Many factors help auto insurance companies determine your insurance rates. However, one of the biggest variables that most insurers consider is the driver's age, with teens and young adults younger than 25 receiving some of the highest rates across the board. Stats show that young drivers tend to end up in more accidents than older, more experienced drivers; also, they typically drive older, less reliable cars with fewer safety features.
Therefore, when you select an insurance company for your young driver, look at several factors. We scoured carriers' offerings, looking at average premiums, young driver discounts, accident forgiveness policies, and more to compile a list of the best car insurance companies for teen and young adult drivers (or families with the same). Based on our findings, our choices are:
Below you'll find auto insurance offers available from our advertising partners, followed by our complete in-depth list of the best car insurance companies for teens we've found.
Best Car Insurance Companies for Teens of January 2022
Best Overall for New Drivers : Erie Insurance
Named after its Pennsylvania hometown, Erie Insurance has provided car insurance since 1925. The company is known for its sterling record in settling claims and for its overall client service. In fact, J.D. Power ranked Erie as number 7 among insurance companies in the nation for its 2020 U.S. Auto Claims Satisfaction Study.
Pros and Cons
Long history of financial stability, reliability
Good rates for young drivers
Discounts geared toward drivers younger than 21
Not available nationwide
No online claims-filing
Erie unfortunately is not a nationwide carrier; rather, it is a region-specific insurance company, based primarily in the Northeast and Midwest. Its products are available in Illinois, Indiana, Kentucky, Maryland, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, Wisconsin, and the District of Columbia. To verify coverage in your area, you can visit the Erie Insurance website and enter your zip code.
In the areas it serves, Erie Insurance offers all of the state-required auto insurance coverage. Additionally, it offers:
- Pet Insurance (for injuries during an auto accident)
- Personal item coverage for items damaged, destroyed, or lost in an auto accident
- Glass coverage for windows, windshield
- Roadside assistance/rental car coverage
- Locksmith services
Also, for just $35 or less extra per year, you can add Erie Auto Plus to your policy. With this plan, you receive diminishing and waived deductibles, a $10,000 death benefit, and other elevated benefits.
Among the wide array of discounts are some rate reductions that will specifically appeal to parents of teen drivers or young drivers paying for their own insurance policy. These deals include:
- Youthful Driver Discounts for unmarried drivers younger than 21 who live with their parents
- Driving Training Discounts for drivers younger than 21 who complete an accredited training course
- Erie Rate Lock, which keeps premiums the same every year regardless of accidents
- Multi-car and multi-policy discounts of up to 25%
For a smaller insurance company, Erie Insurance offers a decent website that allows customers to do a lot in regards to their policies. On the site, you can obtain a car insurance quote, find a local Erie Insurance agent, access your account to pay your bill, file an auto-glass claim, and more.
Erie recently added a mobile app available for Android devices. From there, you can manage your billing, track claims, and more.
Despite being a regional car insurance company, Erie Insurance doesn't clown around in terms of customer satisfaction. In fact, J.D. Power awarded Erie the #2 spot in the mid-Atlantic region and #1 spot in the North Central region during the 2021 U.S. Auto Insurance Study.
Erie maintains a complaint index of 1.10 from the National Association of Insurance Commissioners (NAIC), representing a slightly higher than average level of complaints relative to other companies in the market. The company has an A+ rating in financial strength from AM Best.
Our Verdict on Erie Insurance
Erie Insurance has an extensive history and excellent reputation in the insurance industry. Additionally, Erie offers some of the best premium rates for young drivers—close to 60% cheaper than the national average.
Obviously, the biggest drawback to Erie Insurance is its limited availability. Additionally, Erie Insurance does not allow customers to file auto claims online: They must call their local agent or use the toll-free number to the corporate service center. However, customers seem satisfied with the insurance claims process as a whole, even if it strikes some as a bit old-school.
Best for College Students : Allstate
Some college students may commute to campus daily from home, while others leave cars parked for weeks on end while they live on campus. Regardless of what your college experience holds, though, Allstate will leave you in good hands while you work on earning that degree.
Pros and Cons
Great savings options specifically geared towards college students
Great mobile app that the whole family can use
Coverage available in all 50 states
Higher than average rates
Allstate is the fourth largest auto insurance company in the country and offers policies in all 50 states. With more than 15,000 Allstate agents across the country, you likely can find an Allstate agent close to your home. Allstate requires that you enroll with one of its local agents, but if you would prefer a completely online experience, you can look into Esurance, a subsidiary of Allstate.
As one of the leading car insurance providers in the country, it's no surprise that Allstate offers everything you could want and more when it comes to coverage. In addition to all the traditional car insurance coverage types, Allstate also offers roadside assistance with towing coverage, sound system insurance for damaged or stolen after-market systems, and rental car reimbursement. Additionally, Allstate offers rideshare insurance, a referral for classic car coverage, and explanation of Mexican travel insurance if you plan to drive across the border.
Obviously Allstate offers a great list of discounts. However, we selected them as the "best for college students" because of the numerous ways that college students can save with Allstate.
- A Smart Student Discount for drivers under 25 and who do at least one of the following: maintain a B- average or GPA of 2.7 or higher, attend college at least 100 miles from home and don't have the car with them, or successfully complete the teenSMART driver education program
- The Milewise Program that bases premiums on the number of miles you drive per month
While it may not match some other company sites, Allstate’s website actually includes several tools and resources for customers. The site is filled with blog posts that provide advice on everything from coverage selections to relocating and more. Furthermore, potential customers can obtain a quote, contact a local agent, and read about product offerings before switching over to Allstate.
Allstate also offers a convenient smartphone app for customers. With the app, you can pay your bill, manage your policies, check on the status of a claim, and request roadside assistance all from your smartphone. Customers also can use the app's Drivewise feature to track their driving behaviors, which can be a great asset for parents who want to keep an eye on their teen's driving habits.
While Allstate offers some great rates and discounts, the company doesn't seem to shine as much as others in terms of customer satisfaction. In fact, Allstate ranked third out of eight large national insurers during J.D. Power's 2021 Insurance Shopping Study. With that being said, Allstate does hold an A+ rating with AM Best.
Our Verdict on Allstate
Allstate's discounts and wide availability make it a great choice for many families. What's more, the company offers a great mobile app and many online tools in addition to its extensive network of local agents.
With that being said, many sources note that Allstate has low customer satisfaction ratings in many parts of the country. The company also has slightly higher average premiums than other competitors on this list and is known for rate hikes.
Read the full review: Allstate Car Insurance
Best Student Discounts : State Farm
State Farm has grown over the past century into one of the largest insurance companies in the nation: In fact, with 84 million policies across the U.S., it insures more cars and homes than any other carrier. State Farm has top ratings from AM Best. State Farm requires agents to exclusively sell State Farm. This means that agents can't offer you auto insurance from multiple companies, and instead will exclusively work with State Farm and tend to be familiar with State Farm's offerings. Its network of local agents prides itself on providing the best possible customer service.
Pros and Cons
Large, established carrier
Numerous discounts geared to students
Mediocre customer satisfaction/claims processing
Pressure to work through a local agent
State Farm is available nationwide in all 50 states and the District of Columbia. Unlike some companies that work only out of a corporate headquarters—increasingly common in this digital age—State Farm has a decentralized model, functioning more like a network of regional agents dedicated to their local communities.
State Farm offers all the needed and desired coverage for any driver nationwide. Additional coverage options include:
- Rideshare insurance for Lyft and Uber drivers
- Emergency roadside assistance
- Rental car & travel expense reimbursement
State Farm seems to love young drivers—students in particular. Among the breaks it offers:
- Good Student Discount of 25% for those in high school and college who maintain good grades
- Student Away Discount for families with a college student who uses the car only when at home
- Defensive Driving Discount for anyone who completes an approved driver safety course
Additionally, State Farm offers a Steer Clear discount of up to 15% for drivers younger than 25 who maintain a clean record with no traffic violations for three consecutive years.
In comparison to some of the other car insurance companies on this list, State Farm's digital experience lags a bit behind. However, the company is making strides both in its website and smartphone app offerings.
In fact, the company now offers unique smartphone apps for its Steer Clear program and the Drive Safe & Save program that tracks driving behavior. These apps in particular appeal to young drivers and their parents, as they can allow teens to evaluate their driving habits and learn where to make improvements for the future.
Many car insurance customers love State Farm because it is one of the few national car insurance providers that still exclusively uses local agents to provide outstanding customer service. But don't just take our word for it—check out State Farm's #6 rating on J.D. Power's 2020 claims satisfaction study. State Farm also maintains a 4-star rating (out of 5) on Consumer Affairs, an independent consumer rating site.
Our Verdict on State Farm
State Farm is a venerable, trusted insurance company, one of the oldest in the U.S. It offers numerous discount options for young drivers, especially students, whether they live at home or are away at school.
Although State Farm does offer highly competitive rates for auto insurance, most reviews and ratings sites state that State Farm’s customer service is mediocre at best. Also, while it offers services online, including quote offerings and claim filing, State Farm prefers that you work with one of the company’s local agents—a drawback for do-it-yourselfers.
Read the full review: State Farm Car Insurance
Best for Good Drivers : Progressive Insurance
Since 1937, Progressive Insurance has grown into a household name, especially in the last decade—thanks in large part to its tongue-in-cheek ads featuring perky agent Flo and, of late, her nerdy sidekick Jamie. Behind the jokes, though, lies a solid company that is especially sensitive to safe drivers.
Pros and Cons
Extensive young-driver-oriented discounts
Generous safe-driver discount
High premium rates
Poor record in claims satisfaction
Progressive provides insurance in all 50 states and the District of Columbia. However, it doesn't work through a proprietary network of agents as State Farm does. Although some local independent insurance agents sell Progressive, along with other carriers' products, most Progressive customers manage their policies online.
Like most other car insurance companies, Progressive offers all of the basic liability and collision/comprehensive coverages, plus things like uninsured motorist coverage and personal injury protection. Additionally, Progressive offers the following:
- GAP Coverage
- Roadside Assistance
- Custom Parts Coverage for aftermarket additions
- Rideshare Coverage
- Deductible Savings Bank, which drops your deductible amounts the longer you go without an accident
- Mexico Auto Insurance for those taking their car across the border
While many companies reward safe drivers, Progressive offers one of the best discounts in the industry. Those who go three years without any accidents or violations can earn upwards of 30% off their annual premiums. Most other firms only offer 10%–20% off.
Additionally, Progressive offers the following discounts to young drivers:
- Teen Discount available to parents who are insuring a driver younger than 18
- Good Student Discount for high school and college students who maintain a B average
- Distant Student Discount available to families with a child who is away for college
- Online Quote Discount, which provides an average discount of 7% just for quoting your insurance online
- Pay In Full Discount for customers who pay six months worth of premiums in advance
Progressive actually offers one of the best digital experiences out of all the major car insurance companies on this list. The Progressive website includes a variety of useful features that can help drivers save money, such as the Name Your Price Tool and side-by-side Comparison Tool.
What's more, Progressive's smartphone app lets customers obtain 24/7 roadside assistance, file a claim, make payments or policy changes, and even obtain digital ID cards with just a few swipes.
When it comes to customer satisfaction, Progressive's standing is somewhere in the middle among most major car insurance companies. For example, J.D. Power rated Progressive in the bottom half (22nd out of 25) of insurers during its 2020 Auto Claims Satisfaction Study.
Our Verdict on Progressive Insurance
Given that Progressive offers some great ways to compare costs and find coverage that fits your budget, it's ironic that many customers and independent review sites find the company's rates are, on average, higher than some other companies on our list. Of course, that doesn't take into account all the discounts your young driver might qualify for, especially that juicy 30% off if they're a good driver. Unfortunately, J.D. Power's 2020 claims satisfaction ratings imply that policyholders are less than thrilled with the payouts on their claims, so that may be something to keep an eye on if you're considering Progressive.
Read the full review: Progressive Car Insurance
Best for Accident Forgiveness : Nationwide
As we noted in our intro, young drivers are some of the most likely to end up in an auto accident. In fact, the CDC claims that teenage drivers are nearly three times more likely to be in a fatal crash than their older counterparts. Many insurance companies heavily increase the cost of your insurance after an accident, especially if you and yours are deemed at fault. Nationwide Insurance offers one of the best accident forgiveness programs in the industry, which is why we are featuring it on our list of the best insurance choices for young drivers.
Pros and Cons
Generous accident forgiveness plan
Sizeable discount for safe drivers
Accident forgiveness not available in all states
Company doesn't operate nationwide
Nationwide Insurance sells policies in most states. However, to paraphrase its familiar jingle, Nationwide is not "on your side" in Alaska, Massachusetts, Hawaii, or Louisiana.
Nationwide offers all of the personal and auto coverages you would need for your young driver. Additionally, Nationwide Insurance offers the following specialty coverages:
- 24/7 Roadside Assistance
- Vanishing Deductible Policies
- Total Loss Deductible Waivers
And then there's that Accident Forgiveness plan. Most insurance companies don't extend accident forgiveness to additional drivers on an insurance policy; some don't offer it to drivers younger than 18 at all. Nationwide does both. Given how often teens are put on their parents' insurance and how their premiums can soar as much as 30% after their first at-fault incident, Nationwide's plan can offer significant savings.
When it comes to discounts, Nationwide is highly competitive with all the other insurance companies on this list. For young drivers, in particular, Nationwide offers:
- SmartRide Program that tracks usage and driving habits for drivers
- Good Student Discount for high school and college students who maintain a B average
- Multi-car and multi-policy discounts for families who bundle insurance coverages
Like most other car insurance providers with national recognition, Nationwide's website and smartphone app both make managing your car insurance policy easier. Nationwide’s website includes some great resources plus a customer portal where you can pay bills, manage policies and view documents from the comfort of your home.
With Nationwide's smartphone app, you can manage your policy, start a claim, call for roadside assistance and even access your insurance ID cards in case you don't have them in your glove box.
Nationwide says it's "on your side," but based on customer satisfaction ratings, that may depend on who you ask. The company fell just above average (9th overall) in J.D. Power's 2020 Auto Claims Satisfaction Study. Based on our research, it seems that while most customers are satisfied with their overall experience with Nationwide, those who file claims feel the wait time is too long. While this can be frustrating at the moment, it's not a total deal-breaker.
Our Verdict on Nationwide
We recommend Nationwide for anyone who thinks their young driver may end up in an accident. Furthermore, Nationwide's SmartRide Program can save families up to 40% if their young driver maintains safe driving habits.
Nationwide isn't available in all states, though. Furthermore, even the Accident Forgiveness program isn't available everywhere, so check with Nationwide about your coverage options before signing up.
Best For Military Families : USAA
For current or former military members and their families, USAA car insurance is hands down a top choice based on its low premiums and outstanding customer service. In fact, J.D. Power ranks USAA as their best carrier nationwide.
Pros and Cons
Highly competitive rates
State-of-the-art website and app
Coverage limited to current/former military
No local agent network
Although USAA is offered across the United States, enrollment is limited to military families. In fact, enrollment is limited to active, retired, and honorably separated members of the U.S. military, ROTC, and other commissioning program officer candidates, and adult children of USAA members.
In addition to the required minimum car insurance coverage, USAA offers rideshare coverage for Lyft and Uber drivers, 24/7 roadside assistance, and towing coverage. The latter two can be especially beneficial for accident-prone young drivers.
USAA offers significant discounts to all its customers. When it comes to perks that pertain to young drivers specifically, though, USAA offers the following:
- Family Discounts for people under 25
- A Driver Training Discount for people under 21 who complete a training course
- Good Student Discounts for high school and college students who maintain a B average
Although you may not expect it from a smaller insurance provider with a limited customer base, USAA offers a great digital experience for its customers. The USAA website allows customers to grab free quotes, research coverage options, and even study insurance and money management advice. You can also file claims online.
Furthermore, the USAA smartphone app provides customers with secure access to pay their bill, access digital ID cards, or even start the claims process.
Even though USAA offers insurance only to a limited pool of drivers, the company consistently provides some of the best customer service in the industry. In fact, USAA consistently receives high ratings from J.D. Power during their annual car insurance studies. What's more, many USAA clients remain with USAA for life.
Our Verdict on USAA
USAA offers amazing rates and outstanding customer service. The company also has a highly comprehensive website and mobile app for tech-savvy customers.
However, USAA has limited eligibility since it’s only available to military families. Also, the company does not have any local agents, so the only option is to use the website or call USAA’s toll-free number, which offers 24/7 service.
Read the full review: USAA Car Insurance
Compare the Best Car Insurance Companies for Teens
|Erie Insurance||Best Overall for New Drivers|
|Allstate||Best for College Students|
|State Farm||Best Student Discounts|
|Progressive Insurance||Best for Good Drivers|
|Nationwide||Best for Accident Forgiveness|
|USAA||Best for Military Families|
What Types of Coverage Are There?
Although there are some exceptions, most car insurance companies offer:
- Bodily Injury and Property Damage Liability to cover the other party's medical care and damages when you are the at-fault driver
- Collision Coverage to cover your own vehicle’s damage regardless of fault
- Comprehensive Coverage to pay for non-accident related damages
- Personal Injury Protection/Medical Payments to cover your medical expenses in case of an accident
- Uninsured Motorist Coverage to cover your damages and medical expenses when the at-fault driver doesn’t have accurate coverage
- Guaranteed Asset Protection (GAP) Coverage to cover the gap between your car's lease or loan and the determined value in the case of a total loss
How Much Coverage Do You Need?
Given the depressing odds of younger drivers being in an accident, the more coverage the better, especially if your teen or college student is driving a fairly new car under a lease or loan. However, most states only require limited coverages, so you can sometimes save money by only insuring a car and its driver for the mandated protection and amount.
Can Teen Drivers Join Their Parent's Insurance?
Yes, they can. Nearly all insurance companies allow you to add drivers to existing policies; in fact, to be covered, a driver must be enumerated in the policy (insurance factors not only the vehicles on the policy but the listed drivers for each car). This means that you must have your teen on your policy before filing any claim that involves them. Coverage can't apply retroactively.
Always shop around for rates before automatically adding your newly licensed teen driver to your car insurance. Your current carrier should be your first stop, given breaks companies often offer for multi drivers and loyal customers. With that being said, some companies charge more to add a young driver than others do, and it never hurts to know what other options other insurers may offer—for bargaining with your carrier if nothing else.
The Bottom Line
Although young drivers are often some of the most expensive to insure, you can find ways to save money by choosing companies with low rates, student discounts, and good accident forgiveness policies. While we highly recommend the five insurance providers on this list, it's always worth shopping around to compare rates before you make a long-term commitment to one company.
How We Chose the Best Car Insurance Companies for Teens
When selecting the best car insurance companies for young drivers, we not only considered each company’s financial strength and ratings with companies like J.D. Power, we also looked at rate comparisons and discount offerings listed on insurance provider websites and in independent reviews.