10 Top Car Insurance Companies for Young Adults in 2021

10 Top Car Insurance Companies for Young Adults in 2021

When you’re a teenager or a young adult, buying car insurance is rarely fun or affordable. This is true for anyone trying to add coverage to a parent’s existing policy, but it’s even more true for young adults who need to find cheap car insurance on their own. 

If you’re looking for the best cheap car insurance for young adults, you’ll need to compare policies and plans while also checking for discounts you might qualify for. 

Here are a few places to start your search for affordable car insurance for young drivers.

10 Top Car Insurance Companies for Young Drivers

The companies listed below generally offer the best insurance for young drivers, but any one of them might not be competitive in the state you live in. Check with several insurers, and find a company who has the best coverage for the lowest premium in your state.

GEICO

Geico is one of the most price competitive auto insurers on the market, and it offers quite a few discounts and programs for young drivers:

  • Family Pricing Program. The family pricing program lets young drivers get the same policy rates as experienced drivers within the same family. This plan lets young drivers establish a good driving record without paying high premiums that are typical for new drivers.
  • Accident Forgiveness Program. This discount applies to only one member of the family on a single policy. It helps you avoid surging premiums in the event of an at-fault accident.
  • Good Driver Program. Save up to 22% on your premium with the Five-Year Accident-Free Good Driver Discount. Five years might seem like a long time, but if you begin a policy at 16, you’ll qualify for the discount by the time you’re 21.
  • Corporate/Eagle (Federal Government). This discount is valid with participating employers, yet it’s also available to federal employees. It can reduce your premium by up to 12%.
  • Military. Save up to 15% off your premiums if you’re a member of the military.
  • Good Student. This discount is available to drivers between the ages of 16 and 24 who are full-time students with a “B” average or better.

Progressive

Progressive is well known for having some of the lowest auto insurance rates possible, including some of the cheapest auto insurance premiums for young adults. In terms of rates, pricing really comes down to the discounts it offers.

Safe Driver Discount. This discount is one of the most aggressive in the industry. You can save up to 31% on your premium if you haven’t had an at-fault accident or moving violation within the past three years. Most other insurance companies require at least five years without any incidents to qualify for this discount.

Additional Progressive discounts include:

  • Teen Driver Discount. This discount makes it possible to get lower rates than you normally would when adding a teen driver to an existing policy.
  • Online Quote and Signup Discounts. Save up to 7% off your auto insurance premiums if you shop for a quote online, and a separate 9% discount when signing forms for a policy online.
  • Pay in Full. Save money on your premiums by paying the entire amount upfront. Progressive’s policies are billed in six-month increments, so it’s just a matter of making all six payments at one time.
  • Good Student Discount. Get up to a 10% discount for having a “B” GPA or better.
  • Snapshot Program. Get a discount based on your actual driving. Progressive claims the use of the tool rewards the average driver with $145 off their premiums.

Branch

Branch is a newer auto insurance provider that aims to increase transparency and lower costs for most drivers, including young adults. Founded in 2017, Branch lets customers buy insurance directly, which keeps costs down. 

This company also lets you price out a policy in 30 seconds, and it boasts A+ ratings for financial strength. Branch also has an updated digital claims process that lets customers file and manage claims, online or through its mobile app, without the hassle of calling into a claims center. 

Discounts. Branch doesn’t list many specific discounts you can qualify for other than a refer-a-friend program and a Community Pledge program. The Community Pledge program lets you accrue savings for each person who vouches you wouldn’t commit insurance fraud. 

This provider promises to help consumers get the lowest pricing without bundling auto insurance with homeowners or renters insurance coverage. However, you do have the option to shop around with Branch for quotes on homeowners insurance, renters insurance, or umbrella insurance coverage as well. 

Branch is only offering insurance in eight states right now: Arizona, Colorado, Illinois, Indiana, Missouri, Ohio, Oklahoma, and Texas.

Allstate

Allstate offers a large number of discounts that help both teens and young adults get a break on their auto insurance costs. For example, you’ll get a discount if you’re under the age of 25 and a full-time student. Like most auto insurers, Allstate also offers a discount if you have good grades. 

It also offers a discount if you maintain both auto and renter’s insurance with the company. There’s also a discount if you work for certain employers that offer special discount programs (check with your employer’s human resources department). You might even get a discount if you’re self-employed and work from home.

Still, Allstate is best known for is its Accident Forgiveness program. It doesn’t help you lower your premium at first, but your premium won’t increase if you have an accident. Just keep in mind that Accident Forgiveness applies only to your first accident. 

Allstate also has a Safe Driving Bonus program. If you add this feature to your policy, you get a check in the mail every six months you don’t have an accident. This is Allstate’s way of incentivizing good driving habits.

Esurance

One of the advantages with Esurance is it’s consistently one of the lowest-priced auto insurance carriers in the industry. This makes it highly likely that it’ll offer the best insurance for young drivers, too. 

Esurance provides the following discounts:

  • Good Student Discount. Full-time students who maintain a GPA of 3.0 (B) or better qualify for this discount. You must also qualify under the Multi-Car discount for adding more than one vehicle to the policy.
  • Claim-Free Discount. This discount is available if you’ve driven for at least five years with no at-fault accidents or moving violations. This saves drivers 10% to 25%.
  • Switch and Save Discount. If you have auto insurance coverage from another company and 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.
  • Safe Driver Discount. When you enroll in this program, the Drivesense mobile app customizes your discount based on your driving habits.

Liberty Mutual

Liberty Mutual has some interesting discounts, some of which can work perfectly for young drivers who need a break on their insurance premiums. 

Here are a few discounts to ask about:

  • Away at School Discount. If your child is a student who’s attending school at least 100 miles from home, this discount might apply to your policy.
  • Driver Training Discount. Complete a driver training course for a discount on auto insurance premiums. 
  • Good Student Discount. Full-time students who maintain a GPA minimum of 3.0 (B), and are under the age of 25, are eligible for this discount.
  • Discounts for No Accidents or Violations. The whole family can save on auto insurance premiums when accidents and violations are avoided over time.
  • Military Discount. Active duty military members and their families can save on auto insurance premiums, too.

State Farm

State Farm offers its 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. This discount can save you up to 20% off your auto insurance premiums. It won’t help you when you first sign up for a policy, but it’s certainly something to aim for.

A few other discounts offered by State Farm include:

  • Drive Safe & Save Discount. This program uses information from your smartphone or your vehicle’s OnStar or SYNC communication service to calculate your discount.
  • Defensive Driving Course Discount. Customers who complete a defensive driving course can receive 10% to 15% off.
  • Student Away at School Discount. If you are a student under the age of 25, living away from home while enrolled in school, and only using your car while at home, you might qualify for this discount. 
  • Good Student Discount. This discount can cut your auto insurance premium by as much as 25%.

Nationwide

Nationwide offers its own popular Accident Forgiveness program. It’s not available in all states, but it’s still one of the major benefits offered for teen drivers.

This is an important benefit since young drivers are statistically more likely to be involved in accidents than experienced drivers. Under the plan, your premium won’t increase after one accident (but only one!).

Nationwide offers its customers with additional discounts to reduce the cost of young driver coverage:

  • Good Student Discount. If you’re a full-time student, Nationwide offers a Good Student Discount. You can qualify for the discount if you maintain a grade point average of “B” or better.
  • Employer-Sponsored Plan Discount. If you work for an employer who participates in a Nationwide discount plan, you can get a break there. 
  • Multi-Policy Discount. You can also get a discount by bundling your auto insurance with other policies, such as renter’s insurance.
  • SmartRide Discount. Nationwide also offers a discount if you meet safe driver criteria as determined by use of a plug-in device. It’s a usage-based insurance program that enables you to earn a discount for safe driving.

And, as is often the case, you can get proportionately less expensive coverage by remaining on your family’s auto insurance plan.

USAA

USAA offers several different discounts to young drivers who belong in military families, including the following: 

  • Driver Training Discount. You can get a discount if you are under 21 and complete a basic driver training course. 
  • Safe Driving Discount. Reduce your premiums by maintaining a good driving record for at least five years.
  • Good Student Discount. Young drivers get a discount with good grades at school.
  • Family Discount. Pay less for auto insurance when you add a teenager or young adult to an existing family policy.

Amica

Amica isn’t well known for having the cheapest auto insurance for young adults. However, it has many discounts that provide young drivers with a serious reduction in their auto insurance premiums.

  • Accident-Free Discount. Amica offers 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.
  • Good Student Discount. This discount reduces your premium if you maintain a “B” average or higher, and you’re between ages 15 to 25.
  • Student Away at School Discount. If you go to school away from home and only drive occasionally, you can save money that way 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 its Loyalty 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 increases the longer you’re with Amica. Its Legacy Discount is also available to drivers who are under age 30 and whose parents have had an Amica auto insurance policy for at least the past five years.

Young Driver Auto Insurance Rates vs. Other Drivers

The average premium for young drivers varies depending on where you live, whether you remain on a parent’s policy, and other factors. A recent report from The Zebra shows just how much more expensive auto insurance can be for young people.

According to its most recent figures, drivers in the “teen” age group pay the most, with a typical 16-year-old driver paying an average of $5,744 per year for their own car insurance policy. Meanwhile, the average annual cost for all teeangers works out to $4,573, annually. 

From there, each age group pays less and less for auto insurance premiums until drivers reach their 60s and prices increase slightly.

Driver Age Group Average Car Insurance Premium (Annual)
20s $1,887
30s $1,449
40s $1,394
50s $1,298
60s $1,315
70s $1,523
80s $1,765

Why Auto Insurance Is More Expensive for Young Drivers

The main reason young people pay the highest premiums for auto insurance is their general lack of driving experience. Driving requires a reflexive response and an undeniable level of intuition. As an inexperienced driver, young people haven’t developed those qualities.

Also, all insurance companies price their policies based on the risk the insured presents for the company. From an insurance company standpoint, there’s a lack of measurable driving history.

There’s no way to adequately assess the risk for someone who has never driven. Even for the young person who’s driven for just one or two years, the track record is considered insufficient to make a determination. That leads to higher rates lasting for several years.

Additional Factors that Affect Young Driver Car Insurance Rates

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. 

Interestingly, a Liberty Mutual survey 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 might have decades of driving experience are being watched by their less experienced teens. Young drivers then adopt the same dangerous driving habits like speeding, texting at stop lights, and failing to follow other traffic laws.

Safe driving is key to getting and maintaining affordable car insurance, period, but especially for young drivers.

How to Lower Your Auto Insurance Premiums

Choosing the right insurance company’s the best way to get the best coverage for the lowest annual cost.

There are many discounts available through most providers. You can save big by taking advantage of available discounts, but you might have to ask your insurance provider to apply them to your policy.

How Young Drivers Can Minimize Insurance Costs

Here are some other steps you can take as a new driver to save money on premiums:

  • Remain on your parent’s auto insurance policy. Since young adults don’t have a driving track record, they can benefit from the parent’s driving history. It’ll 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, you can keep premiums from increasing by avoiding accidents and violations.
  • Take driving courses. Driving courses have an immediate benefit. If you complete a course, an insurance company applies the discount right away. Make sure the course is approved by the company, and the cost of the course doesn’t outweigh the discount.
  • Maintain good grades. This discount almost always means you must maintain a minimum grade point average of 3.0 (B) or better. 
  • Away-from-home discounts. Students who live away from home when school is in session, and only drive occasionally when they’re home, pay less for insurance coverage.
  • Affiliation discounts. You can pay less if you belong to a fraternity, a sorority or any other organization that offers an affiliation discount.
  • Military discounts. These discounts lead to lower premiums for members of the military, the Reserves, or the National Guard.
  • Safety equipment discounts. You can receive savings with qualified safety features in your car, like airbags, anti-lock brakes, or a tracking device.

These are just some of the auto insurance discounts for students, but there might be others depending on the company you choose for coverage. When you shop around for your auto insurance policy, make sure to ask which discounts you might be eligible for.

How Parents Can Minimize Insurance Costs

If you’re a parent who’d like to keep auto insurance costs low without sacrificing coverage, adding a teenager or a young adult to your policy can be frustrating. These tips can help you keep insurance costs down:

  • Bundle all of your insurance with one company. Most big insurance companies offer multi-policy discounts that make insurance more affordable. Bundle your auto insurance, homeowners insurance, umbrella insurance, and other coverage to pay less for all your car insurance coverage over the years.
  • Keep your insurance company up-to-date. Some auto insurance discounts only apply to your policy if you specifically call and ask. Parents should be proactive when it comes to pursuing discounts for good grades, students who live away from home, and other discounts that require self-reporting.
  • Maintain a good credit score. Your auto insurance rates can go up or down depending on your credit score. If you know your credit needs work, easy ways to improve your credit score include paying down debt to lower your credit utilization rate, making sure you pay your bills early or on time, and refraining from opening or closing too many accounts.

Getting the Best Insurance as a Young Driver

Although finding affordable auto insurance as a young person can be challenging, the high rates you might have to pay won’t last forever. You’re generally considered a high-risk driver until the age of 25. After that, you can expect your auto insurance premiums to decrease.

In the meantime, make sure you compare auto insurance quotes for the best rate. It might feel time-consuming to research and compare pricing, it’s the best way for anyone to get auto insurance at a price they can afford.

The post 10 Top Car Insurance Companies for Young Adults in 2021 appeared first on Good Financial Cents®.

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