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Cheap Insurance Rates For Young Drivers

Best Cheap Car Insurance in California for 2018

If you’re looking for cheap car insurance in California, getting the best deal may require some patience. Rates can vary from one company to the next, so it pays to compare as many estimates as possible.

To make things easier, NerdWallet has done the heavy lifting for you. We researched rates from the largest insurers in the Golden State and found the cheapest options for several common driver types.

Included in this page are the cheapest rates for:

ALSO IN THIS ARTICLE

Cheapest for good drivers

For drivers with no at-fault accidents, DUIs or moving violations.

Esurance returned the cheapest rates for this group in our test, at roughly $105 a month, followed by Mercury and Geico.

If you have no violations or crashes on your record, look into discounts companies offer that reward your responsible driving. These sorts of perks could determine which insurer is ultimately cheapest for you.

Cheapest for young drivers

For drivers in their early 20s.

Drivers in their early 20s often need less coverage than older motorists who have families and greater savings to protect. For this reason, we ran rates for young motorists carrying the minimum required coverage in California.

Geico delivered the lowest sample quote in our results for young drivers in the general population, about $44 per month.

Cheapest for drivers with one at-fault crash

Causing an accident in California can add a significant amount to your premium. The lowest average quote for this category was over $500 more per year than the cheapest estimate for a driver of the same age with a clean record.

Esurance was the best choice for non-military-affiliated drivers in our analysis, with Mercury and Auto Club (AAA) rounding out the three cheapest options.

Cheapest for retired drivers

For drivers in their mid- to late 60s who no longer use their car for commuting.

Given their reduced annual mileage, retired drivers can find relatively cheap car insurance in California compared to drivers with a daily comute. 21st Century delivered the best rates in our analysis, at roughly $84 per month, with Mercury and Esurance not far behind.

To save even more, retirees should look into discounts aimed at mature or retired drivers age 55 or older.

Cheapest for low-mileage drivers

For drivers who travel 5,000 miles or less per year.

Metromile targets drivers who put relatively few miles on their cars; its rates are frequently superior for those who drive under 5,000 miles annually. And other insurers offer per-mile insurance rates, where your bill could change monthly based on miles driven.

Cheapest for drivers with a military connection

If you’re an active member of the military or a veteran — or have an immediate family member who is — chances are you’ll get a relatively cheap rate with USAA, a company that isn’t available to the general public.

USAA was the cheapest auto insurance option for every driver type listed above except retired drivers. USAA customers also benefit from the insurer’s top-rated customer service.

Minimum required car insurance in California

California drivers must carry liability insurance in the following amounts:

  • $15,000 bodily injury liability per person.
  • $30,000 bodily injury liability per accident.
  • $5,000 property damage liability per accident.

Liability coverage helps pay for other people’s injury or property damage bills if you cause the accident. Experts recommend getting more than the bare minimum if you want to avoid dipping into your own savings to cover expenses.

For instance, California has a relatively low property damage minimum, only $5,000. If you cause an accident and total another driver’s car, the damage could easily exceed that amount, and you’d have to pay the difference out of pocket.

Check out NerdWallet’s guide to state car insurance requirements for more details on how the required and optional parts of your California policy work.
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Alternative car insurance in California

If you have a high number of accidents, DUIs or other factors making it hard to find auto coverage on the voluntary market, you might qualify for insurance through the California Automobile Assigned Risk Plan. This organization connects high-risk drivers to insurance companies that will cover them.

For more help finding the most competitive prices in California, try NerdWallet’s car insurance comparison tool.

Here’s a summary of where you’ll find the cheapest insurance, by category:

Car insurance for young drivers

Starting to drive is an exciting moment for teens, but for their parents, it can be stressful and it will certainly be expensive. The good news is that you can check quotes from different insurance companies and minimize the damage to your wallet. Let us guide you through buying car insurance for young drivers to help you save money.

Before your teen starts driving, you should know:

  • All drivers in a household need to be added to a car insurance policy. There is no easy or cheap way to get around car insurance for a new driver. Either you need to add your teen to your policy, or the teen needs his own policy.
  • Sharing a joint policy with a teen is cheaper than paying for separate policies. Additionally, there is no benefit to a teen getting his own policy. This doesn’t mean, however, that you should simply add your teen to your current policy and be done with it. Adding a new driver means your company generates your rates all over again, and a different company may give you a better deal. Shop around by getting quotes from several companies.

Do I have to add my teen once he has a learner’s permit?

The process of insuring a new driver typically starts when the teen gets a learner’s permit. Once teens get a learner’s permit (aka provisional license or instruction permit in some states), some companies allow you to add them to your policy at no additional charge until they get their licenses or turn 18. They allow this because state permit-holder laws require a licensed driver age 21 or older in the passenger seat, making the young driver less of a risk. Other auto insurance providers require that teens be added when they are in the permit stage, so check with your provider.

Do I have to add my teen to my policy if he doesn’t own a car?

Yes. It doesn’t matter that he doesn’t have his own car; he has access to yours. If you don’t add him to your policy and he is in an accident, your policy may not cover him. Some car insurance companies explicitly note in their policies that unless you notify them of additional drivers or risks, those individuals will not be covered. If they do cover the accident, the insurer may require you to pay back premiums from the time the teen was licensed.

If your teen is getting a license but isn’t going to drive your cars — ever — then in some states, some insurers will let you exclude the teen from your policy. If you do exclude a teen, or anyone, from your policy, there will be no car insurance coverage extended if they are in an accident. Many insurance companies want you to tell them about household residents who are over a certain age (usually 15) whether that person is licensed or not.

Do I have to tell my insurance company about my teen if he isn’t licensed?

Yes, you usually do. When you renew your policy, you are usually asked for information on everyone in your household. If your child hasn’t received a permit or license yet, the teen usually can be listed as unlicensed on your policy. When a young driver is noted as unlicensed, he also should be unrated by the car insurance company, meaning the teen wouldn’t affect your rates.

Who should insure a teen if the parents are divorced?

In general, the custodial parent’s policy is primary for the newly licensed driver. However, if the child will drive when staying at the second home, both parents typically need to list the teen as a driver. Car insurance companies deal with this situation differently, so check with your company and ask what your new rates will be. This way you’ll know what to shoot for if you decide to shop around for a better deal.

How can a teen get his own policy?

A teen driver can get a car insurance policy of his own, but if he’s under 18, a parent or guardian signature is required on the policy since insurance is a legal contract. Even if you are willing to sign on the policy with a young driver, keep in mind that it’s cheaper if the teen is added to your policy instead. Read our age-specific guides for teen drivers to see how rates differ depending on whether the teen is on his own policy or the parent;s:

How much does car insurance for new drivers cost?

Our analysis of the cost of adding a teen driver showed an average increase of 160% when a married couple added a teenage boy to their car insurance policy. This number can only be used to give you a very general sense of how much your rates will increase. Every situation is different, and rates depend on your insurance provider, coverage options, ZIP code, vehicles, driving records, how much you drive and many more factors.

Why is car insurance for young drivers so expensive?

Teens are inexperienced behind the wheel and immature by nature. That’s a bad combination. A brand-new driver is 12 times more likely to have an accident than someone with a year of experience, says the National Institutes of Health. A 16-year-old who’s had one accident is 50 percent more likely to have another, says the National Highway Transportation Safety Administration. In addition, maturity levels change quickly. Teens who get their licenses at age 18 have fewer fatal accidents than those who are licensed at age 16. Many insurers no longer lump all young drivers together but instead rate age groups separately.

At what age do young drivers’ rates go down?

The age of 25 is typically when insurance companies begin to offer the same rates they do to all other adults. Some carriers will lower rates for women when they turn 21 and men when they turn 24. Once you’re no longer priced as a “young driver,” your insurance provider will rate you based on your driving record rather than those for young drivers in general. In addition to rating drivers based on age, insurers can also levy a surcharge for inexperience, usually for those who have been licensed less than a year. To get a better sense of how insurance rates change by age, see average insurance rates by age.

Good student discount

Encourage your kid to do well in school because student car insurance discounts can help bring down your rates. Each insurer has its own guidelines, but typically the discount can be 10 percent to 15 percent. Each insurer always has its own rule for what constitutes a “good student” – either a 3.0 grade point average or above, placement on dean’s list or honor roll, or ranking in the top 20 percent of the class.

Safe driver discount

Look into discounts for new drivers who take a safe-driver course, sometimes sponsored by the insurance company. This may mean attending an actual classroom driver’s education class, watching a driving video, or passing a written driving safety test. Your company may also offer discounts if the teen drives with devices that monitor driver behavior.

Cars for Teen Drivers

Given the cost of car insurance for your teen, you may want him driving a car this is cheap to buy and cheap to insure. Check out our list of the 20 best used cars for teens.

The least expensive cars to buy aren’t always the least expensive to insure. Some cars cost more to repair after an accident, and some have a record of more injury claims than others do. And the least expensive car to insure may not be the safest. Electronic equipment such as stability control and antilock brakes can help novice drivers avoid accidents, and there can be a discount for having them. The lowest car insurance rates are often given to drivers with minivans and small SUVs.

Insurance for College Students

When a teen moves out to go to college, you’ve got another car insurance decision to make, based on whether the teen owns a car, how far he moves, if he’s going to drive a family car while in town, etc. Read our guide to car insurance for college students to get guidance for your unique case.

Buying cheap car insurance for teens: 6 essential tips

As the parent or guardian of a young driver, you know it’s essential to have good car insurance to protect them. Whether you’re paying for it or they’re working hard to foot the bill, it’s a new expense for your family. Fortunately, you can find cheap car insurance for teens without breaking the bank. Here are the six ways to lower the cost of a young driver on your policy:

1. Learn about Good Student discounts

Students with higher grade point averages are usually more responsible and better drivers. If your young driver earns a B average or better at school, you may qualify for a good student discount on Nationwide teen car insurance.

2. Install anti-theft devices

You may save when you install an anti-theft device in the vehicle. Your possible discount varies based on the type of device installed and the state in which the vehicle is garaged.

3. Keep rates low for teen car insurance with Accident Forgiveness

Accidents happen to even the best young drivers. And if one does occur, insurance rates may rise as much as 30%. If you have Nationwide’s Accident Forgiveness as part of your teen car insurance package, your rates will not increase following the first at-fault automobile accident.

4. Take a defensive driving class

When your teen successfully completes an approved motor vehicle accident prevention course, this Nationwide discount may help you get affordable car insurance.

5. Choose the right teen car insurance policy for your needs

With Nationwide, there are lots of ways to protect your teen while staying within your budget. For example, a higher auto insurance deductible may lower the rate, but could mean more out-of-pocket expenses after an accident. If the vehicle is older or has very high mileage, liability coverage may be a better option than collision or comprehensive – though it will not cover damages to the car after an at-fault accident. Getting the right coverage that best fits your needs is important for saving money on your teen auto policy. Learn more about Nationwide’s auto insurance coverage types today.

6. Stay safe with teen driving tips

One of the most reliable ways to keep insurance costs low is to avoid accidents. Learn about the risks teen drivers face and get tips for how to prevent them. Nationwide’s teen driving resource center offers practical information about teen decision making, distracted driving, the role of parents in teen driving and more.

Insurance terms, definitions and explanations are intended for informational purposes only and do not in any way replace or modify the definitions and information contained in individual insurance contracts, policies or declaration pages, which control coverage determinations. Such terms may vary by state, and exclusions may apply. Discounts may not be applied to all policy coverages.

Car insurance for teens

When it comes to teen drivers and car insurance, things get confusing – and expensive – very quickly. A parent adding a male teen to their policy can expect their new rate to run as high as $6,186, and in some cases 227% higher than insuring an adult driver alone, and a teen buying their own policy can be even more expensive. Let us guide you through this decision – discounts, options, special circumstances – so you find the best teen car insurance.

Even though the right answer is usually to add them onto your policy to mitigate some of the cost, there are other options and discounts that can save you money. We did as much of the legwork as possible for you, hunting down discounts and reading the fine print. In the end, you’ll need to compare auto insurance quotes using our quote comparison tool to see which company is best for you.

To start at the beginning, simply scroll down. You can also jump directly to your unique situation:

Getting Started: An Easy Primer

  1. Know your timing. Chances are excellent your existing car insurance company will contact you proactively. How do they know? Easy – they probably asked you for the names and birthdays of all the children in your home when you first signed up for your policy. So, if your teenager is 16 or 17 now, they know all about it. If you don’t get the call, it makes sense to alert your carrier once your teen gets a learner’s permit to talk through your options and to give yourself time to compare car insurance companies. In general, permitted drivers are automatically covered as a part of the parent or guardian’s policy with no action needed on your part, but when they do have a true driver’s license, even provisional, they will need to be on your policy or get their own.
  2. Get ready to compare quotes. Our research shows that insurance companies all across the U.S. (except Hawaii) use age and experience as a rating factor. It’s a fascinating point of difference. In our studies, adding a teen raises your costs anywhere from 100% to more than 200%. However, the rates insurance companies will charge you for adding a teen varies widely, as show in the California Adding A Teen To Your Policy table below. Also,
  3. Understand available discounts. When you add a teenager to your car insurance policy or they get their own, car insurance companies don’t actively communicate what discounts are available to you. Use our discount guide below so you’re not in the dark.

Adding a teenager to your car insurance policy

Adding a teen to your policy is the cheapest way to get your teen insured. It still comes with quite a hefty cost, but you can certainly save if you choose the best car insurance companies for teens. We can help.

How much will adding a teen to my car insurance cost me?

Let’s get down to numbers. Every situation is different, but to get a solid snapshot we compared rates in 10 zip codes in each state. The family profile we used owned a 2014 Honda Accord driven by a 40-year old man buying full coverage. Then we added a 16-year old teen to the policy. Here’s what happened:

  • The average household’s car insurance bill rose 152%.
  • A teenage boy was more expensive. The average bill rose 176%, compared with 129% for teenage girls.
  • California rates rose the most, more than 200%.

The reason behind the hikes: Teens crash at a much higher rate than older drivers – the risk is four times as much. According to the federal Centers for Disease Control and Prevention, the worst age for accidents is 16. They have a crash rate twice as high as drivers that are 18- and 19- years old.

Costs also vary widely by insurance company, which is the reason we suggest shopping for car insurance. It’s easy to switch car insurance companies, and we’ll provide you the guidance to switch, cancel, and save.

California Adding A Teen To Your Policy Rates by Company

The table shows how much your annual rates will increase when you add a 16-year-old teen.

If you’ve seen enough and are ready to start comparing quotes for teens, dive into our quote comparison tool and see free online quotes from multiple companies within 10 minutes. Start Now

How to add a teen to your policy

If your choosing a new car insurance company after shopping, you should have already added the teen to the policy when first signing up. If you want to add a teen to your current or new policy, follow these steps:

  1. Call your car insurance company, if they have not already contacted you.
  2. Talk through the changes to your policy in detail, minimum and maximum coverage and insist on hearing the ins and outs of each and every discount. These can add up to considerable savings. If you are also adding an additional car, be sure to ask about a multi-car discount.
  3. Have ready your teen’s driver’s license information and information about any new vehicles.
  4. Take the time you need to decide. Just make sure your teen isn’t driving on a full license without being formally added to your policy or their own. That would be risky.

If my teen gets a ticket, will it raise my rates?

Yes. Once together on the same policy, all driving records – including your teen’s – affect premiums, for better or worse. You share in the discounts, and you shall also share in the risk. To understand how a moving violation will affect your rates, we ran a study and found that the additional cost could run from 5% to as high as 20%.

Teen buying their own policy

Can a teen buy their own insurance? Yes. Companies will sell directly to teens, but state laws vary when it comes to a teen’s ability to sign for insurance – meaning a parent may have to co-sign – and it’s rarely cheaper. In fact, your teen will likely have a higher premium compared to adding a teen to a parent or guardian policy.

But, there are cases where it might make sense for a teen to have their own policy. Progressive cites two:

  • You have a luxury sports car. On a single plan, all drivers, including the teen, are insured against all cars.
  • The teen is eager to be financially independent.

Car insurance is different for a first-time car insurance buyer, but it’s a great time to start a relationship with an insurance provider.

How much is car insurance for teens?

Like we’ve said, teen car insurance is expensive. The younger the driver, the more expensive the car insurance. Young drivers are far more likely to get into car accidents than older drivers. The risk is highest with 16-year-olds, who have a crash rate twice as high as 18- and 19-year-olds. That risk is reflected in the average car insurance rates for teenagers (multiple ages shown for easy comparison):

  • 16-year-old – $3,989
  • 17-year-old – $3,522
  • 18-year-old – $3,148
  • 19-year-old – $2,178
  • 20-year-old – $1,945

Rates not only depend on age, but the company you choose. This table shows the annual rate a teen will receive in California.

Note: the specific company names were not mentioned next to the rates but the companies we’re showing rates for are, in no particular order: GEICO, Farmers, State Farm, Progressive, Mercury, and AAA.

You’ll notice that companies offer widely different rates. Use our quote comparison tool to receive side-by-side quotes from top insurance carriers in only 10 minutes. Get Started

Discounts for teen drivers

We’ve identified the best discounts for teen drivers to get affordable car insurance, nine to be exact. Most car insurance companies won’t reach out to you with discounts, so you must be proactive. Ask and ask again, insisting on as many discounts as you possibly qualify. Discounts can only be stacked up to a certain point though.

  1. Good student discount. A popular discount is tied to doing well in school. This usually translates as a “B” average (3.0 grade point average) or higher. Age limits do exist; typically, the student must be under the age of 25. How much will you save? A recent study by Consumer Reports good student discount averages $263 a year. Liberty Mutual says its Good Student Discount could mean anywhere from 15% to 35% off. Data collected for Insurance.com by Quadrant Information Services shows that the nationwide good student discount is around 12%.
  2. Defensive driving discount. You can take extra driver education or a defensive driving course. This means go above and beyond the minimum state-mandated drivers’ education and training. In some states, discounts can run from 10% to 15% for taking a state-approved driver improvement class. Online classes are a convenient option, but check with your carrier first to make sure it will lead to a discount.
  3. Student “away” discount. Most car insurance companies offer a student “away” discount for students who are away at college or living away from home during high school. You could receive a discount around 5% to 10% of the student’s premium, but some insurers advertise up the 30% off.
  4. Raise your deductible. A common way to lower car insurance premiums is to raise your deductible, but weigh against the fact that young drivers are more likely to get into accidents. When you get into an at-fault accident, you have to pay the deductible amount. Increasing your deductible from $500 to $1,000 will reduce your annual premium by by approximately $400. You can also drop comprehensive and collision coverage if the car is not finance. Use our auto insurance coverage calculator to find out what coverage people “like you” have.
  5. Skip the red Mustang. Car insurance rates vary widely by type of car. A car with a high safety rating will be cheaper to insure. Use Insure.com’s list of 2017 car models to find the cheapest cars to insure. This mostly has to do with the cost of the car, how easy it is to repair, and claim records. Jeeps are the least expensive to insure.
  6. Good driver discount. Keep a clean record and you can receive a discount. This means don’t get into any accidents or violations.
  7. Look for unrelated discounts. Review discounts unrelated to teen like a multiple vehicle discount and a home and auto bundle discount for additional savings.
  8. Low mileage discounts. Pay-as-you-drive pay-per-mile insurance can offer a significant discount. Several car insurance companies offer discounts for if you allow a telematics device to be placed in your vehicle so they can monitor your driving habits. This is considered “pay-as-you-drive.” This can give up to a 45% discount. With pay-per-mile, you’ll pay for the distance you drive, rather than driving patterns. Both discounts are great for teens or families that don’t drive very often.
  9. Delay getting a license. This is not really a discount and probably not the a popular option for an eager teen driver, but it’s worth considering. An older teen driver is slightly cheaper to insure, approximately 20% cheaper from the age of 18 to 19.

Car insurance for college students

College students can follow the same guidance as given to the rest of teens. There is potential to save though. If the student plans to leave their car at home and the college is more than 100 miles away, they could qualify for a “resident student” discount or a student “away” discount, as mentioned above. These discounts can reach as high as 30%. Also, do well in school because that could lead to a good student discount. Both discounts will require you to contact your insurance provider so they can begin to apply the discounts. While your on the phone with them, don’t hesitate to ask about other discounts you may qualify for.

And remember, it’s easy to shop for car insurance using our quote comparison tool that allows you to see side-by-side quotes. It’s a free online tool and only takes about 10 minutes to see rates. Check it out

Learner’s permit insurance

You can get insurance with a permit, but most car insurance companies include the permitted teen on the parents’ policy without any action. However, the teen should be added to the parents’ policy or get their own policy when they receive their driver’s license. When that time comes, be sure to visit the rest of this article for guidance on options and discounts. Also, it may be wise to contact your insurance provider for all options available to you. But, as we have made abundantly clear in this article, it’s probably in your best interest to shop using our quote comparison tool so you can see side-by-side quotes.

Opt for no coverage savings option

It’s possible to tell your insurance company not to cover your teen, but it’s not a given. This is called a named exclusion. Through an endorsement to your policy, you and your insurance company mutually agree that the driver is not covered, which means neither is any accident the driver causes. Not all companies allow this, and not all state do either.

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