topsverseGetting auto insurance when you are young feels like an uphill battle. If you are under 25, you have probably already discovered that insurance companies charge you significantly more than they charge older drivers. This is not just because they want to make your life difficult – there is actually a reason behind it.
The Centers for Disease Control and Prevention has found that teenagers and young adults between 16 and 19 have the highest rates of car accidents compared to any other age group. Insurance companies look at these statistics and see dollar signs – not in a good way. They know that younger drivers are more likely to file claims, which means they need to charge higher premiums to cover those potential costs.
The good news is that expensive does not mean impossible. You can find affordable coverage if you know where to look and understand what affects your rates. We have analyzed ten of the best insurance companies for young drivers, looking at things like cost, coverage options, discounts specifically for younger drivers, and how happy their customers actually are.
This guide will help you navigate through all the options and find a policy that protects you without draining your bank account.
Top 10 Auto Insurance Companies For Young Drivers
1. USAA
USAA consistently offers some of the lowest rates for young drivers, with full coverage averaging just $3,220 per year for a 20-year-old. Their customer satisfaction ratings are through the roof, and there is a good reason for that.
The catch? You can only get USAA if you or your parents are in the military, are veterans, or are family members of military personnel. If you qualify, USAA is often your best bet. They offer excellent customer service, competitive rates, and you can handle all your financial needs in one place – insurance, banking, and investing.
Their good student discount and military-specific perks, like discounts for storing your car on a military base, make them even more attractive. The loyalty among USAA customers is remarkable because they truly take care of their members.
2. Erie Insurance
If you need to buy your own policy instead of being added to your parents’, Erie Insurance is worth serious consideration. They offer some of the lowest rates for young drivers who are purchasing standalone policies, whether you are 17, 21, or 25.
Erie has earned the highest ranking in the J.D. Power Insurance Shopping Study for providing an excellent purchase experience. In an industry where customer satisfaction often takes a backseat, Erie focuses on making the process smooth and straightforward.
Their Rate Lock feature is particularly appealing because it keeps your premium the same year after year unless you make major changes to your policy. In a market where rates seem to go up constantly, this provides valuable peace of mind.
3. State Farm
State Farm has been around forever, and they have figured out how to work with families who are adding young drivers to their policies. At $4,708 annually for full coverage for a 20-year-old, they offer competitive rates, especially when you add a teen to an existing family policy.
Their Steer Clear program is particularly smart. It is a driver training course for young drivers under 25 who have clean records. You watch videos, take quizzes, and log practice driving hours to earn a discount. It is educational and saves you money.
The Drive Safe & Save telematics program tracks your driving habits and can save you up to 30 percent. The best part? It will never increase your rates, even if it detects risky driving. You can only save money or stay the same, which makes it a no-brainer for most young drivers.
4. Auto-Owners Insurance
Auto-Owners might not be as well-known as some other companies, but they offer solid value at $3,598 for full coverage for a 20-year-old. What sets them apart is their optional Accident Forgiveness coverage.
This feature means your rates will not go up after your first at-fault accident. For new drivers who are statistically more likely to have minor fender-benders, this can provide significant peace of mind and financial protection.
Their good student discount can save you up to 20 percent if you maintain a B average, and they offer a Student Away discount if you go to school more than 100 miles from home without taking your car.
5. Progressive
Progressive pioneered usage-based insurance with their Snapshot program, and they have refined it over the years. The average driver saves $322 per year with Snapshot, but the real value is that it gives safe young drivers a way to prove they are low-risk.
The program tracks things like hard braking, rapid acceleration, and when you drive. If you have good habits, you can earn significant discounts that overcome the typical age-based pricing disadvantage. You get an immediate discount just for signing up, and the final discount is based on your actual driving behavior.
While your rates could potentially increase if you drive recklessly, most participants end up saving money. For a confident young driver, this program can be a game-changer.
6. Nationwide
Nationwide offers competitive rates at $3,490 annually for full coverage, and their SmartRide program has earned top rankings from J.D. Power in the usage-based insurance category. The program tracks your mileage and driving behaviors like braking and acceleration.
You get a 10 percent discount just for signing up, with potential savings up to 40 percent for safe driving. The program will never increase your rates, even if it detects risky behaviors, which makes it risk-free for participants.
This approach is particularly good for young drivers who do not drive much, like college students who only use their cars occasionally.
7. GEICO
GEICO has built their reputation on being affordable and easy to work with online. At $3,675 for full coverage for a 20-year-old, they deliver on the affordability promise. Their business model focuses on keeping things simple and costs low.
The DriveEasy telematics program integrates directly into the GEICO mobile app and tracks phone use, braking, and acceleration. Unlike some competitors, this program can increase your rates if you drive poorly, but it also offers solid savings for safe drivers.
GEICO offers up to 15 percent off for full-time students with a B average or better, and their online tools make managing your policy straightforward.
8. Travelers
If you need specific coverage options or want to build a customized policy, Travelers excels in this area. At $3,994 annually for full coverage, they are competitive while offering an extensive range of coverage options and discounts.
Their IntelliDrive telematics program runs for 90 days and tracks speed, braking, acceleration, and driving times. You get an initial discount just for signing up, and your final rate depends on how you drive during the monitoring period.
Travelers is particularly good if you need to add specialty coverage like gap insurance or rideshare coverage to your policy.
9. American Family
American Family receives fewer customer complaints than expected for a company their size, which suggests they are doing something right. At $4,185 annually, they offer competitive rates and some unique discount opportunities.
Their Young Volunteer discount is particularly interesting. If you are under 25 and complete 40 hours of volunteer work per year for a nonprofit, you can earn a discount. This shows they value community involvement and believe it correlates with responsible behavior.
Their KnowYourDrive telematics program will not increase your rates for risky behavior, making it a safe way to potentially earn additional savings.
10. Allstate
Allstate has the highest average premium on our list at $6,847 annually, but their Drivewise program can help bring that down significantly for safe drivers. The program uses a mobile app to track your driving and provides discounts for safe behaviors.
What makes Drivewise stand out is its crash detection feature, which can automatically detect when you have been in a serious accident and offer assistance. For young drivers and worried parents, this safety feature adds real value beyond just the financial savings.
The high starting premium creates a strong incentive to participate in the telematics program, where safe drivers can earn their way to more competitive rates over time.
We have put together a comprehensive look at the ten best options for drivers under 25. Each company has its own strengths and unique features that might make it the right choice for your situation.
| Insurance Company | Average Annual Premium (20-year-old) | Key Discounts Available | Telematics Program | How Telematics Affects Rates | Customer Satisfaction | What Makes Them Special |
|---|---|---|---|---|---|---|
| USAA | $3,220 (Full Coverage) | Good Student, Military, Multi-Policy | SafePilot | Only Decreases Rates | Extremely High (Military Only) | Complete financial services for military families |
| Erie Insurance | Competitive rates vary | Good Student, Multi-Car, First Accident Forgiveness | YourTurn | Only Decreases Rates | Highest in Shopping Experience | Rate Lock prevents premium increases |
| State Farm | $4,708 (Full Coverage) | Good Student, Driver Training, Steer Clear | Drive Safe & Save | Only Decreases Rates | Near Top in J.D. Power Study | No rate increases from telematics program |
| Auto-Owners | $3,598 (Full Coverage) | Good Student (up to 20%), Student Away | Teen Driver Monitoring | Can Increase or Decrease | Better Than Expected | Optional Accident Forgiveness |
| Progressive | Varies, average $322 savings with Snapshot | Snapshot, Good Student, Multi-Car | Snapshot | Can Increase or Decrease | High Digital Satisfaction | Personalized rates based on actual driving |
| Nationwide | $3,490 (Full Coverage) | Good Student, SmartRide | SmartRide | Only Decreases Rates | Highest in Usage-Based Insurance | No rate increases for poor driving scores |
| GEICO | $3,675 (Full Coverage) | Good Student, Driver Training, Multi-Policy | DriveEasy | Can Increase or Decrease | High, Known for Affordability | Seamless mobile app integration |
| Travelers | $3,994 (Full Coverage) | Good Student, Student Away, Driver Training | IntelliDrive | Can Increase or Decrease | Great Customization Options | 90-day program with immediate signup discount |
| American Family | $4,185 (Full Coverage) | Good Student, Student Away, Young Volunteer | KnowYourDrive | Only Decreases Rates | Far Fewer Complaints | Unique volunteer work discount |
| Allstate | $6,847 (Full Coverage) | Good Student, Driver Education, Telematics | Drivewise | Can Increase or Decrease | High Purchase Experience Satisfaction | Crash detection feature included |
Conclusion
Shopping for auto insurance when you are young requires a strategic approach. The most important thing you can do is get quotes from multiple companies because rates vary significantly between insurers.
Start by determining whether you should be added to a parent’s existing policy or purchase your own. In most cases, being added to a parent’s policy is more affordable because you benefit from their driving experience and any loyalty discounts they have earned.
Use online comparison tools to quickly assess your options, but also consider talking to insurance agents who can help you find discounts that might not be obvious online. Many companies offer discounts that are not heavily advertised but can provide significant savings.
Remember that the cheapest policy is not always the best value. Look at the coverage limits, deductibles, and customer service reputation. You want a company that will be there for you when you need to file a claim.
Building a clean driving record is your most powerful long-term strategy. Every year you drive without accidents or tickets makes you more attractive to insurance companies and helps lower your premiums. This investment in safe driving habits will pay dividends for years to come.
The auto insurance market is becoming more competitive and technology-driven, which is good news for young drivers. Companies are increasingly rewarding safe driving behavior rather than just relying on age-based pricing. By understanding your options and making smart choices, you can find affordable coverage that provides the protection you need while building a foundation for lower rates in the future.