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Why You Can Trust the MarketWatch Guides Team
Here’s a breakdown of how we reviewed and rated the top auto insurance providers
130
Providers ReviewedOur team looked at over 100 of the top auto insurance providers in the U.S., from national providers like USAA, Travelers and State Farm to regional providers like Erie Insurance.
8,500
Data Points AnalyzedTo properly score each auto insurance provider, we looked at cost data, claims processes, customer review scores, industry standing, available discounts, coverages and add-ons.
800
Research HoursOur team put in the time so you don’t have to, evaluating cost data, reading customer reviews and researching companies to determine the most reliable options for coverage.
8,500
Customers SurveyedWe asked thousands of customers to describe their experience with their auto insurance provider to understand how real customers feel about their insurers.
Learn more about our methodology and editorial guidelines.
How Does Car Insurance Work For New Drivers?
There’s no specific auto insurance policy for new drivers. Each state sets its own minimum auto insurance requirements, and car insurance for new drivers will look the same as any other driver’s policy. While a lack of driving experience doesn’t change how much insurance you need, it will impact the price.
Does a New Driver Need Insurance?
Yes — regardless of your driving experience, you’ll be expected to purchase at least your state’s minimum required coverage, which typically includes bodily injury and property damage liability car insurance. Some states also require uninsured/underinsured motorist coverage and personal injury protection (PIP). Below are the six standard types of car insurance.
The 5 Best Car Insurance Providers for New Drivers
Of the nation’s leading insurance providers, we found that State Farm, USAA, Geico, Erie Insurance and Liberty Mutual offer the best insurance options for new drivers.
#1 State Farm: Best Customer Experience
Better Business Bureau (BBB) Rating: C-
Our Score: 9.4/10
Our top pick for new drivers seeking car insurance, State Farm offers usage-based car insurance options and considerable discounts for students in good academic standing. The company also boasts a highly rated mobile app and an impressive service area spanning almost every state. According to the National Association of Insurance Commissioners (NAIC), it’s the largest auto insurance provider in the United States as of 2023.
Though it’s our top provider, State Farm currently has a low BBB rating. We reached out to the provider for comment. State Farm representative Justin Tomczak responded: “As an organization, we take pride in our customer service. State Farm absolutely values the relationships we have with our customers and we encourage anyone with questions or concerns to reach out to us. They can share any questions with their agent or visit us at StateFarm.com, or call 1-800-STATE-FARM. State Farm insures over 94 million policies for our customers and grew by over 3 million policies last year.”
Why We Like State Farm
- Over 100 years of industry experience
- Outstanding customer service and reviews
- Rates and programs designed for inexperienced drivers
Read about rates, coverage options, and more in our State Farm insurance review.
#2 USAA: Best for Military Members
Better Business Bureau (BBB) Rating: NR
Our Score: 9.2/10
Our second pick for new drivers, USAA provides insurance for active and retired military members and their immediate families. Now the fifth-largest private auto insurance provider in the U.S., USAA offers lower-than-average rates for a wide selection of coverage options, all backed by outstanding customer reviews.
Why We Like USAA
- Affordable coverage rates
- Insurance add-ons available
- Insurance designed for active-duty military, veterans and their families
Our team covers insurance bundle discounts, the SafePilot® program and more in our USAA insurance review.
#3 Geico: Best for Budget-Conscious Drivers
Better Business Bureau (BBB) Rating: A+
Our Score: 9.1/10
As the country’s third-largest auto insurance provider, Geico offers competitively low rates for most new drivers. The company also boasts a straightforward claims process and a user-friendly mobile app. Geico’s DriveEasy program, a usage-based insurance add-on, incentivizes new drivers to maintain a good driving record in exchange for rate discounts.
What We Like Geico
- Easy-to-use mobile app
- Rates lower than the national average
- Usage-based insurance discounts available
Take an in-depth look at insurance options, average rates and other essential considerations in our Geico insurance review.
#4: Erie Insurance: Affordable For Basic Coverage
Better Business Bureau (BBB) Rating: A+
Our Score: 9/10
Though Erie insurance products are only available in 12 states and Washington, D.C., the company has grown into the 13th largest provider of auto insurance in the U.S according to the NAIC. Erie offers a young driver discount, car safety equipment discounts and reduced usage discounts, making it an excellent choice for new drivers in the company’s coverage areas.
Why We Like Erie Insurance
- Strong industry reputation
- Erie Rate Lock® helps prevent rate increases
- Diminishing deductible and a wide range of available discounts
Find customer reviews, coverage availability, and other important information in our Erie insurance review.
#5 Liberty Mutual: Good Programs for Young Drivers
Better Business Bureau (BBB) Rating: A-
Our Score: 9/10
Rounding off our top five insurance providers for new drivers, Liberty Mutual offers discounts for good students and students away from home. The company’s usage-based programs allow young drivers to turn good driving habits into savings, while other coverage options guarantee vehicle repairs.
Why We Like Liberty Mutual
- Large service area
- Wide selection of coverage types and add-ons
- Great discounts for young or inexperienced drivers
You can find our team’s deep dive into customer reviews, coverage types and more in our Liberty Mutual insurance review.
New Driver Car Insurance Cost
As a new driver, there are several factors that can affect the specific car insurance rate you will pay, including your location, vehicle, driving record and credit history. Age and driving experience are two factors that insurers weigh heavily, as they’re key indicators of how likely a driver is to get into an accident.
How Much Is Insurance for a New Driver?
Full Coverage Insurance Rates for New Drivers
Based on full coverage rate estimates, the average cost for new drivers is $4,333 per year or $361 per month. Rates are higher for new drivers, especially teenage and younger drivers, which are highlighted in the table below.
| Age | Monthly Car Insurance Average | Annual Car Insurance Average |
|---|---|---|
| 16 | $576 | $6,912 |
| 17 | $468 | $5,612 |
| 18 | $413 | $4,958 |
| 19 | $309 | $3,708 |
| 21 | $232 | $2,786 |
| 25 | $168 | $2,019 |
Full Coverage Car Insurance Prices for First-Time Drivers
First-time drivers aren’t just teens. In fact, according to the Federal Highway Administration, there were almost 8,000 more licensed drivers between 25 and 29 years old than there were drivers aged 19 and under in 2022.
Below are several popular providers’ average annual costs for full coverage insurance for a 25-year-old with a good credit rating and a good driving record.
| Car Insurance Company | Average Monthly Cost for 25-Year-Old | Average Annual Cost for 25-Year-Old |
|---|---|---|
| Nationwide | $139 | $1,663 |
| Travelers | $141 | $1,694 |
| Erie Insurance | $150 | $1,796 |
| Geico | $151 | $1,807 |
| USAA* | $152 | $1,825 |
| State Farm | $163 | $1,952 |
| American Family | $169 | $2,023 |
| Auto-Owners Insurance | $173 | $2,076 |
| Progressive | $187 | $2,243 |
| Allstate | $247 | $2,958 |
Cheapest Car Insurance for New Drivers
As the table above shows, Nationwide and Travelers tend to provide the cheapest rates for new drivers on average. Rates may vary based on individual drivers’ locations, vehicles and other factors.
Why Is Car Insurance So Expensive for New Drivers?
New drivers can pay as much as $3,000 per year or more for car insurance depending on the company. New drivers are more expensive to insure due to their lack of a driving record. Younger drivers are more likely to be in an accident, which also raises car insurance rates.
Part of the reason insurance companies hike rates for younger drivers is the increased likelihood of an accident. In fact, the Centers for Disease Control and Prevention (CDC) states that drivers between the ages of 16 and 19 are more likely to be in car accidents than any other age group. The CDC also notes that car crashes are the leading cause of death for U.S. teens.
Insurance Quotes for New Drivers
The best way to ensure you get the lowest rates possible as a new driver is by reaching out to multiple providers for car insurance quotes. Car insurance companies review a number of factors when giving estimates for coverage. Some center on the auto policy itself, but many others have to do with a driver’s demographics and driving record.
Here are some of the main factors that may influence car insurance quotes, depending on the state in which you live:
- Age
- Gender
- Marital status
- Location
- Vehicle make, model and mileage
- Credit score
- Driving history
- Coverage limits
How To Save on Car Insurance for New Drivers
There’s no one surefire way to find the best price for auto insurance, but there are a few things you can do to get a lower car insurance premium. We recommend using the following strategies if you’re purchasing car insurance for new drivers.
1. Compare Insurance Companies for New Drivers
No two insurance companies will give you the same price. Taking time to compare car insurance quotes will give you a baseline idea of what you can expect to pay when adding someone to an existing policy — or how much you could save by switching providers.
When you’re deciding between two companies, it may also help to read comparisons like our Allstate vs. Progressive review or State Farm vs. Geico review. These break down each company’s discount offerings and customer reviews side by side.
2. Improve Your Credit Score
Because having a poor credit score can make your rates go up in most states, building good credit before you start driving is a smart way to get cheaper car insurance as a new driver.
Improving your credit can seem like a daunting task, but there are many things you can start doing today to raise your credit score. Here are seven simple steps to start raising your credit so you can get lower rates on your car insurance.
3. Look for New Driver Car Insurance Discounts
Several car insurance companies offer discounts for young drivers and students, but you can save money through other means, too. Bundling policies like homeowners insurance with your auto coverage can lower your premium, so check to see if your insurer offers a multi-policy discount. Here are some common discounts offered by insurance providers:
4. Adjust Your Car Insurance Coverage
If you’re looking to save and have a new driver on the road, adjusting your current auto policy might give you a better rate. Opting for a higher deductible usually leads to lower premiums, but it does mean paying more up front if you file an insurance claim.
Another option is dropping coverage you don’t need. If one of your cars is older and you own it outright, you can likely stop paying for collision insurance and comprehensive coverage. In most states, you’ll still have to pay for liability insurance if you decide to drop the rest of your full coverage policy.
5. Try Usage Based Insurance
Also known as pay-per-mile insurance, usage-based car insurance coverage measures driving behaviors and mileage and uses this data to set rates. By linking the monthly bill to the actual time on the road and good driving habits, usage-based insurance policies usually end up costing customers less than traditional auto insurance, according to the National Association of Insurance Commissioners.
Usage-based policies may not be available in every state. They’re also not a good option if you drive often or have a long commute, and people with poor driving habits may actually see their rates increase.
Tips for First-time Car Insurance Buyers
Though teenage drivers may be the first group to come to mind when thinking of new drivers, there are several types of drivers who are getting their licenses for the first time. Here are some examples of people who could be considered new drivers:
- Teens
- Older individuals without a driving record
- People who immigrate to the U.S.
Because car insurance costs vary from person to person, we have tips for new drivers that are specific to each of these groups. In the sections below, we’ll look at some of the specifics of getting car insurance for each group.
How To Get Cheap Car Insurance for Young Drivers
It can be exciting for a teen to start driving on their own for the first time, but the cost of car insurance for new drivers is typically high. As mentioned, age is one of the main factors insurance companies consider when calculating prices.
Usually, the best way for young drivers to get cheap car insurance is to stay on their parents’ policies. Car insurance companies typically offer families several discounts to save money on insurance coverage, including:
- Safe driving discounts
- Good student discounts (must have B average grades or higher)
- College student and student-away-at-school discounts
- Defensive driving course discounts
Young drivers can’t purchase their own policies unless they own their own cars and no longer have the same permanent address as their parents. Keep in mind that drivers under the age of 25 usually pay much higher rates. Adding a young driver to an insurance policy will still increase your premiums substantially, but the amount will depend on your insurance company, the vehicle and where you live.
How To Get Car Insurance for New Adult Drivers
Teenagers aren’t the only ones driving for the first time. A person of any age who has lived in a large city and primarily relied on public transportation or who hasn’t had the means to purchase a car could also be considered a new driver. Luckily, even though you may not have experience on the road, if you’re over 25, you may see lower rates than a teen driver.
If you’re an older first-time driver and live in an area that has public transit or you don’t plan on driving much, there are alternatives to traditional insurance, like usage-based insurance (which we already discussed above).
Car Insurance for New Immigrants
Immigrants and foreign nationals can be classified as new drivers when they first enter the U.S. This is because auto insurance companies usually check domestic driving records, so you can have a clean driving record in another country and still be considered an inexperienced driver after moving to the U.S.
Being an immigrant can make it harder to purchase car insurance. Many car insurance companies will reject applicants who don’t have valid driver’s licenses. Depending on where you live, you may still be able to get a license if you don’t have the proper government paperwork.
According to the National Conference of State Legislatures, Washington, D.C. and the 19 states below allow undocumented immigrants to obtain driver’s licenses if they can produce items like a foreign birth certificate, valid foreign passport or proof of residency in the state.
| California | Colorado | Connecticut | Delaware | Hawaii |
| Illinois | Maryland | Massachusetts | Minnesota | Nevada |
| New Jersey | New Mexico | New York | Oregon | Rhode Island |
| Utah | Vermont | Virginia | Washington |
Car Insurance for First-time Drivers: The Bottom Line
New drivers can expect to pay significantly more for car insurance than experienced drivers. However, there are ways to keep car insurance costs down by comparing car insurance companies and looking for appropriate discounts.
New Driver Car Insurance: FAQ
Below are frequently asked questions about car insurance for new drivers:
You will be required to carry the state minimum insurance based on where you live. Most states require liability insurance (bodily injury liability and property damage liability) at a minimum. But this will only cover other people and their passengers in accidents that you cause. If you want to protect yourself and your passengers, you may want to consider purchasing a full coverage car insurance policy, which includes liability, collision and comprehensive coverage.
Our picks for the best car insurance for new drivers are Geico and State Farm. Both of these companies offer policyholders ways to save with student discounts and savings for insuring multiple cars.
Car insurance for a new driver can range from about $2,000 per year to $6,000 and above. Depending on the state, costs may depend on the new driver’s vehicle, location, driving record (if any), credit and more.
In most cases, you’ll save money by adding a 16-year-old to your policy rather than paying for a separate policy. Keep in mind that a 16-year-old can only get their own policy if the car is registered in their name. Most states don’t allow minors to register vehicles.
Ways to find affordable auto insurance rates include comparing quotes from providers, looking for discounts and dropping unnecessary coverage. It’s generally best for young drivers to stay on their parents’ policies too.
Older cars with higher mileage are usually less expensive to insure because they have less cash value than newer vehicles. Financing a vehicle typically comes with higher insurance costs, as most lenders will require full coverage.
Other Types Of Insurance To Consider
- Homeowners Insurance
- Renters Insurance
- Travel Insurance
- Pet Insurance
- Boat Insurance
- Home Appliance Insurance
- Dental Insurance
Our Methodology
Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best car insurance companies. We collected data on dozens of auto insurance providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the insurers that scored the most points topping the list.
Here are the factors our ratings take into account:
- Cost: Auto insurance rate estimates generated by Quadrant Information Services and discount opportunities were both taken into consideration.
- Coverage: Companies that offer a variety of choices for insurance coverage are more likely to meet consumer needs.
- Reputation and experience: Our research team considered market share, ratings from industry experts and years in business when giving this score.
- Availability: Auto insurance companies with greater state availability and few eligibility requirements scored highest in this category.
- Customer experience: This score is based on volume of complaints reported by the NAIC and customer satisfaction ratings reported by J.D. Power. We also considered the responsiveness, friendliness and helpfulness of each insurance company’s customer service team based on our own shopper analysis.
Our credentials:
- 800 hours researched
- 45 companies reviewed
- 8,500+ consumers surveyed
*Data accurate at time of publication.
