The Most Practical and Cost-Effective Car Insurance for Young Adults

n this article, we’ll cover:

1. Car Insurance options
2. Discounts
3. How to save money
4. And more

Quick Car Insurance Q+A 

Looking for a car insurance policy of your very own for the first time? It can be a lot to take in. If you have questions, we have answers -- in fact, we've gathered the answers to questions young adults have about finding a car insurance policy of their very own right here.

1. Who should be on my car insurance?

You should include anyone else who drives your car on a regular basis, or occasionally, on your car insurance (friends, family, partners).

2. When do I need my own auto insurance?

Do your research! Your insurance is based on you and your families’ decisions and what works best financially for you. Unlike life insurance, you could be on your parent’s car insurance indefinitely. 

3. What are deductibles?

A deductible is the amount you pay for vehicle repairs before your insurance policy is enacted. If you should request a higher deductible, that would reduce the amount that you pay in your premium. For example, If you choose a $500 deductible, and you have a covered loss of $1000 damage to your car, you must pay the first $500 out of pocket.

4. How do I start?

First thing’s first: Get a quote. After you have decided on a company, you must provide your driver’s license number (on your driver’s license), the make, model, year, and vehicle identification number (on your ownership or service record documents), and any accidents or tickets on your driving record during the application process. Depending on the company and the availability of your car’s information, you could get your car insurance up and running in as little as a few minutes.

5. Why are auto insurance rates higher for males than females?

On Average, more male drivers under the age of twenty-five are involved in auto accidents than women. In 2020, over double the number of male motor vehicle crash deaths occurred when compared to female motor vehicle crash deaths.

Basic Types of Auto Insurance

Depending on your state requirements and your own personal preference, certain auto insurances are required or recommended. You must choose what’s best for you. Here are a few of the most basic auto insurances available.

1. Liability

Liability insurance pays the amount of other people's expenses after an incident. It is required in almost every state.

2. Collision

This type of coverage pays to repair or replace your car after an accident regardless of the person at fault. Collision coverage is only required for leased or financed cars.

3. Comprehensive

Covering damage to your vehicle caused by something other than an accident, Comprehensive coverage is an important requirement for leased or financed cars.

4. Personal injury protection

This protection plan pays for your direct and indirect medical expenses after an accident and is required in some states.

5. Uninsured/underinsured motorist

This covers vehicle damage and medical expenses after an incident with an uninsured/underinsured driver. It is required in some states.

6. Medical payments

Medical pays for your direct medical expenses after an accident and is required in some states.

Best Auto Insurance for Young Adults

USAA

Established in 1922, USAA insurance is exclusively a military-based insurance company. They offer rates to US military members and veterans, pre-commissioned officers, and spouses and children of USAA policyholders.

Customers save an average of $725 annually when working with USAA for auto insurance. Holding a 4.4 US News rating, USAA is a great option for military families. Customers rave about excellent handling of claims and customer service. Females around the age 25 can expect to pay $1,219 and males, $1,280, which saves around $500 compared to other insurance providers.

With loyal policyholders and well-rated 24/7 service representatives, USAA strives to “empower members to achieve financial security through highly competitive products, exceptional service, and trusted advice for the military community and their families.”

USAA Auto Insurance Coverage

• Pay as You Drive
• Boat
• Motorcycle
• ATV
• RV
• Classic car
• Bike
• Aviation

USAA Discounts

To increase customer savings and company loyalty, USAA offers these opportunities:

• Bundle and save. Bundle auto and property policies with the same company for a small discount.
• ‍Annual mileage and storage discounts. If you don't drive much per year and can put your car in storage, this applies to you.
• ‍Personalized payment plan. You choose your payment due date without added fees.
• ‍Student discount. If a teen maintains good grades in school, you may receive a discount.
• ‍Military On–base discount. If you can garage your car on base, you may be able to save big.
• ‍Automatic payments. Save on your premium amount when you set up an auto payment schedule.
• ‍MyUSAA Legacy Discount. If your parents have a USAA auto policy, you may be able to apply for a discount if you buy insurance from USAA too.
• ‍Multi-vehicle Discount. You could qualify for a multi-vehicle discount if you have multiple vehicles on your insurance.

GEICO

Established 1936, GEICO members can save an annual average of $500 when using auto insurance. With a 4.1 US News rating, females around the age of twenty-five pay around $1356 and males, $1347, which is around $400-$500 less than competitor prices.

Geico Auto Insurance Coverage

• Auto
• Motorcycle
• ATV
• RV
• Boat and PWC
• Collector auto (classic)
• Mexico auto

Geico Discounts

• Bundle and save
• Vehicle discounts. Air bag, anti-theft, new vehicle, etc.
• Driving history and habits. Accident free good driver, seat belt use
• Drivers education. If you take a defensive driving education course, you may be eligible for discounts
• Good student. Good grades pay off!
• Affiliation. US military policyholders, federal employees, military on active duty, retired military, members of national guard or reserves can receive discounts.
• Loyalty. Multi-vehicle, multi-policy holders can earn points (homeowners, renters, condo owners, mobile home owners).

State Farm

Established in 1922, State Farm prides itself on its reliable coverage and customizable, personalized services. On average, you can save $597 annually on auto insurance savings, and even more with multiple policies. Females around the age of twenty five pay around $1381 and males, $1537, which is around $350 cheaper than other average savings rates of competitors.

State Farm Auto Insurance Coverage

Car-specific State Farm Coverage

• Rentals
• Sports cars
• Classic antique
• Commercial auto
• Electric/hybrid

State Farm Discounts

• Drive Safe and Save. You can apply on an app for being a good driver and save big.
• Steer clear. People under 25 without any fault accidents within the past 3 years can receive discounts.
• Teen driver. Good grades earn big saves.
• Bundle home and auto. Homeowners, renters, condo, or life insurance bundled with auto earns savings.

Travelers

Established in 1853, policyholders at Travelers can save an average of $638 annually. Earning a 4.0 US News rating, female policyholders around the age of twenty five pay about $1456 and males, $1512, which is slightly over $300 in savings compared to other insurance companies.

Travelers Auto Insurance Coverage

• Auto
• Boat and yacht
• Travel
• Motorcycle

Travelers Discounts

• Multi policy. Bundle and get a discount.
• Safe driver. If you have no accidents, violations or major comprehensive claims to your household, you can earn savings.
• Good student. If you have good grades, you can earn a discount.
• Roadside assistance
• Home ownership discount
• Loyalty program. Travelers will acknowledge your long-term support and award you with savings.
• Hybrid/electric car discount
• New car discount
• Pay in full. Earn savings if you pay your premium in full.
• Early quote. If you get an auto quote before your current policy expires, you are eligible for a discount.
• Student away at school. If a teen goes to school at least 100 miles away and will not be driving your car, you can save.
• Driver training discount. If you complete a driver education course, you can earn savings.

American Family

Established in 1927, American Family Insurance earned a 4.0 US News rating. Dedicated to “Inspiring, protecting, and restoring your dreams,” their annual savings compared to competitors is $400. Female policyholders around the age of twenty five can expect to pay $1617 and males, $1663, which is less than $200 compared to other average insurance costs.

American Family Discounts

• Safety discounts. Good drivers can earn discounts on premiums.
• Defensive driver. If you complete an approved driver course, you can earn a discount for responsible driving.
• Young drivers
• Student discount. Earning a good GPA and balancing extracurricular activities can get you big savings.
• Away at school. Dependents under twenty five and more than 100 miles away at college who do not drive can save big.
• Young volunteer. If you are under twenty five and complete at least forty hours of volunteer work for a non-profit organization, you can be eligible for discounts.
• Generational. If your parents are American family holders, you can earn discounts because of their loyalty.
• Multi policy milti-car. Bundle home, renter, or life insurance with auto and pay less.
• Autopay and paperless 

How to Save on Car Insurance as a Young Adult

Car Insurance is a makeup of all types of auto coverage you choose in your protection plan. Accidents, tickets, and inflation are all factors of increasing insurance prices, and you may want to find some loopholes to get the same coverage for less using these few tricks.

Gauge Your Deductible

Most insurance companies are flexible in their payment options. Policyholders can increase their deductibles, (what you pay before insurance kicks in) which lowers your premium rate (routine insurance payment over months/years). Some insurance companies award policyholders for increasing their deductibles with discounts. Increasing your deductible can come at a risk, so only increase if you are a very safe, slow driver who doesn’t use their car that much. Careful drivers are at less risk of accidents, so this option is based on your personal experience.

Know the Needs of Your Car

Different cars and their characteristics cause more costly quotes from insurance companies. If your car is costly to repair or is a newer model, insurance companies will have to pay more, so they may up their price drastically. For example, sports cars are built for speed which increases risk of accidents, and sports cars have more costly parts, so insurers would have to pay more, increasing your deductible. Insurance companies like safety features like anti-theft and anti-lock brakes and airbags because they decrease the risk of accidents or theft, so insurers don’t have to pay as much. When choosing the right car, keep in mind that the more costly to repair, the higher the quote.

Bundle and Save

Almost every auto insurance company awards its members for buying multiple insurances with the same company (home, rent, auto, life). Find the most reasonable insurance company for you and figure out what coverage you need– you may be able to save big!

Drive Smart!

Drivers with a DUI on record pay an average of 74% more for their car insurance coverage than people who don’t. Although this one comes as a no-brainer to some, driving carefully, obeying traffic laws, and keeping your car’s needs at the forefront of attention can keep your costs low. 

Think about it this way: You might not want an older dog because you like the speed and excitement of having a puppy. Be mindful that an older dog might need some more medical attention or “repairs” but a puppy requires the most attention, more costly vet appointments (vaccines, surgeries, etc.), and might cause more accidents and chaos, costing you more (adopt more senior dogs!).

That’s it for the Best Car Insurance for Young Adults

When purchasing auto insurance, numerous outside factors will affect the price you pay… but it isn’t as confusing as you expect it to be. Compare your prices with competitors, choose the right car, review your coverage needs, keep a claim-free record, pay your bills on time, and always drive safely.