Best Car Insurance for Young Adults | Bankrate (2024)

TJ Porter

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Key takeaways

• Young drivers have less experience behind the wheel. As such, they are more likely to get into accidents and file claims. This is why rates tend to be higher for younger drivers.
• Young adults may want to get quotes from Auto-Owners, Geico, Nationwide, Progressive and State Farm due to low average premiums and robust coverage options.
• Searching for carriers that offer discounts for which you may qualify could help lower young adult rates.

Best insurers for young drivers

Bankrate’s research revealed that Auto-Owners, Geico, Nationwide, Progressive and State Farm are among the best car insurance companies for young drivers. We started our analysis by reviewing average premium data from Quadrant Information Services. Knowing that car insurance rates are increasing in 2023, we focused on finding companies with low average rates for young drivers. We also took coverage options, young driver-specific discounts, policy features and third-party ratings into consideration to help you find a carrier that offers affordable rates and adequate coverage.

To determine the average cost of car insurance for young drivers in the U.S., Bankrate analyzed data for drivers added to their parents’ policy, as well as drivers on their own policy. Remember, your rate may vary based on those factors and several others.

How much is car insurance for young adults?

A driver’s age is one of the biggest factors to affect rates, except in Hawaii or Massachusetts, where age is not allowed to be used as a factor for calculating insurance premiums. While teens tend to pay the highest rates, drivers between the ages of 20 and 25 are still paying hefty average premiums. At age 20, for example, drivers pay 56 percent more for full coverage than the national average premium of $2,014 per year. By age 25, though, average insurance rates fall significantly and tend to change less drastically from year to year.

Rates for ages 20-22 are for the insured on a parent’s policy and reflect the total cost of three drivers and one vehicle. Rates for ages 23-25 reflect the young drivers on their own policy, insuring one vehicle.

Average car insurance costs for young drivers by state

Location is another critical factor in determining auto insurance premiums. Every state has different insurance laws, including different minimum coverage requirements, which can impact the rates set by every auto insurance company. Additionally, the risk of getting into an accident may vary by location, including your state, city or even ZIP code.

The table below illustrates the average annual full coverage premium for young adults, analyzed by state.

*Hawaii and Massachusetts prohibit using age as a rating factor, but other factors may apply that cause rates to fluctuate. **Rates for ages 20-22 are for the insured on a parent’s policy and reflect the total cost of three drivers and one vehicle. Rates for ages 23-25 reflect the young drivers on their own policy, insuring one vehicle.

How are rates determined for young drivers?

Auto insurance rates for young adults are calculated in the same way as they are for older drivers. Several rating factors determine car insurance premiums, including:

• Age: Drivers under 25 have less experience and don’t typically have the same level of financial stability as older drivers, which may make them more likely to get into accidents and file claims. That leads to higher insurance costs in most states, though Hawaii and Massachusetts state regulations do not permit insurance companies to use age as a rating factor.
• Vehicle make and model: The type of car you drive, particularly how much the car is worth and how much it will cost to repair, influences premiums. Older cars with lower values and those that are cheaper to fix after an accident are usually cheaper to insure than others.
• Credit: Most states allow insurance carriers to use your credit-based insurance score when calculating your policy rate. People with poor credit typically pay much higher rates than consumers with good credit. Note that California, Hawaii and Massachusetts ban the use of credit as a factor in determining insurance rates, while car insurance companies in Michigan cannot use your actual credit rating but can use factors that go into your credit rating.
• Gender: Males usually pay higher rates than females pay for car insurance, even if they have clean driving records. Men are statistically more likely to get into accidents than women, and those accidents tend to be more severe. California, Hawaii, Massachusetts, Michigan, North Carolina and Pennsylvania ban the use of gender as a rating factor, though.
• Location: If you live in an area with a high likelihood of accidents or damage caused by natural disasters, theft or vandalism, you may pay more for coverage. Additionally, every state has different insurance laws, which can affect premiums.
• Mileage: The more you drive, the more likely you will have an accident due to being on the road more often. People who only use their cars occasionally may pay lower rates than people who are on the road more often.
• Types and amount of coverage: The types and level of coverage you buy also impact the premiums you pay. Lower levels of coverage and buying only liability protection will usually be cheaper than buying collision and comprehensive insurance. Keep in mind that lenders will typically require you to buy collision and comprehensive (aka full coverage), though, and most insurance experts recommend purchasing more than the minimum amount required to better protect your finances.
• Deductible: Your deductible for certain coverage types will affect how much you pay, too. Higher deductibles mean lower premiums, but you will pay more out of pocket after an accident, so you need to be prepared for that risk.

Because insurers weigh these variables differently when calculating premiums, your quote may vary from company to company. That said, it can be helpful to get several quotes before settling on an auto insurer.

Car insurance discounts for young drivers

Almost every auto insurance company offers discounts to drivers, with some discounts aimed specifically at younger drivers. Finding a company that offers the most discounts that apply to your circ*mstances may be the best way to get cheap car insurance.

• Multi-car discounts: Most auto insurers offer a slight discount when you add multiple cars to a single policy. It does not fully offset the cost of insurance for each vehicle, but overall, the vehicles are cheaper to insure together.
• Multi-policy discount: For drivers who rent an apartment and own a car, bundling auto and renters insurance can be one way to make insurance more affordable.
• Alumni association discounts: Many car insurance companies offer alumni association discounts for recent college graduates. You may need to ask an agent for details.
• Good student discount: Discounts for students are among the most common discounts for young drivers. You can usually earn the discount if you’re a full-time high school or college student and maintain a minimum GPA.
• Young driver safety training: Many companies offer discounts to students who have taken a driver education class or an approved driver training course. These courses teach defensive driving and can help reduce the likelihood and severity of accidents.
• Usage-based rating discounts: If you don’t drive much, you might be able to get a discount based on how often you drive. These are relatively new programs and rely on a mobile app or plug-in device to track your mileage and driving habits, such as acceleration, braking and speed. Good driving habits can land you a bigger discount.
• Distant student discount: For students who attend school far away, you may be able to land a discount if you leave your car at home. You typically must be listed on your parents’ policy to take advantage of this discount.

Methodology

Bankrate utilizes Quadrant Information Services to analyze 2023 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Rates are weighted based on the population density in each geographic region. Quoted rates are based on 20-year-old through 25-year-old male and female drivers with a clean driving record, good credit and the following full coverage limits:

• $100,000 bodily injury liability per person
• $300,000 bodily injury liability per accident
• $50,000 property damage liability per accident
• $100,000 uninsured motorist bodily injury per person
• $300,000 uninsured motorist bodily injury per accident
• $500 collision deductible
• $500 comprehensive deductible

To determine minimum coverage limits, Bankrate used minimum coverage that meets each state’s requirements. Our base profile drivers own a 2021 Toyota Camry, commute five days a week and drive 12,000 miles annually. The drivers are renters on their own insurance plans except for distant student discount rates, in which case the drivers are on their parents’ plan.

These are sample rates and should only be used for comparative purposes.

Age: Rates were calculated by evaluating our base profile with the ages 20-40 applied. Depending on age, drivers may be a renter or homeowner. Rates for ages 20-22 are for the insured on a parent’s policy and reflect the total cost of three drivers and one vehicle. Rates for ages 23-25 reflect the young drivers on their own policy, insuring one vehicle.

Due to state regulations, age is not a contributing rating factor in Hawaii and Massachusetts.