Most teens can’t wait for the freedom and independence of the day they get their driver’s license. What is less fun to think about is car insurance. Unfortunately for new and teen drivers, car insurance can be quite costly. That doesn’t mean you can’t still get a good deal though. Here we break down which car insurance companies are the cheapest for new drivers. We also examine the cost of being added on to your parent’s car insurance plan, and the cost for an adult new to driving.
Table of Contents
Cheapest Car Insurance Company for Teen Drivers
Best Auto Insurance for Teen Drivers by State
Consider Getting Added to Your Parent’s Policy
More Ways to Save for Teens
Cost of Car Insurance for New Adult Drivers
Which Car Insurance Company is Cheapest For New and Teen Drivers?
We looked at over 200 cities and 103 companies to see which one was the most affordable for young drivers based on a sample 17 year old male driver. Like in our findings for the overall cheapest company, the cheapest for young drivers was also Erie Insurance. We found Erie on average to be about 3.2x less expensive than the national average.
Graph showing the cheapest auto insurance companies for new and young driver
Interestingly, none of the «Big Five» car insurance companies, State Farm, GEICO, Allstate, Progressive and Farmers are in the top five. Overall we found these companies to not be the most economical option for a young driver to pick as their first car insurer. Of the five above, Nationwide is the largest, being available in nearly every state with the exception of a small few. In the table below you can see the 15 cheapest insurance companies for young drivers, and their rates for our sample driver.
Rank Company Yearly Rate
1 Erie $2,411
2 The Cincinnati $2,969
3 Chubb $3,607
4 Grange Insurance Association $3,673
5 Nationwide $4,059
6 Country $4,316
7 State Farm $4,661
8 Grange Insurance $5,207
9 GEICO $5,208
10 Allied $5,265
11 Motorists Mutual $5,672
12 Unitrin $5,991
13 Progressive $7,017
14 21st Century $7,520
15 Safe Auto $7,529
Some Notable Companies by Region
Unfortunately, not every cheap company is available in every state. Some car insurance providers are more prominent in certain parts of the country, where they may be most affordable. Other companies may actually be more expensive in certain areas and should be avoided.
Best for Teenagers in the North East and Near Mid-West: Erie
Erie is the overall cheapest insurer for teen drivers. In every state we found Erie, it always beat the state average, and was frequently the first or second most affordable company overall. In Ohio and New York for example, the average price for Erie was nearly 3x under those states’ average.The main issue with Erie however, is that it is only located in nine states (Illinois, Indiana, Maryland, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, and Wisconsin). If you live in any of those states though, Erie should be your first choice for affordable insurance.
Best Auto Insurance for Teens in the West: Grange Insurance Association
For those in the West, Grange Insurance Association (not to be confused with Grange Insurance which operates in the south and mid-west), is a great alternative to Erie, The Cincinnati and Chubb which are all located in the east. Grange operates in California, Wyoming, Colorado, Washington and Oregon. In Oregon, rates from Grange were about 75% less expensive than the state average. For those looking for car insurance in California, Unitrin is also another cheap alternative.
Best Insurers for Teens Nationally: Nationwide & State Farm
In many states, State Farm beat the cost average, and in some cases like Utah, by as much as 2x. The ubiquity of State Farm makes its a viable option for people in an area not served by the more affordable companies we show above. Another benefit of State Farm is its highly touted customer service track record. Backed by one of the largest agent networks in the country, State Farm is regarded as the best for customer service amongst the large insurers. As we discuss here, forming a bond with an agent, especially at a young age, can actually end up saving you a good deal of money in the long run.
Nationwide is one of the most affordable large companies we found, being available in 46 of the 50 states, making it just a tad short of the «Big Five» in terms of availability. In states like North Carolina and Pennsylvania, Nationwide turned out to be the most affordable provider, even beating out the overall cheapest in Erie. There are several other states where Nationwide was the second or third least expensive provider as well.
Most Affordable Auto Insurers for Teens in Each State
The cheapest insurance in your state may not actually reflect the cheapest overall insurers we list above. While Erie and The Cincinnati are usually the first or second least expensive in the states they are available, there are also states like Arizona where the cheapest company is Ameriprise—a company that does not even appear in the top fifteen cheapest overall. Take a look below to see what is the best option in your state.
State First Cheapest Yearly Rate Second Cheapest Yearly Rate Third Cheapest Yearly Rate
Alaska Umialik $1,164 Allstate $1,284 State Farm $1,764
Alabama ALFA $1,272 Nationwide $2,433 The Cincinnati $2,673
Arkansas Columbia Insurance $2,980 Southern Farm Bureau $3,184 Shelter $4,092
Arizona Ameriprise $4,220 Progressive $4,394 Allied $4,490
California GEICO $2,564 Unitrin $3,329 Grange $4,086
Colorado Colorado Farm Bureau $2,840 Grange Insurance Association $3,176 American Family $3,820
Connecticut Unitrin $5,208 Middlesex $6,375 GEICO $8,325
Delaware GEICO $4,590 Grange $5,748 Nationwide $5,994
Florida Electric $4,131 21st Century $5,345 Mercury $6,221
Georgia Country $1,092 State Farm $1,495 Encompass $5,947
Iowa Pekin Insurance $927 Progressive $1,326 Farm Bureau $1,539
Idaho Grange Insurance Association $2,634 GEICO $2,790 Mutual Enumclaw $2,952
Illinois Erie $3,158 The Cincinnati $3,210 Hastings $3,504
Indiana Erie $2,400 The Cincinnati $2,745 GEICO $2,916
Kansas GEICO $3,204 Farm Bureau $3,612 Allied $3,720
Kentucky The Cincinnati $3,234 Kentucky Farm Bureau $3,744 Motorists Mutual $4,749
Louisiana Southern Farm Bureau $2,778 State Farm $6,672 Allstate $10,106
Massachusetts Plymouth Rock $2,247 GEICO $2,811 Commerce Insurance $3,267
Maryland Erie $3,039 Penn National $4,320 State Farm $5,079
Maine Concord $2,460 Countryway $2,856 GEICO $3,384
Michigan Chubb $3,299 Hastings $3,345 Miller $3,668
Minnesota Farm Bureau Mutual $3,225 Western National $4,158 Allied $4,308
Mississippi ALFA $1,553 Unitrin $2,472 Mississippi Farm Bureau $2,599
Montana Progressive $2,680 State Farm $3,244 Farmers $3,980
North Carolina Nationwide $1,452 GEICO $1,884 Titan $2,424
North Dakota Allied $3,180 North Star $4,056 State Farm $4,488
Nebraska American Family $3,282 GEICO $4,032 State Farm $4,110
New Hampshire Commerce Insurance $1,056 Nationwide $2,124 Concord $2,664
New Jersey Penn National $5,390 State Farm $5,661 Allstate $10,479
New Mexico GEICO $3,144 Allied $4,536 State Farm $4,746
Nevada Allied $2,352 Oregon Mutual $3,462 GEICO $3,630
New York Erie $1,967 GEICO $3,713 Central Insurance $4,885
Ohio Erie $812 Grange Insurance $1,320 Nationwide $1,488
Oklahoma Oklahoma Farm Bureau $3,396 Shelter $4,152 State Farm $4,752
Oregon Grange Insurance Association $4,300 State Farm $4,728 GEICO $5,072
Pennsylvania Nationwide $1,944 Erie $3,304 Chubb $3,958
Rhode Island State Farm $4,020 Grange Insurance $4,188 Quincy Mutual $5,784
South Carolina Southern Farm Bureau $2,666 Nationwide $5,686 GEICO $7,572
South Dakota Unitrin $2,760 Farmers $2,784 Western National $3,216
Tennessee Erie $1,160 Utica National $2,456 The Cincinnati $2,907
Texas Texas Farm Bureau $2,873 State Farm $4,054 GEICO $6,893
Utah State Farm $2,414 GEICO $2,645 Farm Bureau $4,404
Virginia Chubb $1,332 Nationwide $1,752 ALFA $1,986
Vermont GEICO $2,394 Concord $2,604 Grange $2,952
Washington Capital $2,882 Grange $3,110 PEMCO $3,823
West Virginia Pekin Insurance $1,076 Western National $3,026 GEICO $3,192
Wisconsin Erie $3,348 State Farm $4,732 GEICO $5,308
Wyoming Progressive $2,160 State Farm $3,888 Grange Insurance Association $3,888
The Cost of Joining Your Parents’ Car Insurance Policy
If the above prices are too expensive for you to afford on your own, a cheaper alternative will be to see if you can be added to your parents’ policy. The person most affected in this case is your parent, who is taking on a significant risk by adding a new, teen driver to their policy. As a result, insurance companies will increase their yearly payments. Nonetheless, the increase is still far less than the yearly price of getting insurance on your own, as you can see below.
Graph shows differences between a teenager getting car insurance through a parent or by themself
On average, adding a 17 year old male driver to an existing policy will add about $2,600 more per year. Compared to the national average of getting coverage yourself, a seventeen year old would save about $5,100 if you would come to an agreement with your parent in which you would pay for your portion of the car insurance. Whether they’ll want to add you to their policy is another question.
If your parents happen to insure their car with GEICO, you’ll get one extra perk. GEICO is unique, in that if you opt to join your parents’ policy, you can eventually leave to start your own, and receive a better rate due to your family being apart of GEICO. You can read more about GEICO’s Family Pricing here.
More Ways to Make Your Car Insurance More Affordable
There are a several ways as a young driver to save money on your premium. The first is by qualifying for discounts. Most major insurers will give you a discount for being a good student or taking a driver’s education course for example. If you go on your parent’s policy as well, most large insurance companies will knock down their premium if you are away at school, and have limited access to the vehicle.
Another significant way to reduce costs is by selecting your coverage carefully. The values above for our sample 17 year old driver are for getting full coverage, as in, all components of car insurance. Full coverage insurance is significantly more expensive than the minimum required by states. The reason being when you opt for full coverage, you are also buying collision and comprehensive coverage. The cost for just your collision insurance can make up half or almost half of your entire premium. The downside to not having collision coverage however, is that your insurance company will not pay to fix your vehicle if you are the one to crash it. You can read more about collision and comprehensive insurance here. It is for this reason we would recommend you only opt for basic coverage if your car is not worth much money—less than a few thousand dollars. If you were to crash a valuable car, then the cost of fixing it will end up being more expensive than what you would have paid for full coverage.
How Much is Car Insurance if You Are a New, Adult Driver?
This scenario is actually quite common, where a person decides to start driving well into their adulthood. While the risk-taking behavior of your teens may be gone, you are still an inexperienced driver. This makes you a riskier driver in the eyes of insurance companies. As an inexperienced adult driver, you should expect prices to be higher than what peers who have been driving for many years are paying. We looked at one GEICO quote from New York and found that an experienced adult of 30 years of age would pay $1,368 per year. In contrast, a teenager would pay nearly $10,000 per year, and an inexperienced adult of 30 years of age $4,296 per year. Overall, we expect prices for this group of driver to be less than a teenager, but significantly more than for an experienced adult.
Profile of Driver Yearly Average Rate (NY)
30 year old Adult with 14 Years Driving Experience $1,368
30 year old Adult with Less than One Year Driving Experience $4,296
Teenager With No Driving Experience $10,000
How Did We Get Our Info?
For the cheapest insurers, we acquired quotes from over 103 companies in 200 cities across the U.S. for a sample, 17 year old male driver who drives a 2011 Toyota Camry. We specified that he previously did not have insurance, and was opting for full coverage (see limits below). We restricted the top 15 cheapest companies to ones that were found in at least 25 cities nationwide. For adding onto a parent’s policy, we assumed the parent was a 45 year old male, married, with no previous accidents or incidents in their driving record.
Car insurance for teens, by definition, isn’t cheap. Little driving experience and a statistically higher chance of accidents makes teens a big risk to insurers, so they invariably get charged more for coverage. Because of this, the best cheap car insurance providers for teens are the ones that not only offer quality coverage and claims handling, but also special discounts to students and younger drivers to help take the sting out of those otherwise high monthly premiums. To find the best policy for you or your teen, you’ll need to shop around for quotes to find the best possible deal on the coverage options you want.
I looked at every nationally available insurer in the country to find those that consistently offer the most affordable rates and discounts to teen drivers, as well as exemplary coverage and customer service. GEICO came out on top, with high customer satisfaction rankings, low premiums, and the largest selection of teen-specific discounts. State Farm provides the best claims handling overall, but offered fewer discounts and higher premiums. Nationwide and Progressive also received high customer satisfaction ratings and offered a wide range of discounts to teens, so may very well be able to offer you the best deal, too. The only way to find the best deal for you or your teen is to request multiple quotes and compare your options.
The Simple Dollar’s Top Picks for Best Cheap Car Insurance for Teens
Best Overall: GEICO
Best Customer Service: State Farm
Honorable Mentions: Nationwide and Progressive
Each of these top picks have strong financial ratings and are known for offering consistently affordable rates. They provide quality coverage, 24/7 claims service, accident forgiveness, and special discounts to students and younger drivers to help take the sting out of those high premiums.
How I Found the Best Cheap Car Insurance for Teens
It needed to be available nationwide.
I focused on companies that provide auto insurance in all 50 states. That meant a number of regional and exclusive providers, like USAA, didn’t make the cut. However, if you’re dissatisfied with our top picks, you may want to consider other options like these. You very well could find a better deal.
The providers had to be reliable.
I axed any company with less than an A- rating from A.M. Best. I also required a similar rating from S&P, Fitch, or Moody’s. These companies measure the financial strength of insurers and how likely they are to be able to pay out your claims. You don’t see a lot of startups in the insurance industry because long-term stability is so important. If your insurer goes under, you lose your safety net, along with all the money you paid for it.
There had to be adequate coverage options.
Insurers are required by law to offer state-mandated coverages, as well as collision and comprehensive protection for your vehicle. Some also offer optional coverages that can come in handy after an accident. Teens are statistically more likely to be in a crash, so things like accident forgiveness and GAP coverage are worth considering. There’s also mechanical breakdown coverage, which is useful if your teen drives an older vehicle that may need repairs down the road.
Steep discounts were a must.
Many insurers also offer discounts to younger drivers, designed to offset their high premium rates. These include good student, safe driver, and student away at school discounts. Taking a driver’s ed or defensive driving course can also earn you savings with most car insurance companies. You may also have the option to let the insurer monitor your driving for a period of time. If it verifies that you’re a safe driver, you could be eligible for further discounts. Though less common, some companies also offer a vanishing deductible, which will help ease the strain on your wallet if you need to file a claim.
Customer service had to be top-notch, too.
Customer service is often overlooked, but it can do a lot to ease (or contribute to) the headache of filing a claim. That’s why I also evaluated the top companies based on the ease of filing a claim and their scores in J.D. Power’s latest auto insurance customer satisfaction survey.
The Best Cheap Car Insurance for Teens of 2018
Best Overall: GEICO
GEICO is known for offering low rates to all drivers and its list of discounts is hard to match. There are plenty for younger drivers to take advantage of, including good student, driver’s education and seatbelt use discounts. If your vehicle has airbags, anti-lock brakes, daytime running lights, or an anti-theft device, you can also save. GEICO is the only company on this list that doesn’t offer a monitored driving discount to its customers.
In terms of coverage, GEICO covers all the basics and also offers accident forgiveness and mechanical breakdown coverage. Accident forgiveness is an optional coverage offered by all our top picks that prevents your rates from going up following your first at-fault accident. Mechanical breakdown coverage is much rarer and pays for any repairs your vehicle needs as a result of normal wear and tear. GEICO is the only company on this list to offer this coverage, so if you’re interested in that service, it’s worth getting a quote.
What really helped GEICO clinch the top spot, though, was its Family Pricing Program. This program allows teen drivers who were previously on their parents’ insurance to get their own policy at a special rate. This usually ends up being more affordable than the rate a teen would get shopping for a brand-new policy. If you have a teen driver who will be transitioning to their own policy in a few years, this is something you may want to take advantage of.
Best Customer Service: State Farm
State Farm rates typically aren’t quite as low as the other companies on this list, but its reputation for excellent customer service earned it a place among the top picks. It scored above the regional average in seven out of 11 regions in J.D. Power’s auto insurance survey, with customers reporting a high degree of satisfaction with claims handling and their interactions with company representatives.
State Farm’s selection of discounts is comparable to GEICO’s, with good student, driver training and student away at school discounts. It also has an accident-free discount that kicks in after three years of accident-free driving, which is two years less than what most insurers require for this kind of discount. You can also save if your vehicle is equipped with an anti-theft device or passive restraint system. State Farm’s Steer Clear program enables drivers under 25 to save up to 15% on their premiums by completing a safe driving course online, at your local State Farm office, or through the company’s mobile app.
If your teen doesn’t drive often, consider enrolling in the Drive Safe & Save program. This monitors how often you drive and offers discounts for low mileage. You get a 5% discount automatically for signing up, and depending on how far the car is driven each policy term, you could cut your premiums in half.
Nationwide was a contender for the top pick, but fell short because GEICO had higher customer satisfaction ratings and better discounts for young drivers. Nationwide has a good student discount, but is missing other common options like driver training and student away at school discounts. There is an accident-free discount, but it doesn’t kick in until you have five years of safe driving under your belt. You can get credit for your safe driving by enrolling in the SmartRide program, where you install a small device in your car that monitors how many miles you drive, when you drive, and how fast you brake and accelerate. At the end of the program, Nationwide will look at the data and may offer you a discount for driving safely.
If you are currently insured through Nationwide you may be able to help your teen secure a more affordable rate with the Family plan. This plan enables all members of your household to share in your discounts. So, for example, if you’re eligible for a multi-policy or accident-free discount that your teen doesn’t qualify for on their own, these discounts will also count toward their savings, reducing their monthly premiums.
Progressive is another insurer known for offering low rates, but its few discounts don’t provide young drivers with many ways to save. Buying online and being a good student will earn you some savings, but there’s no option to save for completing a driver training course or for students away at college who aren’t driving their vehicles very often. The Snapshot program works similarly to Nationwide’s SmartRide. You put a device in your car that records when and how often you drive, and it notes any dangerous behaviors, like quick acceleration or braking. Safe driving will be rewarded with an additional discount.
Progressive is the only company on this list to provide GAP insurance as an optional coverage. If your car is totaled in an accident, this coverage helps pay the difference between the actual value of your vehicle and the total amount you have left to pay on your loan. This may be worth considering if your teen has a newer vehicle that isn’t paid off yet.
Car Insurance 101: What You Need to Know Before You Buy
Car insurance isn’t complicated, but there are some basic things you should understand before shopping for a policy.
How Much Insurance Do I Need?
Every state requires its drivers to carry auto insurance. The exact types and amounts vary, but most require around $25,000 of bodily injury liability coverage per person and $50,000 per accident, plus $10,000 of property damage liability coverage. Some states also require uninsured or underinsured motorist coverage and personal injury protection. For complete details about what your state requires, check with your DMV or take a look at our list.
If you have a lease or loan on your vehicle, your lender will also require you to purchase collision and comprehensive coverage. This is a smart idea anyway, because it protects your vehicle in the event that it gets stolen, vandalized, or damaged in a crash or natural disaster. If you own your vehicle outright, however, and it isn’t worth much, you may consider foregoing this coverage, as it raises your insurance premiums significantly.
Whenever possible, you should consider choosing more than the bare minimum coverage, though. If you get into an accident that causes someone a $40,000 injury, your $25,000 state minimum liability coverage won’t get you very far. You’ll be responsible for the extra $15,000 out of your own pocket. As painful as insurance premiums can sometimes be, they’re nowhere near as bad as one accident cleaning out your entire savings account. It’s up to you to decide how much coverage you need, but most companies recommend $100,000 of bodily injury coverage per person and $300,00 per accident, along with $100,000 of property damage liability coverage.
Factors that Affect Premiums
Insurance companies weigh many factors when determining auto insurance premiums, including:
Age: Younger drivers have less experience behind the wheel and are statistically more likely to get into accidents, which increases their risk to insurers.
Driving record: Teens don’t have much of a driving record to speak of, which makes it difficult for insurance companies to predict how safely they will drive, so they charge more to hedge against that risk.
Credit score: Creditworthiness is used as a measure of responsibility and has been correlated with how likely a driver is to file a claim. Teens are again at a disadvantage here because they have little or no credit history they can use to demonstrate their responsibility.
Where you live: If you live in an area where there’s a high risk of car theft, for example, you can expect to see higher rates. Cities, in general, have higher auto insurance premiums than rural areas. Rates are also dependent on what coverages are required by your state.
Your vehicle: Vehicles with high safety ratings and safety equipment like anti-lock brakes or an anti-theft device can earn you lower auto insurance rates.
Your gender: Statistics have shown that women are less likely to get into an accident than men, so they’re usually quoted lower rates, especially during their teenage years. Sorry guys!
Marital status and education level: Being married and having a college degree both decrease auto insurance rates because of a lower perceived risk. Unfortunately, this is also going to work against most teens.
Your level of coverage: If you purchase higher coverage limits or optional coverages like accident forgiveness or rental car reimbursement, you can expect to pay more than someone choosing the state minimum.
Ways to Save When Insuring a Teen Driver
It’s true that no matter what you do, a teen driver’s insurance is going to cost more than almost anyone else’s, but there are a few things you can do to minimize the strain on your wallet:
Go on a family plan. Rates are usually more affordable when teens are added to a parent’s plan rather than purchasing their own. Teens may be able to take advantage of additional discounts this way that they wouldn’t be eligible for otherwise.
Take advantage of discounts. Look at what savings are available to younger drivers. Most insurers will offer good student, driver training, and student-away-at-school discounts. They may be eligible for some vehicle safety discounts as well.
Allow driving to be monitored. If you can prove to the insurer that you don’t engage in dangerous driving behavior, like fast accelerating or braking, the insurer may give a break on its rates.
Limit driving time. Less time on the road means a smaller chance of getting into an accident. Some insurance companies will even give discounts to those who drive less than a certain number of miles each year.
Choose a safe vehicle. You want something with high safety ratings that isn’t a target for car thieves. Depending on what safety features are installed in the vehicle, you may be able to earn additional discounts this way as well.
Shop around. Get quotes from multiple providers before committing to a purchase. Make sure you look at how much you’re getting for your money, not just who offers the lowest price.
The Bottom Line
Car insurance for teen drivers can be expensive, but there are ways to cut costs without cutting coverage. Look out for discounts targeted to young drivers and special deals like family plans that let you take advantage of additional discounts. And be sure to get quotes from multiple providers before making a purchase. It takes time, but the potential for savings means it’s time well spent.