Car insurance for 21-year-olds

How much is car insurance for a 21-year-old?

According to Bankrate’s review of quoted annual premiums, 21-year-old drivers pay an average of $4,500 per year for their own full coverage car insurance policy, which is 68 percent more than the national average rate of $2,671 per year. The average minimum coverage policy for a 21-year-old costs $1,371 per year, which is 70 percent more than the national average of $806 per year.

Drivers who live in the same residence as their parents can be listed as a driver on their parents’ insurance, which can make the overall cost of coverage less expensive. The average annual cost of car insurance for a 21-year-old on their parents’ policy is $3,705 for full coverage and $1,150 for minimum coverage. However, keep in mind that being added to your parents’ policy still causes a significant increase in premium and your driving record will also impact their rates.

The reason why car insurance rates are higher for young adults is because prices are based on risk. If you are 21 years old, you have less driving experience than an older, more experienced driver. To compensate for the increased risk of causing an accident, car insurance companies typically charge a higher rate if you are recently licensed. Generally, your premiums should begin to decrease when you turn 25.

Car insurance rates for 21-year-olds by state

Another factor that can significantly affect car insurance premiums is where you live. For example, in states with a high risk of severe weather or a large number of uninsured drivers, the average cost of car insurance is likely to be more expensive. Rate data shows that Florida has the highest full coverage car insurance rates on average for 21-year-olds on their own policies ($6,139) and Hawaii has the cheapest rates ($1,650). However, if you live in Hawaii or Massachusetts, car insurance companies are not allowed to use age as a rating factor for premiums, which helps explain why average rates are so low in the Aloha State.

The table below highlights the average cost of full coverage car insurance for 21-year-olds in every state. You can also see the state-by-state breakdown of rates for 21-year-olds on their parents’ policy vs. their own policy.

*Age is not a contributing rating factor in Hawaii and Massachusetts due to state regulations.

Cheapest car insurance companies for 21-year-olds

Because car insurance rates tend to be relatively expensive for 21-year-olds, many drivers will want to get a policy from the cheapest car insurance company. Based on our analysis of the average premiums for the largest car insurance companies by market share, several stand out as offering low average rates to 21-year-olds on their own policy and on their parents’ policy.

According to our findings, USAA has one of the cheapest average rates for 21-year-olds, with an average annual full coverage premium of $2,708 for 21-year-old drivers on their own policy. However, USAA is not available to everyone; it is exclusively available to active duty military, veterans and qualifying immediate family members. If you don’t qualify for USAA, Auto-Owners offers the next-cheapest average rates on our list at $2,871 per year. If you decide to remain insured on your parents’ policy, Geico has the cheapest rates, with an average annual full coverage premium of $2,165 per year.

Cheapest car insurance companies for 21-year-olds on their parents’ policy

21 year olds looking to be insured on their parents’ policy can consider getting quotes from the following companies, which offer low average rates:

Cheapest car insurance companies for 21-year-olds on their own policy

If you don't qualify for coverage on your parents' policy, the following carriers offer some of the lowest average rates for 21-year-old drivers on their own policy.

How to save on car insurance for 21-year-olds

Although car insurance is, on average, more expensive for 21-year-olds than it is for older drivers, there are ways you may be able to save.

• Compare quotes: Car insurance companies use unique rating algorithms, meaning that they weigh your individual rating factors differently. Getting quotes from several companies allows you to compare the price for the same type and amount of coverage.
• Take advantage of good student discounts: If you are under 25 years old and are a full-time student, many insurance companies offer a good student discount. The qualifications will vary by company, but most insurers require that you maintain a ‘B’ average or a 3.0 or higher GPA.
• Ask about a distant student discount: If you are a college student who does not take a vehicle with you to campus, you may qualify for a distant student discount. Typically, you have to be at least 100 miles away from home to qualify, but this will vary by insurance carrier.
• Drive an affordable vehicle: The type of car you drive has a huge impact on how much you pay for car insurance. Sports cars, luxury vehicles and vehicles that may be more expensive to repair or replace will generally result in higher premiums. There are some cars that are generally cheaper to insure than others, like the Honda CR-V, Hyundai Tucson and Ford F-150.
• Keep a clean driving record: 21-year-olds can typically expect their average car insurance rates to begin substantially dropping over the next several years as they gain experience and become more mature. However, speeding tickets and traffic accidents on your driving record can prevent you from lowering your risk profile and earning a cheaper premium.
• Improve your driving skills: Many insurers offer a discount to drivers who agree to install a telematics device in their car or use a mobile app to track their driving habits. These programs record information about your driving skills, such as your speed, braking and the time of day you are driving. If you demonstrate safe driving habits, you could get a discount on your premium.

How to get the best car insurance for 21-year-olds

The cheapest car insurance is not necessarily the best car insurance, because every 21-year-old driver has different insurance needs. To find the best coverage for your personal needs, it’s important to determine what you want from a policy. Ask yourself questions like:

• Do you want a company that has a strong mobile app?
• Are you looking for certain coverages, like accident forgiveness?
• What discounts can you qualify for?
• How strict is your budget?

Once you have decided what matters most, you can get quotes from several companies to see which companies best fit your needs. If you are not sure where to start, talking to a licensed agent might help you decide what coverages and options are right for you.

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