Which Is the Best Car Insurance Company for Youngsters?

Young drivers are considered high risk due to lack of experience and history and therefore almost always pay a lot more for auto insurance. However, there are a few ways of managing premium costs like staying on parents’ policies as long as possible and certainly in the teen years, claiming all the discounts you can get and shopping around and finding the companies offering the best prices for youngsters.

Young drivers are statistically more likely to cause accidents and damages due to lack of experience. This is clearly visible in teenage years as drivers between 16 – 19 are three times more likely to get involved in fatal crashes in comparison to 30 – 59-year-olds, according to the CDC. Youngsters are also more likely to claim since they aren’t financially established to pay for even small damages out of pocket.

Adding a teenage driver to your policy can increase your premiums substantially but this option will still be 62% cheaper on average than getting their own vehicle insurance policy. The best companies for adding a young driver to your policy are; State Farm, Auto-Owners, Erie, Country Financial and Farm Bureau, according to ValuePenguin and GEICO and Nationwide are other two companies mentioned in other studies.

When it comes to buying your own policy, the most expensive ages would be 16 – 19. A 16 year old driver pays nearly 4 times more for minimum liability only coverage and 3.6 times more for full coverage in comparison to a 25 year old. Thankfully, by age 19 premiums come down to nearly half of what it was at age 16. The costs are more manageable between the ages of 21 – 25 and you have many more companies willing to insure you based on your records either on your own or under someone else’s policy.

The above companies are still the good choices to start getting a few quotes when you want to buy vehicle insurance on your own. Progressive can be a cheap choice for youngsters who like to buy and manage their policies online. Allstate can offer a 10% Early Bird discount. State Farm can allow you to keep your good student discount up to age 25. The older you get with more experience the more choices you will have. Which company ends up the best for you will depend on your age, the discounts you can qualify for, your vehicle and choice of coverage.

Here are a few solutions that may help in keeping the costs down until you get over these ages with high premiums;

  1. Stay on your parents’ policy as long as you can and build history. Several companies including Auto-Owners count the years spent under someone else’s policy as insurance experience.
  2. Buying a cheap and cheap to insure automobile and going for Liability only policy can keep the costs manageable. The premium difference between full and minimum coverage is $4,801 (3 times) on average for a 16-year-old, $3,953 at 17, $3,446 at 18 and $2,640 at 19. Travelers, GEICO, State Farm, Mercury and Progressive in that order are the cheapest companies when a youngster wants to buy state-required minimum coverage, according to a WalletHub study.
  3. Generally, usage-based policies work better for young drivers. They may be high risk but it can be managed by knowing what to avoid and when to avoid driving. For example, not driving at night, keeping the mileage under control, watching your speed and going easy on the brake can help them convince companies like State Farm, Progressive and Auto-Owners to offer them lower rates with telematics-based automobile insurance.
  4. Youngsters should get 6 month auto insurance as this will accelerate experience related discounts and you will have more chance of taking your next birthday into account.
  5. Getting all the discounts you can qualify for is a very effective solution. For example, State Farm offers good student discounts until the age of 25 even after you finish school. Progressive has a few discounts including Snapshot telematics program. With Progressive you can get around 17% discounts by getting quotes and signing your policy online and going paperless. Allstate offers as much as a 10% Early Bird discount for buying your policy at least ten days before your renewal date. You can even save 3 – 4% with the auto-pay option. These are easy discounts and have nothing to do with age or experience.
  6. Even if you have your own car, your parents may be able to include you in their policies, as long as you still live with them. Again, companies like Progressive have a more flexible approach to multi-car insurance discounts. You may also get special treatment from your parents’ insurer, especially if you are still living with them. They can offer around a 10% saving simply because of the additional business from the same household. American Family offers special discounts to children of their current policyholders.
  7. As always, getting a few quotes and comparing prices can allow you to find the cheapest car insurance company for your circumstances and save money. Several companies are mentioned above and a few of them have programs to help you and advertise large discounts for various reasons. However, the real tell is the final price they offer. In the end, the insurer with the lowest rates for teen drivers is more likely to offer the best quote and not the company with the most discounts. And the only way of finding such a company is to get as many quotes as possible.

It is near impossible to pinpoint a single vehicle insurance company as the best for youngsters since each has a different age, lives in a different state, owns a particular vehicle, studies or works, lives with parents or out, happy with telematics or not. There are so many factors and they can change depending on so many variants. That is why you need to get at least five (ideally more) quotes and see your options.