Finding the cheapest car insurance may seem daunting for new drivers — it’s their first experience with car insurance, terms are unfamiliar, and there are dozens of companies and policy options to choose from. If you’re a teenage or adult new driver, it pays to know which companies offer reasonable rates and beneficial features.
We’ve researched the market to find the best car insurance for new drivers. Besides rates, we also assessed important aspects of choosing an insurer, like its availability, complaint history, customer service track record, discounts and policy offerings.
Our winner selections are based on rates from 158 companies, then an in-depth analysis of 12 leading companies across more than 250 data points. To gather our data, we used information from 12 auto insurance company websites, phone calls to several companies and three different third-party ratings and complaint-index agencies.
Why we picked it
On average, the insurers we surveyed charge a rate of $2,448 per year when adding a 16-year-old driver. Erie beat most competitors by a long shot, with an annual average rate of $1,594.
Along with first accident forgiveness, Erie offers multiple auto insurance discounts, many of which are designed for young drivers. Unmarried drivers under 21 who still live with their parents may qualify for driver training, youthful driver and longevity discounts. College students who move out of their family homes for school and don’t take their vehicles might qualify for a discount while they’re away.
However, unlike many providers, Erie only sells policies in Washington, D.C. and 12 states. If you don’t live in Erie’s coverage area, consider Nationwide. It ranked second in lowest rates and offers car insurance in Washington, D.C. and all states except Alaska, Hawaii, Louisiana and Massachusetts.
- Lowest rates when adding 16-year-old drivers
- Youthful driver discounts
- First accident forgiveness
- Limited availability
- Pay-per-mile not available
Who should use it
If you’re looking for the cheapest rates and multiple discounts for new drivers, and live within its coverage area, Erie might be the best insurer for you.
Best for state availability
Why we picked it
Geico is our top choice for state availability because it offers policies in all 50 states and has the second-highest overall score of insurers with coverage in every state. USAA had the highest overall score, but we didn’t choose it as the category winner because its membership is limited to current and former military members and their spouses and children.
Unlike some major providers, Geico doesn’t offer new car replacement or pay-per-mile options.
- Available in all 50 states and Washington, D.C.
- Good driver and good student discounts
- Accident forgiveness available
- Doesn’t offer new car replacement and pay-per-mile
- Below-average J.D. Power rankings in some regions
Who should use it
Geico is a good choice for new drivers looking for a combination of nationwide availability, affordable premiums and discounts.
Best for new car replacement
Why we picked it
Nationwide’s comprehensive coverage includes new car replacement. Most auto insurance policies only pay the depreciated value of a stolen or totaled vehicle. So, if a storm destroys your 2023 Honda Accord, most policies will only pay its depreciated value (or actual cash value), likely less than it would cost to replace it with a comparable vehicle.
But with new car replacement coverage, the insurer will replace your ride with another 2023 Honda Accord. Keep in mind that Nationwide’s new car replacement coverage only applies to the first two years of a car’s life.
Erie ranked first in this category, but because its auto policies are available in only 12 states, we chose Nationwide, which had the second-best overall score.
Although Nationwide has fewer than expected NAIC complaints for a company of its size, it ranked below average in the J.D. Power 2023 Auto Insurance Study in all regions it was scored in.
- Comprehensive coverage includes new car replacement
- Affordable rates for adding a 16-year-old driver to your policy
- Far fewer complaints than expected for a company of its size
- Second-lowest J.D. Power score of the companies we studied
- Not available in all 50 states
Who should use it
Nationwide is a good option for new drivers who plan on purchasing a new car or a vehicle that’s less than one year old.
Lowest NAIC complaint rate
Why we picked it
Among the insurers we assessed, American Family ranked first for NAIC complaint rates. The company had a significantly lower complaint rate than expected for a company of its size. However, the company sells car insurance in just 19 states. If you don’t live in American Family’s coverage area, Nationwide is a good alternative because it offers policies in 46 states and has an excellent NAIC complaint rate.
American Family scored 0.16 in the NAIC three-year complaint index, compared to the 0.69 average of the companies we researched. The NAIC compiles the index based on complaint information it receives from state departments of insurance.
American Family’s main drawback is its limited availability — the average number of states in which the companies we researched offered policies in was 37.5, or nearly twice as many states as American Family.
- Good overall customer satisfaction rankings
- New car replacement and vanishing deductibles available
- Pay-per-mile available
- Available in only 19 states
Who should use it
Drivers who value a positive customer service experience and parents who want an insurer that’s helpful when making claims and policy changes may want to consider American Family.
Why we picked it
In the J.D. Power 2023 U.S. Auto Insurance Study, USAA earned the highest overall customer satisfaction score in all U.S. regions, averaging 875 out of 1,000. J.D. Power’s score reflects five key customer service areas: billing process and policy information, claims, interaction, policy offerings and price.
Additionally, USAA offers 24/7 online claims support through its website and mobile app. The app has high ratings from Apple users, and enables you to file and manage claims, pay your premium, request roadside assistance and view your coverage and insurance ID card.
However, USAA only sells two optional coverages — rental reimbursement and roadside assistance — and doesn’t offer new car replacement or vanishing deductibles. Additionally, its limited membership means most people can’t get USAA auto policies.
- Excellent customer support
- Top J.D. Power customer service ratings
- Good military discounts
- Limited membership
- Few optional coverages
- Not many discounts for teen drivers
Who should use it
USAA is a great choice for members of the military and their families who value communication, a positive claims experience and competitive premiums.
Best if you need an SR-22
Why we picked it
Nationwide scored highest among companies that offer an SR-22, which is a certificate issued by insurers that proves you have sufficient coverage for your vehicle. Drivers caught driving without insurance, convicted of a DUI, with too many accidents on their record or with unpaid child support often must file an SR-22 certificate. Most states impose the requirement for three years, making insurers like Nationwide a vital link for drivers required to file an SR-22.
Unlike some major carriers, Nationwide does not extend generational or loyalty discounts. Also, Nationwide earned a below-average J.D. Power score.
- Available in most states and Washington, D.C.
- Reasonable rates for adding a 16-year-old driver to your policy
- New car replacement and vanishing deductible options available
- Below average J.D. Power score
- No loyalty discounts
Who should use it
Nationwide is a good choice for drivers who are required to file an SR-22 and need affordable premiums and good discount options.
What car insurance is essential for new drivers?
Most states require all drivers to carry minimum levels of liability car insurance, and some require medical payments or personal injury protection (PIP) coverage. For financed and leased vehicles, lenders typically require collision and comprehensive coverages.
- Bodily injury liability: Pays the medical expenses of another driver and their passengers if you’re at fault for an accident.
- Property damage liability: Helps pay to repair or replace another driver’s automobile, or other type of property, when you’re at fault in a collision.
- Collision: Pays to repair or replace your car following a covered accident.
- Comprehensive: Pays to repair or replace your automobile due to noncollision losses, such as fire, storms or theft.
How does car insurance work for new drivers?
If you’re the parent of a teenager who’s reached driving age, your insurer may allow you to add them to your auto insurance policy. Many providers even allow you to add a dependent teen driver with a learner’s permit to your coverage at no additional charge. However, if they remain on your policy after they receive their driver’s license, your premium likely will increase.
All drivers must carry state-required minimum car insurance coverages, regardless of their driving experience, and requirements vary by state. For example, all Massachusetts drivers must carry at least:
- $20,000 in bodily injury liability coverage per person
- $40,000 in bodily injury liability coverage per accident
- $5,000 in property damage liability coverage
- $8,000 in personal injury protection (PIP) coverage
- Uninsured motorist coverage, which helps pay the medical expenses of you and your passengers if you’re involved in an accident with an uninsured or hit-and-run driver ($20,000 per person, $40,000 per accident).
How much is car insurance for new drivers?
Based on our research, adding a 16-year-old driver (not a driver and an additional vehicle) to a parent’s auto insurance policy costs an average of $2,448 per year among the 12 carriers we researched. But these average rates do not paint a clear picture for teen or adult new drivers. When determining your rate, insurers can use many factors to calculate your rates, such as annual mileage, coverage levels and location.
Other car insurance types to consider for new drivers
New drivers might also consider purchasing optional coverages, which vary by insurer, but may include:
- Gap insurance: If you finance or lease a vehicle and it’s totaled in a covered accident, this protection can pay the difference between the insurance settlement amount and the amount you still owe the lender.
- Rental car reimbursement coverage: If your automobile sustains damage in a covered accident, this coverage can help pay for a rental car or public transportation fares.
- Towing and labor cost coverage: This protection often covers all or part of expenses incurred by basic roadside interruptions such as battery jumpstarts, tire changes and lockouts.
Besides optional coverages, also consider the amount of liability coverage you purchase. For example, Massachusetts requires drivers to carry just $5,000 in property damage liability coverage, which likely won’t cover serious damage to an expensive luxury vehicle.
You may also need to adjust your collision and comprehensive deductibles. Choosing a high deductible can lower your premium, but if you file a claim, you’ll have to pay more out of pocket for repairs. When deciding on a deductible level, consider the amount of money you can pay from your own funds to replace your car.
Why is car insurance for new drivers so expensive?
Typically, teen drivers pay among the highest premiums because, statistically, they have more serious accidents. Motorists aged 16 to 17 pose the highest accident risk, while male drivers aged 16 to 19 pose three times the risk of people aged 20 and older, according to the Insurance Institute for Highway Safety. In 2020, about 2,800 U.S. teenagers died in traffic accidents, while nearly 230,000 sustained injuries and nearly $41 billion in medical costs, according to the Centers for Disease Control and Prevention.
Because they belong to a less risky age group, adult new drivers may receive a better rate than new teenage motorists. Factors such as your location and vehicle type can also have a major impact on your insurance premium.
How to get cheaper car insurance as a new driver
You can take a few steps to get the cheapest car insurance for new drivers. You may qualify for discounts right off the bat or earn eligibility during the life of your policy. Consider the following:
- Shop around: Rates can vary widely by insurer, so request quotes from several providers before purchasing a policy.
- Take a driver safety course: Many insurance companies offer discounts for policyholders who take a defensive driving course. State departments of motor vehicles and departments of insurance often list state-approved in-person and online courses on their websites. Contact your insurance agent to get information about courses approved by the insurer.
- Get good grades: Young drivers may qualify for lower premiums by getting good grades. Some providers offer discounts for high school and young college students.
- Sign up for a telematics program: While not available through all insurance companies, telematics programs monitor your driving habits using a device attached to your car or through a mobile app. If you maintain good driving habits, you might qualify for an insurance discount.
Generally speaking, drivers with a poor credit history, DUIs, accidents, or a history of driving without insurance should be prepared to pay higher rates than drivers with a clean record and good credit history.
How to get car insurance for new drivers who are older
Adult new drivers can purchase auto insurance like more experienced motorists can: by shopping around and applying for a policy. Some insurers allow policyholders who share a vehicle with a domestic partner, sibling or spouse to add the other person to their policies. A provider may also allow roommates to share a policy.
Sharing a single policy enables you to split insurance costs and may qualify you for a multivehicle discount. However, if you’re an experienced driver and add someone to your policy, your rate may increase. Additionally, if they get into an accident and have to file a claim, this could affect your claims record.
To discover the best auto insurers for new drivers, we pulled rates for more than 150 auto insurance companies, then narrowed down our list to the top 12 companies. From there, we analyzed more than 250 data points and generated an overall score based on the following categories and scoring weights (in parentheses):
Annual average rate (35%)
Using data from Quadrant Information Services, we calculated the average rates for 16-year-old drivers across 12 major insurers. We weighted rates higher than all other categories, as it’s a top priority for new drivers since premiums are typically higher than average.
Accident forgiveness (15%)
The chances of a new driver (especially those under 18) getting into an accident are considerably higher than for experienced drivers who are older. Knowing that, we asked each insurer if they offered accident forgiveness, a feature that keeps your premium from going up after your first accident.
State availability (10%)
If a company offers policies in all 50 states, it scored higher than companies that offer policies in fewer states. This category is important because companies like Erie scored well in many categories, but their relevance to you is marginal because, in Erie’s case, policies are available in only 12 states.
CRASH Network grade (10%)
The CRASH Network is a third-party agency that provides yearly grades for auto insurers based on the opinions of body shops that work with insurers to do repairs on cars that have been in accidents. Scoring is based on responses to one question: “How well does this insurer’s claims handling policies, attitude and payment practices ensure quality repairs and customer service for motorists?” A CRASH Network grade is an important metric for new drivers because they’re more likely to get in a wreck.
New car replacement (10%)
New car replacement is a useful feature for new drivers who drive new cars because, in most cases, the coverage replaces your car with the same make and model for the first few years of your coverage. This category is important for new drivers, as their accident rates tend to be higher than experienced drivers.
Vanishing deductible (10%)
A vanishing deductible is a deductible that decreases incrementally each year you don’t get into an accident or get a ticket. These programs can be an incentive for new drivers to avoid dangerous driving.
NAIC index (3%)
The National Association of Insurance Commissioners (NAIC) calculates an index for insurance companies based on the company’s share of premiums and complaints filed with the NAIC. An index of 1.00 indicates the insurer received the expected number of complaints for a company of its size. An index below 1.00 means the company received fewer complaints than expected for a company of its size, and vice versa. We took the average index for each company from the past three years.
J.D. Power score (3%)
J.D. Power scores auto insurance providers based on five factors that are a key part of the customer experience: billing process and policy information, claims, interaction, policy offerings, and price. We include J.D. Power ratings in our scores because they help you gauge what an insurer’s typical customer experience is like.
Usage-based insurance (1.5%)
Usage-based insurance, or UBI, is a type of insurance that charges drivers based on their driving habits. It typically requires that you install a device in your car or use an app while you drive. For new drivers, using UBI can be a motivator to drive safely in exchange for lower rates.
Some insurers offer pay-per-mile, which calculates your premium based on how many miles you drive. New drivers who don’t put many miles on their car each week can benefit from the lower premiums they may get through a pay-per-mile policy.
An SR-22 is a certificate some states may require to show proof that a driver has sufficient coverage for their vehicle. You typically have to obtain one if you’ve been charged with a DUI, caught driving without a license or involved in multiple wrecks. Not every insurance company provides them, which makes it an important factor when considering an insurer.
Who didn’t make the cut
Though 12 companies were in the running to be category winners, only five of them actually won. Companies that didn’t make the cut include Travelers, Farmers, Allstate, State Farm and Progressive. Each of these companies had poor metrics in areas that affected their overall ranking as well as their category scores. For example, State Farm, Allstate and Farmers had incredibly high rates compared to other companies, which pushed their overall scores into the bottom three.
Frequently asked questions (FAQs)
You can stay on your parents’ auto insurance policy as long as you live at their address and drive a car for which they hold the title. Once you move to your own dwelling or buy a new ride that names you as the titleholder, you’ll have to get your own car insurance policy.
Commonly, parents keep their children on their auto insurance policies until they graduate from college. If a child remains in the home after graduation, they can remain on their parents’ policy.
Any newly licensed driver is considered a new driver, regardless of their age. A new driver may pay nonstandard rates until age 25, depending on the insurer.