Best Car Insurance for New Drivers 2024

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Updated: December 20, 2024

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Dec 24, 2024

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MoneyGeek recommends State Farm for new drivers under 21, GEICO for those under 25 and Allstate for new adult drivers.

For new drivers searching for car insurance, the best companies balance affordability and top-tier coverage. They also offer various discounts to cater to all kinds of drivers, ensuring that everyone finds value.

New drivers commonly face higher insurance rates due to their limited experience, which often translates to a perceived increased risk. To secure more budget-friendly rates, new drivers might consider enrolling in defensive driving courses, opting for safer vehicle models and bundling insurance products.

Key Takeaways

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GEICO stands out for offering affordable full coverage car insurance with high customer satisfaction, boasting a MoneyGeek score of 86 out of 100 and an annual premium of $1,571, making it an excellent choice for young drivers under 25.

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USAA is the top choice for military members seeking full coverage car insurance, noted for its high MoneyGeek score and exceptional suitability for the military community.

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Top insurers for minimum coverage for new drivers under 25 include State Farm, GEICO, and Allstate, with MoneyGeek scores of 85 to 97 and annual premiums ranging from $1,571 to $2,977, balancing affordability and coverage with various discounts.

Key Takeaways

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State Farm, GEICO and Allstate are the best insurers for new drivers.

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Choosing the best insurance involves considerations like the vehicle's value, geographical risks based on location, budget constraints and the driver's risk preference.

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Car insurance rates are typically higher for new drivers due to their inexperience and higher perceived risk. To find affordable rates, drivers should consider taking defensive driving courses, opting for safer vehicles, maximizing discounts, limiting add-ons, bundling insurance and annually reviewing rates.

Why Trust MoneyGeek? We ensure that MoneyGeek's content meets our highest editorial standards by carefully scrutinizing it. Throughout each stage, our team writes, checks facts, edits and reviews the content produced to generate accurate information.

Best Car Insurance for New Drivers Under 21

For 20-year-old drivers taking the wheel for the first time, the top insurance providers are:

  • State Farm: MoneyGeek score of 85 out of 100 ($2,272 annually for full coverage)
  • Travelers: MoneyGeek score of 85 out of 100 ($2,272 annually for full coverage)

Car insurance for new drivers is more expensive than for other demographics, but it provides crucial financial protection in the event of damage or injury. Leading car insurance companies offer various discounts to help drivers save.

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MoneyGeek Top Pick
State Farm

State Farm provides the most affordable insurance for drivers under 21 who are new to driving. It offers a wide range of discounts that help reduce the cost of insuring young, newly licensed drivers. Among its competitors, State Farm ranks highest in customer satisfaction. It includes standard coverages such as rideshare insurance and emergency roadside assistance but doesn't offer unique features like accident forgiveness or new car replacement.

Based on our analysis, we found that State Farm offers the best car insurance for young drivers.

To find the best insurance provider for your age group, toggle the age and coverage filters in the table below.

Data filtered by:Results filtered by:
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Age:16
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Coverage:100/300/100 w/ $1000 Deductible
State Farm87$3,732$311
Travelers85$5,622$469
GEICO85$5,463$455
Nationwide84$5,108$426
Allstate82$6,583$549
Progressive81$7,481$623
Farmers79$8,864$739
HOW CAN A 20-YEAR-OLD DRIVER SAVE ON INSURANCE?

For new drivers, joining a family policy can offer savings. Insurance companies often give discounts for multiple drivers, allowing new drivers to benefit from the family's established insurance history. As they gain experience and a clean record, they can later opt for an individual policy. Until then, a family policy is a smart financial choice for beginners on the road.

Best Car Insurance for New Drivers Under 25

GEICO and State Farm offer the best insurance for newly licensed 24-year-old drivers:

  • GEICO: MoneyGeek score of 86 out of 100 ($1,571 annually for full coverage)
  • State Farm: MoneyGeek score of 85 out of 100 ($1,724 annually for full coverage)

Both GEICO and State Farm consistently offer great deals for young drivers.

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MoneyGeek Top Pick
GEICO

GEICO stands out with a vast array of car insurance discounts compared to its competitors. It rewards safe driving, features anti-theft discounts and offers further discounts for members of certain organizations. While GEICO doesn't provide rideshare insurance, it has various valuable coverages: accident forgiveness, gap insurance (often needed for leased or financed cars), roadside assistance and mechanical breakdown insurance.

MoneyGeek's review of GEICO reveals it as a top choice for a wide range of drivers, from frequent road users to senior drivers.

To find the ideal insurance provider for new drivers under 25, adjust the filters in the table below based on your age and preferred coverage options.

Data filtered by:Results filtered by:
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Age:24
Select
Coverage:100/300/100 w/ $1000 Deductible
GEICO86$1,571$131
State Farm85$1,724$144
Travelers85$1,851$154
Progressive83$1,951$163
Nationwide83$1,902$159
Allstate83$1,861$155
Farmers81$2,265$189

If you've moved out for college yet still use the family home as your primary address, many car insurance companies offer "student away from home" discounts. However, if you've permanently moved out or purchased a car titled in your name, you need to get your own car insurance policy.

HOW CAN A 24-YEAR-OLD DRIVER SAVE ON INSURANCE?

For a 24-year-old newly licensed driver looking to save on insurance, it's wise to opt for a modest car that's generally affordable to repair; these vehicles typically come with lower insurance premiums. Moreover, if you can limit your driving, you may qualify for low-mileage discounts that many insurers provide. If you're still in school or have recently graduated, look for insurance companies that offer student discounts or special rates for association or alumni members.

Best Car Insurance for New Adult Drivers

For those who have chosen to start driving later in life, you can find the best policies from Allstate and State Farm:

  • Allstate: MoneyGeek score of 97 out of 100 ($2,790 for full coverage)
  • State Farm: MoneyGeek score of 97 out of 100 ($2,977 for full coverage)

Selecting the right car insurance is a crucial step for new drivers, as it not only meets legal requirements but also provides financial protection in case of accidents.

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MoneyGeek Top Pick
Allstate

Allstate consistently ranks higher than its competitors when it comes to affordability and coverage options. Not only does it excel in offering standard car insurance discounts and coverages, but it also provides unique savings opportunities such as the new car discount, early signing bonus and responsible payer discount. While it may not have some of the more niche coverage options, it makes up for it with offerings like accident forgiveness. Overall, Allstate offers moderate pricing, ensuring fair rates for all drivers.

Nationwide97$2,138$178
Travelers97$3,351$279
State Farm97$2,977$248
Allstate97$2,790$233
GEICO96$3,195$266
Progressive96$4,110$343
Farmers95$5,412$451

Why Car Insurance Is Expensive for New Drivers

Car insurance is often more expensive for new drivers due to their lack of driving experience. Without a track record of safe driving to go off of, insurers find it hard to assess their risk. Data consistently shows that new and younger drivers are more likely to be involved in accidents. When these drivers are involved in accidents, their limited experience can lead to more severe and expensive claims.

WHY YOU SHOULD SHOP FOR INSURANCE YEARLY

Car insurance companies don't disclose their pricing methods, making it challenging to pinpoint how to reduce costs. However, a practical approach is to shop around for new coverage annually. As your driving experience increases and your circumstances change, your rates may decrease, so comparing offers can ensure you get the best deal.

Using car insurance calculators can streamline your search among insurance providers, offering quick and effective comparisons. MoneyGeek's auto insurance calculator lets you shop anonymously, tailoring results to your state and unique driver profile, ensuring you find the best fit for your needs.

How to Choose the Best Insurance for New Drivers

Choosing car insurance involves understanding your car's value, location and financing. Finding the best deal is also about finding ways to save without cutting corners on coverage. To save without sacrificing coverage, consider an insurer's service and reliability.

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CHOOSING THE BEST CAR INSURANCE

When looking for the best insurance, you need to know:

How to Choose Your Coverage

Every driver must meet their state's minimum car insurance requirements. However, factors like your car's value, where you live and whether you're leasing or financing dictate the need for more extensive coverage.

If you're financing or leasing, you'll typically need full coverage — which includes liability, collision and comprehensive insurance — and often, gap insurance, too.

Common Car Insurance Coverage Options
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    Liability Coverage

    Liability coverage is a legal requirement in most states. This coverage protects against the costs of damage and injuries you might cause to others in an accident. As a new driver, you might be more prone to small mistakes on the road. While the state will have a minimum requirement, consider going a bit above the minimum, especially if you drive frequently or in high-traffic areas.

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    Collision Coverage

    If you have a newer car or one in good condition, collision coverage is advisable. It covers the cost of repairing or replacing your car if it's involved in an accident. Since new drivers are statistically more prone to minor accidents, this coverage can shield you from out-of-budget expenses.

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    Comprehensive Coverage

    Think about where you park your car and the areas you frequently drive in. If you're concerned about risks like theft, vandalism, fires or natural events like storms damaging your car, comprehensive coverage is for you. It's especially recommended if you park on the street or in places with a higher risk of these events.

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    Gap Insurance

    New drivers who've financed or leased their cars typically need gap insurance on top of full coverage. However, if you own your car outright, you usually don't need gap insurance.

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    Uninsured/Underinsured Motorist Coverage

    In tort or at-fault states, the driver responsible for the accident covers bodily injury or property damage. Without uninsured/underinsured motorist coverage, you risk paying out-of-pocket for car repairs or medical bills if the at-fault driver lacks adequate insurance.

How to Lower Insurance Costs as a New Driver

Although auto insurance for new drivers tends to be pricey, there are several ways new drivers can lower their insurance costs:

How to Get More Affordable Insurance

 
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Take a defensive driving course

Completing a defensive driving course can offer immediate savings. Insurers often view these courses as proof you're committed to safe driving.

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Choose a safer car

Insurers often have lists of cars that are cheaper to insure due to their safety features and low repair costs. Picking one can lead to lower premiums. MoneyGeek found that the Honda CR-V is the cheapest car to insure.

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Increase deductible

Opting for a higher car insurance deductible can reduce your monthly premiums. However, ensure you can afford the deductible amount in case of a claim.

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Limit unnecessary add-ons

While additional coverage can be beneficial, evaluate what you truly need, especially if driving an older car.

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Take advantage of discounts

Young new drivers may qualify for student discounts if they're still in school. Additionally, drivers of all ages can benefit from pay-in-full discounts, going paperless with their billing or opting for multi-car policies.

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Bundle insurance

If you have other insurance policies, like renters or homeowners, bundling them with your car insurance can offer savings. The best home and auto bundle can streamline your insurance needs and offer great discounts.

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Limit mileage

Some insurers offer discounts for driving fewer miles. If you're an occasional driver, this can be beneficial.

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Review and shop around annually

Prices and offers change. Make it a habit to shop around and compare rates at least once a year to ensure you're getting the best deal.

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Telematics or usage-based insurance

Some insurance companies offer policies based on your driving behavior. They use a device to monitor your driving habits, rewarding safe drivers with discounts.

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Avoid traffic violations

Even a minor traffic ticket can increase your rates, especially as a new driver. Adhering to traffic rules is not only safe but cost-effective.

Maintaining a clean driving record and improving your credit score can lead to lower insurance premiums over time. While these factors will gradually reduce your costs, being proactive in researching and comparing policies can help you secure the best coverage at an optimal price from the get go.

How to Find the Best Insurer

Selecting the right car insurance requires more than a glance at prices. Consider factors like your vehicle's value, where you live, your budget, risk preferences and the insurance company's reputation.

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    Your vehicle's value

    If you drive a newer or high-value vehicle, basic liability might not cover you adequately. Consider collision and comprehensive coverages for potential repair or replacement costs.

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    Your location

    Your location determines your risks. If you live in an area prone to theft or vandalism, you should prioritize comprehensive coverage. If you navigate through busy urban zones, you'll need increased liability and collision coverage. And if your state reports a high number of uninsured drivers, think about adding uninsured/underinsured motorist coverage.

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    Your budget

    Balance is key. Aim for a coverage level that aligns with your budget, but remember that premium coverages can save you from considerable costs after an incident.

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    Your risk preference

    Everyone has a different risk tolerance. Some are content with basic coverage, even if it means potential out-of-pocket costs later. If you prefer robust protection without a high premium, a 100/300/100 policy with a larger deductible offers a good balance. This approach provides strong coverage for unforeseen events without a significant monthly cost.

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    Your insurance company

    Don't focus solely on cost. Investigate customer reviews, check the insurer's claim response time and ensure they have strong financial footing. The best insurers balance affordability with quality service.
    To guide you, MoneyGeek's scores incorporate pricing, claim handling efficiency, discount availability, customer satisfaction and financial stability. We’ve done the legwork to help you find the best car insurance company for your particular situation.

FAQ About Car Insurance for New Drivers

MoneyGeek answered commonly asked questions about car insurance for new drivers, offering straightforward answers to help you find the best insurance options to suit your needs.

Why is car insurance typically more expensive for new drivers?

What factors should new drivers consider when choosing car insurance?

How can new drivers lower their insurance costs?

What types of coverages are recommended for new drivers?

About Mark Fitzpatrick

Mark Fitzpatrick headshot

Mark Fitzpatrick is a Licensed Property and Casualty Insurance Producer and MoneyGeek's Head of Insurance. He has analyzed the insurance market for over five years, conducting original research and creating personalized content for every kind of buyer. He has been quoted in several insurance-related publications, including CNBC, NBC News and Mashable.

Fitzpatrick earned a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He is passionate about using his knowledge of economics and insurance to bring transparency around financial topics and help others feel confident in their money moves.

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