limits and options fit within your budget and protect you and your vehicle. This can help ensure you don’t experience significant financial loss after an accident. Knowing what you may need before you start shopping for car insurance as a young driver can help you find the best coverage for your situation.
“You need enough auto liability to protect your non-retirement net worth if you were found at fault in a lawsuit,” says Laura Adams, MBA, an award-winning author, podcaster, and founder of The Money Stack. “You need enough comprehensive and collision coverage to pay for a vehicle if it gets totaled or stolen. Plus, you may need other coverages required in your state, such as personal injury protection.”
Check out our experts’ recommendations for how much car insurance you need
How to shop for car insurance for young drivers
In the digital age, defaulting to purchasing your needs online is easy. Shopping for car insurance is often no exception. There are many options for finding car insurance quotes online; selecting the cheapest option may be your first instinct. But how do you know which is the best for you?
If you’re new to car insurance shopping, it may help to call a couple of insurance agents to discuss your needs and budget and discuss your driving history and personal details. This can help you find personalized quotes. However, if you’re familiar with what you need and are looking for a new policy, shopping online may be your best bet.
Learn more about the pros of purchasing either from an agent or online in the following points.
Pros of buying car insurance for young drivers online
- It’s convenient – you can compare quotes from multiple insurance companies at once.
- With an online quote, you fill out a short form and get quotes quickly.
- It’s flexible, so you can shop online for car insurance anytime.
- Avoid sales pressure by shopping online.
Pros of buying car insurance for young adults with an agent
- Discuss your options thoroughly — you can ask questions and learn more about coverage options.
- Learn what discounts may be available to you, which can end up saving you quite a bit on higher coverage premiums
- Receive guidance from a professional who understands the insurance business and can make recommendations for your situation.
Compare quotes for car insurance for young drivers
When you’re ready to start shopping for your policy, getting at least three quotes for a comparison is a good idea. This can help you understand coverage limits and premiums, and help you determine what insurance company you may prefer. It’s also a good idea to get quotes from both online insurance companies and by calling agents.
While it may be tempting to purchase the most affordable quote, it can help you save by doing your research, talking to agents and asking your network. Your friends and family may have great insight on good ways to save at your age and refer you to trusted companies.
Compare car insurance quotes from over 25 companies with a rate calculator
Gather required information
Your car insurance quotes are often personalized to who you are and what your driving history says. Whenever you get a quote, that insurance company analyzes your level of risk with your age, gender, the vehicle you drive, if you’ve had any previous incidents on your record and other factors.
It’s important that you’re prepared to shop for quotes. Before you start, compile the necessary information you will likely be asked to provide. The following information is some of the basics you’ll need to share:
- Date of birth
- Driver’s license number
- Driving record
- Insurance history
- Social Security Number (SSN)
- Vehicle Identification Number (VIN)
- Address where the vehicle is stored
Choose your coverage
After you’ve done your research, compared quotes, talked to various individuals and reviewed your budget, you’re likely ready to choose your coverage. It’s important to also keep in mind that your premiums will likely decrease slightly each year you get closer to 25 years old. After that point, you should anticipate a sharp decrease in rates as long as you have no violations on your driving record.
In general, you’ll be required to purchase at least your state’s minimum liability requirement, but CarInsurance.com recommends full coverage with the following liability limits:
- $100,000 in liability for injuries to others
- $300,000 personal injury per accident
- $100,000 for property damages
However, you may want to add on additional protections based on your personal driving needs and preferences. For example, if you commute for a longer period of time every day, say around 30 minutes, you may want to add roadside assistance.
When deciding on the right coverage as a young driver, it’s also important to consider what you may have to pay out-of-pocket should you be involved in an incident and not have the right coverage options in place. Insurers often charge less for some vehicle models, especially those with safety features, airbags and antilock brakes.
Save on car insurance for young drivers through discounts and bundling
One of the easiest ways to save on car insurance as a young driver is to review all the discounts available to you. Did you know you can get a rate reduction just for being a great student or keeping your overall driving miles low? Take a look at some potential discounts for your age group and remember to review them with your car insurance company.
- Away-from-home student discount: The student away discount is available to full-time students (typically younger than 25) living 100 miles or more from home without a vehicle on a parent’s insurance policy. Discounts typically average between 15% and 30%.
- Bundling insurance policies: Combining, or bundling, multiple insurance policies with your insurance company can save you money on your premiums. This includes having a renters and auto insurance policy under one insurer. Discounts typically range from 4% to 13%.
- Defensive driving course: While it may have been some time since you took a driving class, participating in a defensive driving course can increase your safety on the road and decrease your chance of an accident. It could also lower your overall rate by up to 10% off your rate.
- Good student discount: Maintaining good grades and a 3.0 GPA can help you save on your car insurance. The good student discount typically offers a 14% savings and is easy to add on with proof of transcript.
- Low mileage discounts: If you don’t use your vehicle often and tend to bike or walk to work or school, you may be looking at a discount. In general, if you’re driving less than 7,500 miles annually, you can discuss a potential discount of up to 9% on your rate.
- Loyalty discounts: The rule of thumb in car insurance is to shop around annually. This helps you find more affordable coverage options and some insurers have incentives for new customers. However, if you’re happy with your insurer and rate, you should ask about loyalty discounts. Typically, these range from 5% to 11% and often increase each year you stay with your insurer.
- Payment options: If you can pay your entire annual premium in one lump sum, you could be looking at a discount of up to 9%. The same goes for setting up automatic monthly payments. This can save you up to 4%, and ensure your insurance is paid on time.
- Safety features: What you drive can help you save on insurance premiums.Typically the safer your vehicle is, the less you pay for insurance. You could receive a discount of up to 4% if your vehicle has anti-lock brakes, anti-theft devices, airbags, adaptive cruise control, lane warnings and collision preparation systems.
How much does car insurance cost for young drivers?
Car insurance for young adults may not be as pricey as it is for teens, but it’s also not as affordable as it will be after several more years of acquiring an established good driving history. On average, young adults pay $3,092 annually for car insurance.
The most affordable full coverage car insurance for young adults is USAA at an average annual rate of $2,203 and Travelers insurance at an average annual rate of $2.601. Keep in mind that USAA is only available to military community members and their families.
For liability-only insurance, young adults can find the most affordable rates at USAA for an average annual rate of $521 and Geico for an average annual rate of $611. Explore additional teen, young adult and adult car insurance rates below.
| Company | State minimum | 50/100/50 liability only | Full coverage |
|---|---|---|---|
| USAA | $521 | $656 | $2,203 |
| Travelers | $770 | $933 | $2,601 |
| Auto-Owners | $616 | $721 | $2,655 |
| Geico | $611 | $801 | $2,710 |
| Nationwide | $940 | $1,100 | $2,718 |
| Progressive | $863 | $1,084 | $3,444 |
| State Farm | $910 | $1,120 | $3,472 |
| Allstate | $994 | $1,239 | $4,175 |
| Farmers | $1,412 | $1,847 | $4,722 |
Learn more about how to get cheap car insurance for young drivers
Final thoughts on car insurance shopping for young drivers
Adulting is a skill and one that you’re learning more and more every day. Navigating car insurance, either on your own or through your parents’ policy, is a responsibility you must master. One way to do that is by educating yourself and understanding your purchase.
While shopping for car insurance as a young driver can be expensive, there are several things you can do to lower your costs: Compare quotes, talk to insurance agents, friends and family, ask about discounts and know what you need to ensure your safety on the road and that you don’t experience a financial loss should you be involved in an accident.
Remember, keep your record in good order so that when you reach the 25-year-old milestone, you’ll see a drop in your car insurance rates.
Check out our detailed guide on how much does insurance cost for young drivers
Laura Adams
Author, podcaster and founder of The Money StackHow much car insurance do I need?
“You need enough auto liability to protect your non-retirement net worth if you were found at fault in a lawsuit. You need enough comprehensive and collision coverage to pay for a vehicle if it gets totaled or stolen. Plus, you may need other coverages required in your state, such as personal injury protection.”
Resources & Methodology
Sources
U.S. Department of State. “Vehicle liability insurance requirements.” Accessed February 2024.
Methodology
CarInsurance.com editors in 2023 collected rates from Quadrant Information Services for a 20- to 24-year-old male driving a Honda Accord LX with a good insurance score and no violation on record for a full coverage insurance policy with limits 100/300/100 and $500 comprehensive and collision deductible. We analyzed 53,409,632 records, 34,588 ZIP codes and 170 insurance companies nationwide.
Ask the Insurance Expert
Laura Longero
Executive Editor
Laura is an award-winning editor with experience in content and communications covering auto insurance and personal finance. She has written for several media outlets, including the USA Today Network. She most recently worked in the public sector for the Nevada Department of Transportation.
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John McCormick
Editorial Director
John is the editorial director for CarInsurance.com, Insurance.com and Insure.com. Before joining QuinStreet, John was a deputy editor at The Wall Street Journal and had been an editor and reporter at a number of other media outlets where he covered insurance, personal finance, and technology.
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Leslie Kasperowicz
Managing Editor
Leslie Kasperowicz is an insurance educator and content creation professional with nearly two decades of experience first directly in the insurance industry at Farmers Insurance and then as a writer, researcher, and educator for insurance shoppers writing for sites like ExpertInsuranceReviews.com and InsuranceHotline.com and managing content, now at CarInsurance.com.
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Nupur Gambhir
Managing Editor
Nupur Gambhir is a content editor and licensed life, health, and disability insurance expert. She has extensive experience bringing brands to life and has built award-nominated campaigns for travel and tech. Her insurance expertise has been featured in Bloomberg News, Forbes Advisor, CNET, Fortune, Slate, Real Simple, Lifehacker, The Financial Gym, and the end-of-life planning service.