Do you need auto insurance as a new driver? If YES, here are 16 best car insurance companies for under 25 drivers, the policies they offer and their cost.
When it comes to insurance, age plays a major role in determining the overall cost of the policy. Generally, insurance companies consider younger drivers as more of a risk, so they are made to pay higher rates based on their age.
Why Car Insurance Premiums are Higher and Expensive for Under 25 Drivers?
Insurance companies know that younger drivers are less-experienced, and therefore are more likely to be involved in accidents. Drivers that are under 25 years are the highest risk group, since studies have shown that they tend to get involved in more accidents and so make more claims. But the older a driver gets and the more experience they gain behind the wheel, the lower the rates tend to get.
3 Sure Ways to Save Money on Car Insurance for New Drivers Under 25
It is a fact that there are different price quotes for new under 25 drivers, but the good news is that there are several ways young drivers can save money on car insurance. The first is by qualifying for discounts, as most major insurers offer discounts targeted toward young drivers.
These include discounts for being good students and for taking a driver’s education course. Additionally, if a teen is on their parent’s policy, most large insurance companies will reduce car insurance premiums if the teen is away at school and has limited access to the vehicle.
Another important method to reduce the cost of your insurance policy as a new under 25 driver is by omitting coverages that may be unnecessary and expensive for your age bracket —such as collision insurance. Collision insurance is costly for teen drivers.
This is because these demographics are statistically more likely to get into an accident and file an insurance claim than more experienced drivers. If your car is worth less than a few thousand dollars, getting collision coverage will not be worth the increase in premiums, and it is recommended to opt for basic coverage instead.
Irrespective of which car insurance company a young driver chooses, there are other things they can do to lower their premiums or get discounts on them. You can graduate from a driver’s education class or install anti-theft devices in your vehicle.
If you are a student in high school or college, you can sometimes get a discount if you can maintain above a B average in your classes. This shows insurance companies that you are a responsible person and will likely be responsible when you drive.
Please note that the cheapest insurance in your state for under 25 drivers may not actually reflect the cheapest overall insurers listed below, as car insurance rates for different age brackets vary widely from state to state. Here are some of the best car insurance policies for new under 25 drivers, the insurance companies that offer them and the cost they go for;
16 Best Car Insurance Companies for New Drivers Under 25, the Policies They Offer and Their Cost
- Liberty Mutual
Enjoy premium perks like better car replacement and accident forgiveness plus local agent support. Liberty Mutual has some of the best agents and customer service in the industry and was voted 2nd for customer satisfaction in a 2012 study by J.D. Powers.
Although agents typically partner with community organizations and employers to sell policies, anybody can get a quote and a policy from Liberty Mutual. Two features in particular make them a company to put at the top of your list for consideration:
- Accident forgiveness, which means your rates won’t go up after one claim.
- New car replacement: If you purchase a brand new car and are in a crash within the first year, most insurance policies will only pay out the depreciated value of the car which can be thousands less than you just paid for the car. New car replacement with Liberty Mutual ensures that you’ll get enough money to buy the same new car again.
If you are interested, you can get a Liberty Mutual car insurance quote for new under 25 drivers by supplying some basic info and they will give you their quote.
Metromile is an auto insurance startup that has her head office at San Francisco. Founded in 2011, Metromile is changing the way we shop for car insurance through its innovative approach and convenient online platform. This type of insurance is designed to benefit urban drivers who typically don’t drive as much as their suburban counterparts, with what it calls pay per mile insurance.
Their policies come with a 24/7 customer service and a claims team accessible through a full-service app. This startup is focused on rolling out pay-per-mile insurance in states with dense urban populations. If you are shopping for a provider that offers multiple types of insurance, you may want to look elsewhere.
Metromile is best suited for drivers who primarily use other means of transport, reserving their car use to a few hundred miles a month. With Metromile, you are quoted a base rate in addition to a rate per mile that’s typically a few pennies.
Monthly bills are adjusted to reflect your base price and the cost of your total miles driven in the previous month. Whether you are looking for a convenient way to get coverage or don’t believe in paying more than you need to, Metromile’s unique approach makes it stand out from the rest.
Metromile is a fairly new provider, so it isn’t available everywhere yet. Now available in California, Illinois, New Jersey, Oregon, and Washington, Metromile estimates occasional drivers could save between $400 and $500 with pay-per-mile insurance.
If you are interested, you can get a Metromile car insurance by supplying some basic info and they will give you their quote.
This insurance company is long known for offering low quotes online. It is now backed by one of the most-known players in the insurance business, Allstate insurance. It’s easy to get a quote online, or reach the 24/7 toll-free customer service line. Esurance also makes it easy to manage your auto insurance policy and your claims online.
Discounts available through Esurance include its Fast 5, where you can save just for getting an online quote, as well as a multi-policy discount, multi-vehicle policy discount, and the Switch & Save, which gives you a premium reduction for moving from another insurance company.
Esurance also offers discounts for being an alumni of a Pac-12 school, purchasing emergency road assistance from a third party, good driving, good grades, anti-theft devices, and more. Esurance’s focus on online servicing reduces rates and makes it an especially good car insurance pick for young adults.
If you are interested, you can get a Esurance car insurance by supplying some basic info and they will give you their quote.
USAA is one of the insurance companies that has good package for under 25 drivers. They have long been known for their outstanding customer service and its association with the US military. Apparently, service members and Veterans are eligible to become USAA members, but so are spouses, children and grandchildren of anybody who honorably served in the U.S. armed forces.
Once you are a member, you can access USAA’s auto insurance policies, which offer a number of discounts that can bring your premiums down, including:
- Safe driver discount, which results in savings after maintaining a good driving record for five years. As an under 25 driver, when you take an approved defensive driving course, you will receive a discount.
- So also, good students can get a discount when they maintain a high GPA. You can also receive discounts for customer loyalty, purchasing multiple USAA products, and by encouraging family members to sign up.
- Vehicle discounts include those for multiple vehicles, new vehicles, and for driving your vehicles fewer miles.
- USAA also offers a special discount for those who garage their cars on military and choose comprehensive insurance coverage. It’s easy to purchase their coverage; you can get a quote online or call a toll-free number to reach a representative.
Cheapest Annual Rate / USAA car insurance quote is $347
Just like most insurance companies in the united states of America, there are different prices for their policies including for under 25 drivers. As a matter of fact, the Allstate website includes a number of features that make it easy to get a quote on your car insurance, as well as manage your policy. There are also a number of resources available on the site. Allstate offers a wide range of roadside services that can be of help when you travel.
The truth is that Allstate offers the discounts that are considered fairly standard: good student, safe driver, multi-policy, and multi-vehicle. Allstate also offers discounts when you set up an automatic withdrawal to pay your premiums, as well as savings for paying your policy in full.
There are also a number of discounts for the type of vehicle you own, from a new car to an economy car to a farm vehicle. As an under 25 driver, depending on your specialized needs, an Allstate policy can be a good choice for your auto insurance.
- Cheapest annual rate / An Allstate car insurance quote is $653
Even though GEICO is the second biggest insurance company in the United States, it is also the second cheapest company too. The average annual cost of insurance with them is $1,067. GEICO is available in nearly every state, some of which have special discounts for younger drivers who successfully pass a driver training class and get good grades in school.
The company created an the online insurance quote model, and markets its ability to save you 15 percent or more on your car insurance. However, not only can you get a quote online, but in recent years GEICO has added “real world” agents that you can visit offline, and you can also call or email. GEICO also touts its ability to provide customer service via Twitter.
GEICO includes discounts for the vehicle equipment you have (air bags, anti-lock brakes, anti-theft, and daytime running lights) as well as for your driving history and habits. You receive a discount for five years being accident-free, as well as for taking driver’s education and defensive driving courses.
Teen drivers, college students and young adults can receive a discount for good grades as well, and GEICO offers discounts for military service and for federal employees, on top of the standard coverage discounts for multiple policies and vehicles. You can also check Geico’s list of more than 500 membership and employee groups that can result in discounts.
- Cheapest annual rate / A GEICO car insurance quote is $5,208
- State Farm
State Farm is one of the leading brands in the insurance industry in the United States. As an under 25 driver, it’s fairly easy to get a quote from the website, or by calling an agent. State Farm’s discounts include those for good students, multiple automobiles, other products, and good driving habits (go at least three years without moving violations and no at-fault accidents).
You can also take the Steer Clear course offered by State Farm to receive an even bigger discount. Defensive driving and less driving can also reduce your auto insurance premiums with State Farm. State Farm’s web site also has a handy tool you can use to determine how your rate might rise or fall, depending on different circumstances, whether it’s adding a teen driver or getting a speeding ticket.
- Cheapest annual rate/A State Farm car insurance quote is $4,661
Progressive is one of the top car insurance companies in the United States. The average annual cost for car insurance with Progressive is about $1,241. Those who stay loyal to the company will earn discounts, as long as they don’t get into any accidents.
Progressive promises steep discounts and quality coverage for under 25 drivers and others. Progressive touts its standing as the number one auto insurance site, and promises to help you find the best rates — even if the best rate is with a company other than Progressive. It’s not a bad place to start your search, since you can see multiple quotes from multiple companies. You can also get help from a local agent or via phone.
One of the features Progressive offers is the Name Your Price tool, which attempts to fit an insurance policy to your financial situation. You can also enter your current auto insurance package and see what it would cost at other companies.
As an under 25 driver, discount from Progressive include those for safe driving, multi-vehicle and multi-policy, paying in full, online policy purchase, good grades (teen drivers), and more.
- Cheapest annual rate / A Progressive car insurance quote is $658
- American National
American National is another ideal insurance policy cover that a new driver that is under 25 should consider buying if they are shopping for an insurance cover. American National allows you to get a quote online, in person, or over the phone and the standard discounts are offered, from multi-car to good student to multi-policy.
You can also get a discount for maintaining a good credit score and signing up for automatic withdrawal. You can also receive a 25 percent premium refund for being claim-free for three years.
If you are interested, you can get an American National car insurance by supplying some basic info and they will give you their quote.
- Erie Insurance
Erie Insurance is a company based in Erie, Pennsylvania. They are one of the cheapest car insurance companies in the nation and they have a friendly car insurance policy cover for new under 25 drivers. The average annual car insurance rate that drivers pay is $1,052.
The only downside is that Erie is only available in 9 states. If you are fortunate enough to be in one of these states, you can find insurance rates that are 20 to 40 percent cheaper than what bigger companies would offer you.
As a new under 25 driver that lives in Illinois, Indiana, Maryland, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, or Wisconsin, you should definitely call an Erie agent. It is easily one of the most affordable companies for teen and college-aged drivers.
Interestingly, Erie offer discounts of up to 20 percent for drivers who live at home and are under 21, for each year they spend under the same policy, for taking a driving class, and even for participating in their competitive program that offers prizes to students who are the most engaged with safe driving.
The truth is that Erie Insurance is well-known for its competitive price and excellent claims service. They are rated A+ by A.M. Best, which is considered an Excellent rating. A.M. Best ratings are in relation to the financial stability of the carrier and the likelihood of your claim getting paid.
- Cheapest annual rate / An Erie car insurance quote is $2,411
- American Family Insurance
American Family Insurance is of course one of the leading insurance companies in the United States of America that has suitable car insurance policies for new drivers that are under 25 years. As a matter of fact, there are about one thousand cities throughout the United States which have American Family auto insurance availability.
Young drivers have found rates with American Family to be about 10 to 30 percent cheaper than the average for their state. The average annual cost with American Family is $1,099.
It might interest you to note that American Family Insurance has a free Teen Safe Driver program that can provide up to 10 percent discount off of premiums after the driver completes either 3,000 driving hours or one year using the app, which tracks driving behavior and provides feedback. If you share a vehicle with your teen driver, don’t worry – you can remove trips from the log if someone else was the driver.
As a new driver that is under 25, if you want to enjoy some benefits, you should consider driving a slightly older vehicle. Premiums are often lower for older vehicles – and certainly are lower than they are on the latest model of sports car.
But given that the crash rate for teen drivers is almost twice that of other adult drivers, don’t skimp on safety: really old cars can sometimes lack the safety features that are essential to protect new drivers on the road in the event of an accident. At the minimum, make sure the vehicle has working airbags and a recent safety inspection from a reputable mechanic.
- Cheapest annual rate/An American Family Insurance car insurance quote is $3,820
- Nationwide Insurance
Nationwide Insurance is also one of the insurance companies in the United States that offer a good student discount that also cover new under 25 drivers. It also offers accident forgiveness even for teen drivers, ensuring rates won’t increase even more after the first at-fault accident. They also offer 24/7 roadside assistance.
If you are willing to have your driving monitored at all times, their SmartRide program can qualify you for some steep discounts after a year of use. You can also combine discounts on a family plan, so if your parents qualify for a discount for being accident-free, you will, too.
As a new driver under 25, it is advisable to take driver’s ed, even if it’s not mandatory – and even if it doesn’t lower your premiums. It will still reduce your chances of causing a costly and premium-raising accident, so it will very likely save you money and pain in the long run.
- Cheapest annual rate / A Nationwide Insurance car insurance quote is $4,059
- Travelers Insurance
Boasting an average savings of $547 for policyholders, Travelers has many discounts for new drivers that are under 25 and also for drivers of all ages, including price breaks for good student and student studying away from home. Allstate also offers lower insurance rates for drivers who use hybrid/electric vehicles and those who complete driving training courses.
Travelers insurance has protected Americans and their assets for more than 160 years and has 13,500 local agents ready to help. If you are interested, you can get a Travelers car insurance by supplying some basic info and they will give you their quote.
MetLife is one of the leading insurance companies in the United States of America that offer good – student discounts to drivers under age 25 who have maintained a B average for the high school or college semester preceding the purchase of their new policy.
The company bundles home and automobile policies for rate reduction and offers discounts for anti – theft devices installed on your car, low driving mileage, multi-car policies, and safe drivers. If you are interested, you can get a MetLife car insurance by supplying some basic info and they will give you their quote.
Amica is one of the leading insurance companies in the United States of America, although Amica is not well known for having the cheapest auto insurance for young adults especially new drivers that fall under 25 years. However, they do have a number of discounts which can provide young drivers with a serious reduction in their auto insurance premiums.
Just like most insurance companies in the united states of America, Amica does offer a discount if you have a claim – free experience. The discount will apply if you have had no claims within the past three years, other than glass or towing claims.
Amica also provides a Good Driving Discount. You are eligible for this discount if you go at least three years without an at-fault accident or a moving violation. The Good Student Discount can reduce your premium by as much as 25%. What’s more, it will continue even after you graduate from college, up to age 25.
They also offer a Student Away at School Discount. If you go to school away from home and only drive when you are at home, you can qualify for this discount as well. You must be under 25 and a full-time student to qualify for this discount.
Perhaps the most interesting discounts provided by Amica are their Loyalty and Legacy 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 will increase the longer you are with Amica.
Under the Legacy Discount, you can get a discount if you are under age 30, and your parents have had an Amica auto insurance policy for at least the past five years. If you are interested, you can get an Amica car insurance by supplying some basic info and they will give you their quote.
- Auto Owners
Auto Owners is yet another insurance company in the United States that has suitable car insurance policy covers for new drivers that are under 25 years. Despite being available in 26 states, not too many people know about Auto Owners car insurance.
The average annual cost for car insurance with Auto Owners is roughly $1,201. Those who are students can earn a discount with them. If you are interested, you can get an Auto Owners car insurance by supplying some basic info and they will give you their quote.
In conclusion, as a new driver that is under 25, prior to choosing an auto insurance company, it is advisable that you consider your options and your needs. Ensure that you choose an insurance company that is likely to help you best protect your assets at a price you can afford.
You may have to invest some time to find reasonable auto insurance if you are a driver that is under 25, but the research above can ease your research. Conducting your homework, getting at least 3 to 5 quotes from some of the leading car insurance companies, and asking about the latest discounts can save you money and get you the best and most ideal car insurance policy cover.