Whether you’re on your parents’ policy or starting out on your own, finding the best car insurance for young adults needs a little more attention than that of an adult.
Finding the best insurance for young adults is a mix of good news and bad news. The good news? You have lots of companies to choose from. The bad news? You have lots of choices — which means a lot of research.
But don’t worry, we’ve got your back. We looked at how the insurers stack up to one another. Most importantly, we want to know which is the best for young adults, so you can get your finances started on the right foot.
What makes a great car insurance company for young adults? We looked at the following criteria:
- Customer service ratings
- Financial stability of insurance company
- Rates for young drivers
- Extras such as accident forgiveness or young driver discounts
Overview of the best car insurance company for young adults
Before we get into greater detail, here’s a snapshot of the best car insurance companies for young adults and who we think the auto insurance carrier is best for. These are companies that work well with new drivers, students, and young adult drivers and while not always cheap car insurance, affordable car insurance with ample insurance discounts.
Best car insurance companies for young adults
Jake from State Farm can help all drivers feel special — including young adults. State Farm is the largest auto insurance provider in the U.S., but it hasn’t stopped this insurance titan from continuing to provide great service and coverage to millions of drivers.
offers the standard coverage for each state, but an impressive list of coverage options too. Options such as roadside assistance, car rental reimbursement, and rideshare driver coverage. You also have the option of specialty coverage, with teen drivers being one of them.
If you like the coverage options, you’ll love the discounts. State Farm offers discounts for everything from good grades, good driving, to reduced insurance premiums if you’re away at school.
State Farm’s overall customer satisfaction comes in about average among the auto industry ratings, but it’s Superior (A++) financial rating from A.M. Best makes it our top choice for young adults.
If your parents or you are part of the military family, then you’ll want to pay close attention to all USAA has to offer. It’s hard to beat the customer service, competitive rates, and financial powerhouse USAA has to offer.
has a reputation for providing exceptional rates for its members. In addition to the standard auto coverage options, including roadside assistance and total loss protection, there are at least 12 discounts available to members. From safe drivers to the length of military service, USAA works hard to get you the lowest rate possible.
Although not officially ranked with the JD Power 2020 Auto Claims Overall Customer Satisfaction Survey, USAA scored the high with 890 out of 1000 points possible. It also enjoys many favorable reviews from customers online. USAA shows its financial strength with an A++ AM Best Rating and AA+ S&P Global Index Rating.
The only reason USAA isn’t ranked #1 is due to the strict requirements for membership. Unless you’re part of the military family in some way, you won’t have access to competitive rates and discounts and fantastic customer service.
Founded in 1999, Esurance
is an Allstate company, with a promise of making insurance as simple as possible. Esurance is for those who prefer a complete digital experience, without going through an agent for a car insurance quote or to get questions answered.
Esurance has several discounts younger drivers may be able to take advantage of. The Fast 5 discount saves you 5% simply by getting an auto insurance quote and policy online (for the first year only). The Switch & Save is a 5% discount if you switch from another carrier to Esurance.
If you happen to be a PAC-12 student or alumni, you’re eligible for additional discounts. But what if you don’t affiliate with any school in the PAC-12? Esurance offers an education discount for residents of Arizona, Colorado, Oregon, or Utah you may be eligible for instead.
The DriveSense® mobile app tracks your driving habits and provides feedback. You don’t have to be an Esurance customer to use the app, but if you are, you get an additional discount on your premiums.
The app gives you access to all the things you need to do with car insurance. File a claim. Track your claim. Make a payment. Call for roadside assistance. In other words, the app is one more way Esurance makes the car insurance process a little easier.
While Esurance is a relatively young company (compared to the age of the other insurance giants), it has the power of Allstate for its financial backing. Esurance ranks close to the industry average for the JD Power 2020 Auto Claims Overall Customer Satisfaction Survey.
is another big-time insurance company with plenty of star power and financial strength behind it. With Nationwide, you can also get a variety of specialized coverage options and programs to customize your car insurance policy for your budget, whether you’re famous or not.
Nationwide has specialty options such as gap coverage, roadside assistance, total loss deductible waiver, and accident forgiveness. These are important options to list because they’re not always available with other mammoth-sized insurance companies.
Nationwide is available in almost every state and offers 12 discounts to lower your premiums. We also like how Nationwide offers the On Your Side® Review every year to ensure you’re getting the most discounts and best coverage possible.
Nationwide performed very well in the JD Power 2020 Auto Claims Overall Customer Satisfaction Survey, ranking above the industry average. Nationwide also maintains a Superior financial rating (A+) with A.M. Best.
When it comes to discounts, Geico
doesn’t kid around. And young adults have access to these discounts just like anyone else.
From good student to good driver, Geico has several discounts younger drivers can qualify for. Geico also has a long list of affinity membership discounts. This means if you’re a member of one of the 500+ groups, such as sororities, fraternities, or college alum, you might be eligible.
In addition to discounts, Geico offers a ton of coverage options, in addition to the standard auto coverages you need, so you can customize your policy based on your budget. Optional coverages include emergency roadside assistance
, car rental reimbursement, and a mechanical breakdown option (similar to an extended car warranty).
Geico makes it easy to manage your policy on your smartphone or online. You can submit your information online or through the app for instant access, or you can work with an agent if you need to. Geico’s website and app are known for a great user experience — so you can get on with your life if you do have an accident.
Geico has strong financial ratings, such as the AM Best A++ rating, AA+ S&P Global Rating. Customer service rankings are also strong — including the highest overall ranking in the J.D. Power 2020 U.S. Insurance Shopping Study.
It’s hard to turn on the television without seeing a funny Progressive commercial, but Progressive's ability to save for young adults is no laughing matter. Progressive is well known for providing an extensive list of discounts to its policyholders.
provides all the standard auto insurance coverages you need, plus a long list of options. The options available range from roadside assistance, loan/lease payoff, car rental reimbursement — even coverage on your custom, after-market equipment (which is hard to find with insurance companies).
Along with the numerous coverage options, you have lots of discounts to lower your premiums. Discounts for drivers such as multi-car, multi-line policy, or using the Snapshot: Safe driver discount program. Progressive also has the Name Your Price® Tool, which helps you customize your auto policy to fit your current budget — and these are all available to young adults.
Progressive has a set of strong financial ratings, including A+ AM Best and AA S&P Global Index Rating. Progressive gets dinged a little in the JD Power 2020 Auto Claims Overall Customer Satisfaction Survey, where it ranks well below the industry average. But overall, Progressive deserves a look because of the discounts and rates for young adults.
American Family Insurance is only available in 19 states, but it’s worth it for young adults to review if you live in a serviced area. The company offers a wide range of coverage options, including ones not offered with other big-name companies (like gap coverage). You can customize your policy with a variety of custom coverage levels, all while still keeping your discounts.
American Family has a wide range of discounts offered —from safe driving to college students away from home to good student discounts. There’s even a discount offered if you spend time volunteering.
The app gets 4.8/5 stars because of its ease-of-use and ability to handle all-things-policy-related right there on your smartphone.
The JD Power 2020 Auto Claims Overall Customer Satisfaction Survey finds the company to be well-below industry average. But with the number of discounts available and intuitive app, you’re likely to find the right policy for your budget as a young adult.
Financially speaking, American Family is strong, with an A rating from A.M.Best. Overall, the combination of discounts, options, and strong financials make American Family a great choice for young adults and auto insurance.
Farmers Insurance offers the standard coverages for auto, but you’ll like the unique coverage options Farmers offers — from roadside assistance, rideshare, gap insurance, to extended equipment coverage.
is easy to work with too, with an intuitive website and tech-savvy app for all the digital lovers. You can start a claim through the app, request roadside assistance, make payments, even get fast quotes for coverage. Farmers uses a large network of agents and provides 24/7 customer service, in case you’re looking for a human voice.
Farmers Insurance doesn’t have any complaints registered with the NAIC, which is unusual for such a large insurance company. Farmers ranks above the industry average in the JD Power 2020 Auto Claims Overall Customer Satisfaction Survey, further speaking to its great customer service.
Financially speaking, Farmers remains strong and stable with an A Rating for S&P and B++ AM Best rating.
Allstate and Liberty Mutual were virtually tied for the highest premiums on our list. But Allstate is worth considering because Allstate will often insure drivers considered high-risk.
features coverage options you don’t always find with other insurance companies. Specialty coverage such as rideshare insurance or custom sound equipment coverage, for instance. Allstate has an equally impressive list of discounts, so you might be able to get the premium to work for your budget. Among the numerous discounts are ones like good grades, driver away from home, and green vehicles.
Programs such as accident forgiveness and Deductible Rewards® to further help with premiums. It’s also worth noting the versatile app with high ratings and positive reviews. But the app has extra features such as a Digital Locker® (to keep track of your belongings) and a place to keep track of your digital identity.
Allstate scores well with the JD Power 2020 Auto Claims Overall Customer Satisfaction Survey, ranking in the Top Tier. Allstate does have a strong, stable financial outlook with an A+ A.M. Best rating.
Founded in 1912, Liberty Mutual
is no stranger to providing comprehensive insurance policies, that includes for young adults. Liberty Mutual can save you money by bundling your insurance policies (such as renters and auto) and through many other discounts.
Liberty Mutual offers basic auto coverage but has a wide range of options to further customize your policy. Options for your policy such as collision, Liberty Mutual Deductible Fund® (where your deductible reduces over time), gap coverage, and roadside assistance.
Liberty Mutual offers several discounts — among the most of any auto insurance carrier. For instance, if you go online to obtain your quote, you automatically receive a 12% discount. Other discounts include paperless statements, good grades, safe driving, and student away from home.
Liberty Mutual receives an A rating from A.M. Best for its strong financial outlook. Where Liberty Mutual could use some improvement is with overall customer satisfaction. In 2020, Liberty Mutual was ranked four spots below the industry average, but the digital experience and discounts still make them a top choice.
Best car insurance for young adults summary
|Insurer||A.M. Best Rating||JD Power 2020 Top 25 Rank||Discounts for young drivers||Average premium for driver in 20s|
Quick car insurance quotes
If you're looking for a way to weed through all of the quotes, there are companies who are working with the auto insurance companies to do the comparisson shopping for you. These free services provided by companies like Gabi and CarInsurance.net make money from the insurers giving you all the benefits of getting free quotes from the best companies in mere minutes.
If you’re wondering about staying on your parents’ auto policy...
There are circumstances where you need your own auto insurance policy and when it’s ok to stay on your parents. Usually, staying on your parents’ policy is less expensive, so it’s understandable to try to stay on.
You can stay on your parents’ policy if:
- They own your car and you live with them
- They own your car and you’re a full-time student away from home
- You live with them, they own your car, and you’re married
You need to get your own policy if:
- You own your own car — even if you live with your parents
- Your parents own your car, but you no longer live with them
If you and your parents have joint-ownership, then it’s up to the insurance company to classify you as a dependent or not.
How can I save more money on my car insurance while I’m considered young?
We get it. When you’re starting out, every.single.dollar.counts. And insurance isn’t a place you want to cut too many corners on, but you don’t want to overpay either. There are a few things you can do to lower your bill:
- Choose a less expensive car to drive, an older car, and/or a car with anti-theft devices and safety features, which may mean special discounts.
- Keep your credit score intact. Yes, car insurance companies are paying attention.
- Take a defensive driving course. Students who take driver's education outside of school can also find discounts that will help you save money.
- Maintain good grades. If you are a student, your GPA matters to insurance companies and many offer good student discounts if you have a B average or greater.
- Keep a claim-free driving history. The bottom line, a moving violation, at-fault accident, DUI, or speeding ticket will drive up your car insurance costs. According to The Zebra, one ticket can cost you as much as $1,200. The more you can avoid a ticket and keep your driving record clean, the better off your auto insurance rates will be.
How much of a deductible should I carry?
is an amount you’re responsible for with a car accident before your insurance coverage kicks in. You can go low ($250) or a higher deductible ($1,000) — and almost anywhere in between. The higher your deductible, the lower your premium will be. However, if you must pay out of pocket, you need to make sure you can cover the amount with savings.
A good rule of thumb is to have enough in the bank to cover your deductible. If you only have $300 in savings, then a $250 deductible could be better. However, if you have $500 in savings, a $500 deductible would be better and your premium would be lower.
I’m planning to move to another state, will my car insurance rates go up?
It’s amazing how much of an impact location has on your car insurance. Of course, there are other factors, but location is a major one. The Insurance Information Institute has a helpful guide on the most expensive, and least expensive, states for car insurance.
Turns out, Louisiana, Michigan, Florida, New Jersey, and New York round out the Top 5 most expensive states for car insurance. If you plan to move to North Carolina, Wyoming, Wisconsin, Indiana, or Vermont then you’re in luck — those are the least expensive states.
Do I need car insurance if I’m going off to college but leaving my car at home?
You might be tempted to cancel your auto insurance if your car is sitting at home while you’re away at school or for an extended period of time. Whatever you do, you should always keep your insurance intact. Not only is it a state requirement for most states, but you’ll continue to have protection if your car is stolen, damaged by nature, or vandalized.
If you’re worried about spending too much on a premium, talk to your agent or contact your carrier to let them know your car isn’t going with you. This might make you eligible for additional discounts which can lower your bill.
Why should I use this guide?
Adulting is fun... ok, that’s a stretch. But whatever we think about getting older, for most people it means we take on more responsibility. And nothing says adult quite like obtaining an insurance policy.
But this doesn’t mean just because we’re older then we are automatically wiser. It takes time to research and pull the information together, especially for important financial decisions. This guide is intended to help anyone out who is researching the best options.
The bottom line
When you’re younger and haven’t been driving too many years, car insurance rates may be the absolute last thing on your mind. But car insurance is something we all have to have. Choosing a company like State Farm, which is the top on our list because of great discounts, coverage options, and the smooth claims process is one way to start making your own financial decisions.
There’s never a better time than now to start making good financial choices. Whether it’s your money or your parents' money, it’s a shame to waste it.