Are you paying too much for auto insurance?
If you’re a teenager or in your twenties, then the answer to the question is probably yes.
The good news is that if you know what to look for, you can potentially save hundreds of dollars annually on your car insurance.
If you’re looking for cheap car insurance for young drivers under 21 or the best auto insurance for teenage drivers, take a look at our top five choices.
Progressive really needs no introduction and is known as one of the most ethical insurance companies because they’ll help you shop around for providers. The company also has a tool called “Name Your Price,” which isn’t just lip service.
Check Out More Of The Best Car Insurance For Young Adults
Best For Tech Focused New Drivers
Esurance is very tech forward and are known to have some of the lowest rates in the car insurance space.
Best For Comparison Shopping
With Quote Wizard, you can compare 30 companies side by side and choose a policy that has the coverage you need.
Best For Using Any Contractor
State Farm also needs no introduction and they are one of the largest car insurance companies in the industry.
How Much Does The Best Car Insurance For Young Adults Cost?
Insurance companies have sophisticated algorithms that determine your risk and figuring out if you are going to end up having an accident or filing a claim.
Things that affect your premium will be:
Your years of driving experience are the number one determinant of the rate you’ll pay.
Males pay more than females for auto insurance. Partially due to their need for speed and also potentially due to their immaturity, more poor judgment, and penchant for more reckless driving. Yes, we know it’s an unfair stereotype!
The Value Of Your Car
Newer and more expensive cars cost more to repair and replace, which drives up insurance premiums.
The amount of coverage and limits such as deductibles will also be part of determining your overall costs.
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What Other Factors Affect Car Insurance For Young Adults?
While you can’t control your age, gender, or the car you’ve already chosen, other factors are in your control that can have a dramatic effect on your auto insurance rates. These include:
How much you drive
The less you drive, the lower your risk of an accident. Often, insurance companies take your driving frequency and distance into account.
Where you live
Each zip code has a risk profile, which includes theft, accidents, etc. Lower risk zip codes enjoy lower premiums. You can also pay less if your car is garaged.
It sounds draconian, but yes, car insurance companies can hike your premiums if you have bad credit.
The only exceptions are the states of California, Hawaii, and Massachusetts. If you live in one of these three states, then checking your credit to determine your premiums is off-limits.
The Different Types Of Car Insurance Coverage
There are several different types of coverage you can get with your car insurance policy. It's essential to understand what these different parts of your policy will cover.
Except for New Hampshire and Virginia, liability insurance is required in all 50 states and covers your cost if you are held liable for an accident and have to pay a victim's expenses.
However, this is the absolute minimum insurance you can purchase and it is comprised of both property damage liability and bodily injury liability.
When you buy a policy it will cover you for three different limits under those above coverage.
These limits are known as the limits of liability which is essentially the insurer's max liability to cover you.
You can find them on the declarations page and they usually look something like this (20/40/10) all expressing the different levels of coverage.
This optional coverage (often called comp insurance) goes beyond basic liability, and is usually purchased with collision insurance.
This part of the policy will have its own deductible that can be raised or lowered based on what you can afford.
Types of things covered by comprehensive insurance are:
- Missiles or explosions
- Falling objects
- Theft, vandalism, larceny, or miscellaneous mischief
- Civil commotions and riots
- Windstorm or hail
- Running into an animal
- Water or flooding
Having comprehensive insurance will probably be required by any lender or lienholder if you decide to lease or buy your car with a loan.
This level of coverage is often required if you are leasing or financing a vehicle. and will pay out if your car hits another car or object and you need to repair or replace your car.
Your collision coverage will have it's own deductible and limits of liability. Like with any policy, the lower the deductible, the higher the premiums.
Collision insurance is optional in every states; however, your lender may require this coverage if you purchase a car with a loan.
Approximately 13% of Americans don’t have auto insurance, and in Florida, that number is close to 27%.
If you’re involved in a car accident, and the person at fault doesn’t have insurance, then an insurance policy with uninsured motorist will cover the costs to make you whole.
Also, if someone only buys the minimum amount of insurance it might not be enough to cover everything.
But with coverage for uninsured or under-insured motorists it would cover the excess of what you’re owed.
Personal Injury Protection
Personal injury protection (PIP), is also called no-fault insurance, or medical payments coverage.
If an accident happens, regardless who is at fault, this part of the policy will cover you and your passengers medical bills.
This part of the coverage will only activate for items not covered by your health insurance.
While many states make personal injury protection optional, you might not need it if you have good health insurance. However, you could leave your self open for more risk.
INSURANCE WHERE YOU LIVE
Car insurance by state.
What Makes Up A Car Insurance Policy?
Whenever you file a claim, you’ll have to pay a deductible, which is the amount you must pay before the insurance company starts assisting with payouts.
Deductibles vary, but the most common is $500. You can also get lower deductible policies, but the trade off is that your monthly premiums will rise.
Another option is a higher deductible policy. Even though you’ll have to pay more out-of-pocket if there’s an incident, your premium will be lower.
The Monthly Premiums
The premium is the amount you pay for a car insurance policy. The amount of the premium varies by provider, and it takes into account the following:
- Driving record
- Where you live
- Level of coverage
- Discount eligibility
- Age and experience of the driver
- Make, model, and value of the vehicle
- Safety features built-in or added to the vehicle
- Running into an animal
Glass Coverage & Deductible
Coverage for your glass is probably the most underrated coverage in my opinion. However, depending on the type of car you have it could be very well worth it.
Recently, our neighborhood was part of some type of mass vandalism and the windows on one of our cars were completely destroyed.
Cost to replace both windows $3,500 - Our glass deductible was only $50.00 can you imagine if we didn't have glass coverage on our cars.
It can be wise to add glass coverage to your policy to protect you from these unexpected expenses and be sure to search for a policy with a separate glass deductible.
How To Lower The Cost Of Car Insurance For Young Adults
While you should expect to pay a higher price until you get a bit older, I wanted to give you a few of our recommendations for lowering your premiums.
- Keeping a high GPA if you are in College.
- Increase your insurance deductible, which will lower your premiums.
- Remove coverage you don't need from vehicles you own.
- Ask for a "low mileage" discount if you don't drive as often.
- Bundle some of your policies
- Take a drivers safety class for lower rates.
There is no need to wait around, if you want the best car insurance for young drivers you can click here or on one of the above buttons to compare quotes.
The truth is that no matter how good your driving record is, young people are likely going to pay more for the same coverage as an older person.
Still, not all coverage is created equal, so be sure to compare policies before making a final decision.
With car insurance being required in most stats your focus should be on getting the best coverage for the best price.