There’s no denying the importance of good car insurance coverage. With millions of car accidents happening in the U.S. every single year, you want to be sure that you, your automobile, and anyone riding in your car are protected while on the road.
Unfortunately, auto insurance isn’t as straightforward as it could be. Finding the right balance of cost and coverage can be tricky, especially if you’re a new or young driver. Because less experienced drivers are more likely to be involved in accidents, car insurance premiums tend to be more expensive than they would be for those who have been driving longer.
Here are the best car insurance companies for new drivers.
- Progressive: Best for drivers new to the country
- Nationwide: Best for pay-per-mile insurance
- State Farm: Best for older adults new to driving
- Geico: Best for new drivers in their 20s
- Allstate: Best for new drivers under 21
- USAA: Best for military members
How much is car insurance for new drivers in their 20s?
New drivers in their early 20s or younger usually have to pay higher car insurance rates than other drivers because they are more likely to present risky driving behavior and get into accidents due to their lack of driving experience.
The average rate for car insurance for drivers aged 20 is about $203 per month, according to Progressive. That cost drops by about 9% when a driver turns 25, as long as they haven’t had many claims over the past five years they’ve been insured.
How much is auto insurance for adults new to driving?
Age isn’t the only factor insurance companies consider when determining how much a new driver should pay for car insurance coverage. New drivers, no matter their age, are seen as a larger risk for filing a claim because they don’t have a lot of experience behind the wheel.
Insurers also consider a driver’s safe driving history when setting premiums. If you are an adult in your 30s or older who is just getting your driver’s license, you don’t have a past driving record the car insurance company can look at when setting your rates. Exactly how much that insurance will vary by insurance company, however.
How much is car insurance for drivers new to the country?
No matter how old you are, if you’re new to driving in the U.S., you might end up paying more for your insurance coverage. That’s because insurance companies generally set their rates based on a driver’s safe-driving history. If you’re a foreign national or newly immigrated resident, this information might not be as readily available, making U.S.-based insurance companies that much more likely to lump you in with all the new drivers.
Even if your chosen insurance company can get their hands on your former driving history, there are cases in which driving records in other countries don’t count toward your record of safe driving in the U.S. Unfortunately, all this might lead to you paying more for coverage in your first years of having a U.S. driver’s license as you work toward proving your good driving habits.
Best insurance for new drivers
When looking for the best auto insurance companies for new drivers, many factors, such as the driver's age, credit score, and where they live, come into play. For our analysis, we looked at the insurance company’s discount programs that enabled new drivers to save money on their insurance premiums.
Progressive: Best for drivers new to the country
Whether you’re a foreign national visiting the U.S. for a couple of months or moving here permanently, you’ll need to have car insurance if you drive on the roads. Not all U.S. car insurance companies offer car insurance for foreigners, but Progressive does.
Drivers new to the U.S. must have a valid foreign driver's license or international driving permit to get car insurance with Progressive.
Find out more in our Progressive auto insurance review.
Nationwide: Best for pay-per-mile insurance
Not all car insurance companies offer pay-per-mile insurance. Nationwide is the best insurer for pay-per-mile insurance because it provides policyholders up to a 10% safe driving discount for using its program after your first renewal.
Nationwide’s SmartMile program charges policyholders a base monthly rate and a per-mile rate. It’s perfect for drivers who don’t get behind the wheel often, like remote workers, retirees, or people who live in metropolitan areas where most things are within walking distance.
Visit Nationwide for more information.
State Farm: Best for older adults new to driving
State Farm is a well-known car insurance provider, and its long-standing history and top ratings make it a perfect choice for older adults new to driving. Unlike many newer car insurance companies that do much of their business online, State Farm has a network of more than 19,000 insurance agents across the country that can provide face-to-face service for their policyholders.
New drivers can earn discounts of up to 30% as they work on their safe driving habits with State Farm’s Drive Safe & Save monitoring program. Although State Farm may not offer the cheapest rates for car insurance, its rates are competitive. The company has been ranked as one of the top car insurance companies for overall customer service by J.D. Power.
Check out our State Farm auto insurance review for more information.
Geico: Best for new drivers in their 20s
Geico offers numerous discounts to help drivers save money on their car insurance. Drivers in their 20s who are enrolled in college or trade school may qualify for an up to 15% discount just for being a good student who maintains a B average or better. Geico also offers discounts for memberships to college fraternities and sororities, honor societies, and some student and alumni organizations.
Find out more in our Geico auto insurance review.
Allstate: Best for new drivers under 21
Teenagers and drivers under age 21 are often subject to the highest rates for car insurance. Allstate’s special teenSMART program, developed in partnership with Adept Driver, can help reduce the cost of insurance premiums for teenage drivers.
teenSMART is a computer-based driver education program that guides teen drivers through realistic driving simulations. Teens and drivers under 25 who successfully complete the program can qualify for a discount on Allstate car insurance premiums.
Allstate also offers discounts for good students, students who attend school at least 100 miles away from where their car is stored, and young drivers who enroll in its Drivewise mobile app monitoring program.
Learn more in our Allstate auto insurance review.
USAA: Best for military members
When it comes to auto insurance for members of the military, there is no better insurance than USAA. In fact, USAA’s auto insurance is only available to current and former military personnel and their immediate family members. So if you are a new driver under age 25 in the military or whose parent served in the military, USAA could be the best car insurance for you.
USAA also offers discounts for good students. New drivers can also earn discounts by proving they have safe driving habits using USAA’s SafePilot driving program.
Find out more in our USAA auto insurance review.
What kind of car insurance do new drivers need?
Every state has slightly different requirements when it comes to the minimum insurance a driver needs. At its most basic, these minimum insurance requirements will protect both you and your vehicle, as well as anyone else involved in a car accident. This includes at-fault accidents as well as ones that aren’t.
Most new drivers should shop for an auto policy that includes a few different types of car insurance. These coverage options should include bodily injury liability insurance, property damage liability coverage, and uninsured or underinsured motorist insurance.
Although bodily injury and property damage protect the other driver in the event of an accident, underinsured motorist insurance will protect you in the event the other driver doesn’t have adequate insurance. Although only half of U.S. states require UIM, it’s good protection to have — especially because there’s never any guarantee the other driver will have insurance or have adequate insurance to cover damages to your vehicle.
Depending on where you live, you might also be required to have personal injury protection, which covers any bodily injuries to you and your passengers in the event of an accident. Even if this isn’t required by your state, it’s a good one to consider adding to your policy, especially if you don’t have an emergency fund set up to pay for unexpected medical bills.
TipIf you finance your vehicle, you might be required to get collision and comprehensive coverage.
You can start shopping for car insurance quotes by determining exactly what minimum coverage your state requires and then go from there to decide whether you need add-ons. Although PIP is a valuable add-on to consider (if not already required by your state), other extras such as roadside assistance or rental car coverage may or may not be beneficial to you.
Another important thing to keep in mind when shopping for car insurance is the deductible. A car insurance deductible is the amount you’ll pay upfront anytime something happens to your vehicle. Most insurance policies allow you to select the deductible amount for each type of coverage, so spend some time thinking about how much money you want to put out at any given time and what deductibles make the most sense for your budget and car usage.
A high deductible typically results in a lower annual premium.
How to get cheap car insurance for new drivers
Now that you know a bit about what to expect when shopping for insurance policies, it’s time to talk about how to save on car insurance, even as a new driver. Here are a few tips to help you find the most affordable auto insurance policy you can.
Stay on your parents’ policy
Because multi-car insurance plans are usually more affordable than single plans, there are some pretty great discounts to be had if you can stay on your family’s group insurance policy in your first few years of driving instead of getting your own policy. Another bit of good news? Unlike health insurance plans, there’s also no age limit to staying on your parents’ plan.
Keep a clean driving record
Another thing that will save you money on car insurance is working toward a clean driving record. The longer you go without filing any claims or having any accidents, the more likely you are to qualify for a safe driver discount.
Take advantage of discounts
Some insurance plans also offer other kinds of discounts to young drivers. An example of this is the good student discount. Just what it sounds like, this discount is sometimes available for students who get good grades, the logic being that if you’re responsible in school, you’ll also be a responsible and good driver.
Ask your insurance provider whether it offers any car insurance discounts like this one for young drivers whether it has discounts for having an anti-theft device, for certain safety features installed in your car, or for taking a defensive driving course. You may also be eligible for discounts if you're an active or retired member of the armed forces, including the National Guard and Reserves.
The more insurance coverage you buy from the same company, the cheaper each individual plan typically is. One example of building policies is if you purchased renters insurance or homeowners insurance as well as car insurance from the same company. If you’re in the market for other types of insurance coverage that you need, try to see if you can get them all from the same provider and take full advantage of the insurance discounts.
If you can afford to pay for your annual insurance outright in one payment, that will save you quite a bit of money. Lump-sum payments on insurance policies tend to be quite a bit cheaper than monthly payments, so consider putting money aside in one of the best savings accounts before you pull the trigger on a plan.
Make a smart vehicle purchase
Shopping for a new car? The type of vehicle you end up driving may also impact your insurance coverage. Newer, reasonable vehicles tend to be seen as less of a liability than older or flashier cars. If you inherited your grandma’s old jalopy, you might even consider skipping collision coverage or comprehensive insurance coverage, as you’ll likely end up paying more for that coverage than what the car is actually worth.
Driver monitoring apps
Several car insurance providers offer programs where you can earn discounts on your premiums by allowing the insurance company to monitor your driving habits through a mobile phone app or a device installed in your vehicle. These programs could be a great cost-saving tool for new drivers who haven’t yet built a safe driving history.
New drivers who don’t drive often may want to consider getting pay-per-mile car insurance for lower auto insurance rates. With this type of insurance, your premiums are based on how many miles you drive. With this type of coverage, your rate usually consists of a low base rate and then a variable rate, which is the cost you are charged per mile you drive.
For example, with Nationwide’s SmartMiles pay-per-mile plan, you would pay a base rate of $60 plus a 7 cents per mile variable rate. So if you drove 500 miles in a month, your monthly premium would be $95 ($60 + $35). Your rate can fluctuate month to month depending on the number of miles you drive. So, if you drive 1,000 miles the next month, your monthly premium would be $130.
One of the best ways to save money on car insurance? Shop around to get the best rate. You can talk to an insurance agent and let them do the shopping for you, or you can do your own shopping easily online.
As with all comparison shopping, it’s important to do your research when selecting the best car insurance plan. Get a few auto insurance quotes and shop the market before you make any final decisions.
What is the best insurance for a new driver?
It’s hard to pinpoint just one company with the best insurance for new drivers. What might be the best option for one driver may not be the best for another. Several factors determine what the best insurance is for you including your customer service preferences, the company’s rates, and its reputation.
What insurance is the cheapest for new drivers?
It’s hard to say what insurance is the cheapest for new drivers because several factors play into the cost of car insurance premiums. Car insurance costs can vary from state to state. A new driver’s age is also a factor. Allstate may offer the cheapest rates for new drivers under 21, for example, but if the new driver is 23 or 24, they may be able to find more affordable rates with a different insurer.
Which is the best company for new drivers who are looking for a low deductible?
New drivers who are looking for a low deductible should shop around with different insurance companies to see where they can get the best bang for their buck. You’ll most likely have to pay higher premiums for a lower deductible on your car insurance, but if you get several quotes, you can find the insurance company that has the best deal for you.
There are a ton of smart ways to save money on car insurance and avoid higher rates, but the most important thing is to select a plan with good coverage that matches your needs and priorities. Whatever savings you might earn on your annual plan will be pennies compared to the expenses that can come up in a major accident.
Shopping for lower rates can be gratifying. But making sure you have the car insurance policy you need is one of the best financial decisions you can make, period.
In determining our ranking of the best auto insurance companies for new drivers, we looked at popular companies and ranked them according to a series of weighted factors that we consider critical to the consumer. We did not evaluate all companies in the category.
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