Earning a driver’s license is an exciting opportunity for young drivers. But a new driver on the road means new driver’s insurance, which can become a headache if you don’t know where to begin.
There are plenty of reasons why driver’s insurance makes sense. Accidents happen every day, most often to young drives between the 16-19 year age group. It’s a frightening thought, but accidents can happen even to the best drivers. You never want to be in a position where you or a loved one is caught in a bind without insurance, so making this a part of your monthly budget is an important step in planning for your future. But just because it’s necessary doesn’t mean it has to cost an arm and a leg.
Knowing exactly what to look for when shopping for auto insurance if you’re under 25 can save you a lot of money. Now is the perfect time to familiarize yourself with the often-complex world of car insurance.
Best Auto Insurance For Drivers Under 25
All of these can play a role in how well your car insurance suits you. Here are a few of the best car insurance options for drivers under the age of 25.
Allstate
Allstate is among the most prominent auto insurance companies on the market today, and for good reason. Available in all 50 states, this company is as reliable as they come. In addition to great savings options for college students and students that complete driver education programs, Allstate also offers an easy-to-use mobile app that makes keeping up with payments and policies a breeze. In fact, downloading the company’s Drivewise app and driving safely can result in additional savings. While customers may expect higher than average premiums through Allstate, the benefits of signing on with a company as reputable can’t be denied.
State Farm
There are a number of reasons why new drivers flock to State Farm. For one, it’s among the most established insurance carriers in the industry. In addition to that, State Farm offers competitive rates and numerous discounts for student drivers.
State Farm is particularly beneficial for drivers under 25 due to the introduction of its Steer Clear program. To qualify, young drivers must have had their driver’s license for a minimum of three years and have caused no accidents. They also must have completed a comprehensive program of driving videos, lessons, and quizzes, as well as 5 hours of driving time. All of this can result in savings of up to 15%.
Metromile
Metromile utilizes a unique pay-per-use model that differs from other insurance companies on this list. With Metromile, customers are charged a low monthly base rate in addition to a per-mile rate, allowing customers to cut back on usage if money is tight. Miles are measured by the Metromile Pulse, a device that attaches to your vehicle to provide accurate readings. Rates can also depend on things like credit score, age, and the type of vehicle you drive. With Metromile, customers can save hundreds of dollars each year.
Geico
Geico is a popular auto insurance option for more than its namesake mascot. In addition to offering significant discounts for students and young adults that earn good grades, Geico also cuts a break for military service and federal employees. Not to mention, you may be part of the over 500 membership and employee groups to which Geico routinely offers discounts. You’ll also save money for your vehicle’s equipment, such as airbags, anti-theft devices, and anti-lock brakes.
Erie
Erie is a lesser-known insurance company but nonetheless a reliable one. A great option for new drivers, Erie has a long history of financial stability and boasts a long list of benefits that include good rates for young drivers. Erie also offers discounts for drivers under 21. While it’s not available nationwide, it is still a solid option, especially with its offering of ERIE Rate Lock®, which ensures rates stay the same unless adding or removing a vehicle or driver or changing your address.
Travelers
Travelers is a worthy insurance option for many customers due to its affinity programs. Members of associations, credit unions, or employees may be in for savings if their organization is a member of the Travelers affinity program. There are also different payment options for Travelers customers, like EFT and payroll deduction payments, which may yield discounts. There are also discounts for responsible driving, meaning if you get into an accident after three years of not being in one, you won’t be subject to an increase in rates.
Progressive
Progressive Insurance is another carrier that prides itself on offering extensive discounts for young drivers. Safe drivers can also earn additional discounts. Customer service is also a priority for Progressive, with the company’s multi-featured website providing in-depth policy information. Other offerings include uninsured motorist coverage and personal injury protection, with other perks like Rideshare Coverage, Roadside Assistance, and Mexico Car Insurance for drivers taking their vehicles across the border. And to reward good driving, there is also a Deductible Savings Bank, which drops deductible amounts the longer you go without being involved in an accident.
Esurance
Esurance is owned by Allstate, but the company has earned a strong reputation on its own. Esurance offers a wide range of policies and an easy-to-use online platform that makes a policy available in minutes, making auto insurance as convenient as possible for customers. With Esurance, customers can save simply by making payments online. There are also discounts for policy bundles. Another powerful benefit offered by Esurance is gap insurance, which provides coverage if your car is in an accident and totaled, and you owe more money than your car is worth at the time of the loss. Many drivers that don’t have gap coverage lose money, so this is important to consider when shopping for car insurance.
Nationwide
Nationwide has an entire teen driving resource center to help young drivers become more acquainted with the road. Here, they can find valuable information about distracted driving, teen decision making, and a variety of other topics. Other benefits young drivers can enjoy include a defensive driving class discount, high grades discounts for students earning a B or better in school, and accident forgiveness. Given that accidents can raise insurance rates by as much as 30%, this is a great perk. Another unique offering is Nationwide’s anti-theft discount, which can yield savings simply by installing an anti-theft device in your young driver’s vehicle.
USAA
USAA is a good option for young drivers who already have a family member who is a customer. Why? Because new drivers automatically receive a 10% discount. But that’s not all. USAA also offers discounts for other things, like good grades for students or completing a training course for drivers under 21. Another perk is their flexible payment plan, which allows customers to customize their payment plans based on income.
Liberty Mutual
Liberty Mutual has a lot of experience in car insurance. This trusted provider offers a wide variety of add-ons to their auto policies, including Personal Injury Protection, Lifetime Repair Guarantee, and Better Car Replacement. Another unique add-on is Liberty Mutual’s Uninsured Motorist Coverage, which pays for car repairs and other expenses in the event that another uninsured driver causes an accident. With Liberty Mutual, you’ll also enjoy discounts for driving an electric or hybrid vehicle, or by avoiding speeding tickets. You can also save by just requesting an online quote. All of these can add up to big savings over the long run, making Liberty Mutual an awesome option for young drivers.
Things to consider when shopping for auto insurance
Unfortunately, shopping for insurance isn’t like shopping for a handbag. With so many different auto insurance providers to choose from, you’ll need to do some research before coming to a final decision.
There are a number of factors that really matter when you’re shopping for car insurance, especially if you’re under 25. Here are a few things to consider when shopping for auto insurance.
State insurance requirements
Every state has different requirements when it comes to car insurance. You’ll want to familiarize yourself with your state’s policies to make sure you choose the best insurance option for you or your young driver.
Driving record requirements
Is a tarnished driving record going to increase your payments? Keep in mind that driving records can cause the price of auto insurance to increase if you’re not careful. If you are dealing with a less-than-stellar driving record, it may be best to search for a plan that won’t be impacted by this.
Pricing
This is a big one. If you’re on a budget, you’ll want to search for an auto insurance policy with a low premium. Car insurance companies offer competitive rates, so it’s important that you look carefully in order to choose one that won’t break the bank.
New Car Replacement
Getting into an accident after purchasing a new vehicle can result in significant losses if you’ve chosen the wrong provider. Some insurance providers offer New Car Replacement, meaning you’ll receive enough money to buy that new car again.
Rental Policy
The days following an accident can be inconvenient for drivers. What will you do if your vehicle is in the shop for an extended period of time? Pay attention to what rental policies are offered if you are involved in a car crash.
Discounts
Discounts are a great thing when it comes to insurance. Some insurance policies offer discounts for things like good grades or a clean driving record. This is important to keep in mind if you’re hoping to save some money down the road.
Accident Forgiveness
Accidents happen, but they don’t have to be the end of the world (or affordable pricing). Accident forgiveness means your rates won’t go up just because of a small accident.
Coverage
From liability insurance to full coverage, you’ll want to evaluate how much driving you do in order to make a smart decision when shopping for insurance.
Customer service
An insurance company ready to go to bat for you is important in the event of an accident. When shopping for auto insurance, consider procedures and what exactly your insurance provider can do for you.
Added Costs of Car Insurance for Drivers Under 25
Once you find a reliable auto insurance provider, keep in mind that pricing can still fluctuate. Just because you sign on with a certain rate doesn’t mean that things can’t change in the future, especially if you’re approaching your driving with caution. There are a variety of factors that can impact the cost of auto insurance for drivers under 25. Some of these include:
Where you live
There’s a reason why insurance providers consider this when setting rates. If you live in an area with higher-than-average car theft, for instance, you may face higher premiums.
Your gender
This one may not seem fair, but there is a method to the madness. Statistically, females are more likely to be involved in a car accident than males are. For this reason, female drivers may face higher rates.
Your age
It’s true that younger drivers tend to be less experienced and thus more likely to be involved in a wreck. If you’re under 25, expect to pay higher rates than your older peers.
Your driving history
Insurers don’t like to see tarnished driving records, especially not in younger drivers who haven’t been on the road very long. If your driving record isn’t in tip-top shape, be aware that you may be subject to more costly rates.
Your mileage
Do you frequently drive long distances? The more you drive, the bigger your chance of being involved in an accident. Keep this in mind when shopping for insurance.
Your car’s value.
Expensive cars tend to carry higher rates because they are more costly to repair in the event of an accident. Luxury vehicles and sports cars are often more expensive to insure.
Your credit history
While not all 50 states can use credit history as a determining factor for policy rates, many states still do. This is why it’s important that you keep a good credit score, no matter your age. By having paid your bills on time, you’ll show providers you are reliable and trust-worthy.
Other drivers
Are there other drivers on your policy? How are their driving records? You may be facing higher rates if you’ve got several other drivers on your policy and at least one of them has caused an accident in the past.
Finding auto insurance can be a challenge no matter your age. The process can be even more intimidating for young drivers purchasing insurance all on their own. But there is a lot of value in knowing how to shop for insurance. Knowing what factors contribute to high rates can help you make smart decisions in the long run, such as when deciding what vehicles to purchase.
No matter which insurance policy you choose, be aware that safe driving is necessary, and has the ability to make a big difference in the overall cost of your policy. By always driving safely and stressing the importance of this to younger drivers, you can ensure auto insurance is a good investment for your future.
