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Teens and young drivers pay the most for car insurance coverage, but companies like State Farm, Geico, USAA and Progressive offer affordable coverage Secure. Fast. Free.
Daniel is a MarketWatch Guides team writer and has written for numerous automotive news sites and marketing firms across the U.S., U.K., and Australia, specializing in auto finance and car care topics. Daniel is a MarketWatch Guides team authority on auto insurance, loans, warranty options, auto services and more.
Rashawn Mitchner is a MarketWatch Guides team editor with over 10 years of experience covering personal finance and insurance topics.
Teenage and young driver car insurance is notoriously high because of the risk new drivers pose to car insurance companies. In our research, we at the MarketWatch Guides team found that the national average estimate for adding a teen driver to a policy is $5,297 per year or $441 per month.
This article will explore the best car insurance options for teens and young adults, the coverage needs of teenage drivers and what factors influence the price of an auto insurance policy.
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The MarketWatch Guides Team is committed to providing reliable information to help you make the best decision possible about insuring your vehicle. Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best car insurance companies. We collected data on dozens of auto insurance providers to grade the companies on a wide range of ranking factors. After 800 hours of research, the end result was an overall rating for each provider, with the insurers that scored the most points topping the list.
Learn more about our methodology and editorial guidelines.
After hundreds of hours of research, we’ve identified the best car insurance company for teens and young adult drivers. Each insurer was rated across five main categories: reputation, customer experience, coverage, availability and cost. Scores were compiled to generate an overall rating.
The table below shows the top five best car insurance companies for teens and young drivers. Along with the overall rating we give each provider, we also provide the average annual cost of a full-coverage policy.
While we rated State Farm the highest provider overall, the best car insurance company for teens and young adults will depend on one’s specific situation and overall needs.
Besides State Farm, we identified four other car insurance providers worth considering as you shop around for coverage. The section below will give you an in-depth look into each of the best and cheapest car insurance companies for teens and young drivers on our list.
J.D. Power claims satisfaction rating: 882/1,000
AM Best financial strength score: A++
Better Business Bureau (BBB) rating: A
Telematics programs: Drive Safe & Save™, Steer Clear®
Keep reading: State Farm insurance review
State Farm is one of the very few companies that provides affordable car insurance costs for car insurance for teens that average less than $2,000 per year.
The company also offers various savings opportunities that are specifically aimed at younger drivers, such as a 25%-off good student discount that rewards those who maintain good grades. If you have a college student away at school without a vehicle, you can also get a policy discount.
State Farm has a telematics program aimed specifically at drivers under the age of 25. Along with monitoring driving habits, the Steer Clear program offers driver education lessons and certifications that can earn teen drivers even lower rates.
J.D. Power claims satisfaction rating: 874/1,000
AM Best financial strength score: A++
BBB rating: A+
Telematics program: DriveEasy
Keep reading: Geico insurance review
Geico offers some of the industry’s lowest average rate estimates on car insurance for teens. In addition to its low prices, the company offers a good student discount that can help young motorists pay even less.
Teen drivers can also take advantage of Geico’s defensive driving discount, which lowers rates after the completion of an approved safe driver course. While this discount is available to drivers of all ages, it’s especially valuable for teens who could benefit from added instruction.
J.D. Power claims satisfaction rating: 990/1,000
AM Best financial strength score: A++
BBB rating: NR
Telematics program: SafePilot®
Keep reading: USAA insurance review
According to our data, USAA typically provides the lowest average car-insurance estimates for teen drivers. The company also offers discounts aimed at younger drivers, such as savings for good students and a defensive driving discount.
While USAA ranks higher than Geico overall for us, we ranked it lower on the list for young drivers because of its stricter eligibility guidelines. You must either be a member of the military or the family of one to get auto coverage from USAA. If you do qualify, you may be able to find the lowest rates possible on car insurance for teen drivers or young adult drivers from USAA.
J.D. Power claims satisfaction rating: 861/1,000
AM Best financial strength score: A+
BBB rating: Not rated
Telematics program: Snapshot ®
Keep reading: Progressive insurance review
Progressive has targeted its plans toward high-risk drivers for decades. While the company already offers reasonable rates for younger drivers, it’s an especially strong choice for teen drivers with moving violations or at-fault accidents on their driving record.
Progressive also offers specific discounts for teen drivers who have been insured for at least a year. Combining that savings opportunity with the company’s good student discount can go a long way toward finding affordable auto insurance for teens.
J.D. Power claims satisfaction rating: 854/1,000
AM Best financial strength score: A++
BBB rating: A
Telematics program: IntelliDrive®
Keep reading: Travelers insurance review
Travelers is another provider that offers cost-effective car insurance for teens. With discounts for keeping good grades, taking driver training courses and being away at school, coverage from Travelers can be reasonably affordable.
While your teen driver hopefully won’t have to deal with a car accident, Travelers offers policies that help to keep coverage reasonable if one should occur. The company’s accident forgiveness and new car replacement programs can be valuable coverage add-ons for high-risk teens.
While you may have heard the terms “teenage drivers insurance” or “teen car insurance,” there’s technically no type of car insurance policy exclusive to teenagers. Whether a driver is a 16-year-old or a 96-year-old, they’ll need to meet a state’s minimum requirements for liability insurance. If the car is being financed, a lienholder will likely require collision insurance and comprehensive coverage as well.
Determining the most appropriate level of coverage for teenage drivers requires a knowledge of the standard coverage levels for auto insurance. The sections below contain basic information about each of the main coverage types.If you’re buying coverage for a teen driver or helping a new driver purchase their own policy, it’s helpful to know the different types of insurance. Almost every state requires some form of liability car insurance, which covers damages for others when a driver is at fault. Here are the main parts of liability coverage:
The minimum level of liability coverage varies from state to state. For example, motorists in North Carolina are expected to carry 30/60/25 coverage, which means a policy would pay up to $30,000 per person for bodily injury, $60,000 per accident for bodily injury and $25,000 per accident for property damages.
Collision insurance protects your vehicle in the event of a collision, no matter who’s at fault. Though collision coverage isn’t required by state law, a lender will likely require it if you’re financing a vehicle since it protects the investment.
Collision coverage will reimburse you for damage to your car and give you a payout up to the actual cash value (ACV) of the vehicle if it’s deemed a total loss. However, collision insurance doesn’t cover damage in non-moving situations.
Here are some situations that would involve filing a collision insurance claim:
Comprehensive insurance is another common requirement for drivers financing a vehicle. Unlike collision insurance, it’s geared more toward non-driving scenarios.
Comprehensive coverage will reimburse you for damages in the event of:
Other types of car insurance policies include:
According to our full-coverage rate averages, teenage car insurance averages $5,827 per year or $486 per month. Rates are higher for teenage drivers compared to other age groups for several reasons, which we’ll explore further below.
Here’s how the average cost of car insurance for teenage drivers stacks up against other age groups:
As we mentioned above, age and driving records impact the price of insurance, but insurers weigh other factors as well. Local insurance minimums impact the price, and so do traits like the recorded gender on the driver’s license in most states.Here’s a list of items insurance providers review while estimating car insurance premiums:
*Companies in California, Hawaii and Massachusetts can’t use age to set rates. Secure. Fast. Free.
Drivers should make sure their insurance policies provide adequate financial protection, but increasing coverage limits for teens can be a good idea since they’re more likely to be in crashes.
Buying the state-required minimum of liability coverage isn’t enough to protect you from lawsuits, and sometimes it’s not enough to cover an accident, according to the Insurance Information Institute (III).
If a state only requires $50,000 in bodily injury per accident and a driver causes $70,000 worth of medical bills, they’re on the hook for the remaining balance. Depending on the value of your assets, it may be worth increasing coverage to $100,000 or more. This can help ensure a greater peace of mind when it comes to your teen’s driving habits.
Accident forgiveness keeps your insurance rate the same after the first at-fault accident on your policy. The “forgiveness” varies by state and insurer, and a policyholder usually has to be claim free for a number of years to be eligible or pay to add it to their policy.
Because some insurance companies include accident forgiveness for free and others offer it as an inexpensive add-on, it could save you money overall if your young driver has an at-fault car accident. This type of insurance isn’t available from every provider.
Lastly, if a car is still being financed, you’ll likely need to maintain comprehensive coverage and collision insurance until the loan is paid off — regardless of who is driving.
It’s very common for teen drivers to be insured on their parents’ policies. In most cases, it’s cheaper overall to add teen drivers to your own auto insurance policy than to buy a separate one for them. The main reason is due to common car insurance discounts that can lower rates on car insurance for teens.
Auto insurers typically offer multi-car discounts for covering more than one vehicle under the same policy. This is an across-the-board discount, so you’ll effectively pay less on your own policy in addition to your teen’s coverage. If you’re already taking advantage of a multi-policy bundling discount by combining home insurance or life insurance with your auto coverage, your rates may decrease further.
There are some disadvantages to adding a teen driver to your car insurance policy. For example, adult motorists often gain access to good driver discounts and competitive rates as they maintain a clean driving record. If your teen driver gets into an accident or receives a speeding ticket, you could lose access to those benefits.
Even though teen drivers typically pay more for insurance coverage, there are a few things you can do to get cheap car insurance. You should discuss how much the policy costs with your teen. This is also an opportunity to reinforce good driving habits and compare car insurance quotes to get the best rate.Adding a teen to an existing policy is typically less expensive than a young driver buying their own coverage, according to the III. Having an experienced driver as the policyholder will help them qualify for a better rate and may give you a greater choice of discounts. That said, adding a teen still means a bump in your insurance premium.
One way to offset the price hike that follows a young driver is with discounts. Insurance providers offer several ways to reduce car insurance costs based on customers’ demographics or the types of vehicles they own.Here are some common car insurance discounts:
A car insurance deductible is the amount of money a policyholder pays up front for a claim before insurance coverage takes over. Having a low deductible means paying less money when you file a claim, but it usually comes with a higher insurance premium.
While raising your deductible can decrease your premium, keep in mind that filing a claim will be more likely if you have a teen on your policy.
Young drivers can expect to pay significantly more for car insurance coverage. Because teen drivers lack the necessary experience on the road and are more likely to get in car accidents, insurance providers will always charge higher rates.
While overall costs may be high, there are still several ways you can reduce teenage car insurance costs, such as being aware of discount opportunities, comparing provider quotes and taking part in app-based safe driving programs. Secure. Fast. Free.
Here are the most frequently asked questions about car insurance for teen and young drivers:
In our research, we found that young drivers typically have to pay more for car insurance than other age groups, as they’re statistically more likely to get into severe car accidents. Because of this, car insurance companies charge teens and young drivers some of the highest premiums to offset costs.
Teenage car insurance is more expensive because younger drivers don’t have a driving record. This means they’re more likely to cause or be in an accident, which can raise car insurance rates.
Yes, age is often one of the biggest factors that influences car insurance in most states. Young drivers pay more for car insurance coverage, while older drivers who have experience typically receive lower rates.
If you drive your parents’ car regularly or live with them, you must be a named driver on their car insurance policy for an accident to be covered.
According to our research, the best insurance for teenage drivers is from State Farm and Geico. Both companies offer car insurance discounts for students and good drivers and have strong industry ratings for customer satisfaction.
Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best car insurance companies. We collected data on dozens of auto insurance providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the insurers that scored the most points topping the list.
Here are the factors our ratings take into account:
*Data accurate at time of publication.
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