Turning 21 may be one of the most exciting times in your life, but when it comes to your car insurance, you may find yourself less than thrilled. Although you may have been driving for several years, your car insurance rates are likely still higher than average.
If you are searching for the best car insurance for 21-year-olds, Bankrate’s research may help you. Our insurance editorial team has obtained average premium information from Quadrant Information Services for 21-year-old drivers with their own policies. We analyzed the data by gender and company, and we will also take a look at some ways you may be able to save on your premium.
How much is car insurance for a 21-year-old
On average, 21-year-old drivers pay $2,967 per year for full coverage car insurance, almost $1,300 more than the national average full coverage premium of $1,674. Minimum coverage for 21-year-olds costs $874 per year, also higher than the national average, which is $565 annually.
Car insurance prices are based on risk. If you are 21-years-old, you still have less driving experience than older drivers. To compensate for the increased risk of you causing an accident, car insurance companies typically charge a higher rate if you are younger. Statistically, your premiums should begin to decrease when you turn 25.
Average cost of car insurance for men vs. women
Age is not the only factor that determines car insurance rates. In most states, gender is also a rating factor. Regardless of age, men tend to have riskier driving behaviors than women, and that can lead to more accidents and more serious accidents. If you are a 21-year-old male, both your age and your gender may increase your auto insurance premiums.
There are several states that do not allow insurance companies to rate policies based on gender. These are California, Hawaii, Massachusetts, Michigan, North Carolina and Pennsylvania. This does not mean that in these states all 21-year-olds pay the same price; there are numerous other factors that determine how much your car insurance costs. But in these states, gender is not used as a rating factor, so your gender will have no bearing on how much you pay.
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Cheapest car insurance companies for 21-year-olds
Because car insurance tends to be relatively expensive for 21-year-olds, you may be searching for the cheapest car insurance company. While age is one of the biggest factors in determine premium, there are other factors, like the type of car you drive, the coverages you choose, the discounts you qualify for and your driving history.
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. If you are looking for cheap car insurance for 21-year-old drivers, you may want to get a quote from the following companies:
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USAA offers the cheapest full coverage and minimum coverage premiums on our list, but the company only sells insurance to current and past military members and their immediate families. If you qualify for coverage, you may have access to cheap average premium, excellent claims service and plenty of discounts. On top of the low average premiums, you may save money if you insure a new car, garage your vehicle on a military base, store your vehicle while you are deployed or spin your policy off from your parents’ USAA policy.
Learn more: USAA Insurance review
If you are looking for cheap coverage and a range of coverage options and discounts, Erie might be a good option. However, Erie is not a national carrier. You will only be able to purchase Erie’s auto insurance if you live in one of the 12 states that the carrier operates in. If you are eligible for coverage, Erie provides unique options on their standard auto insurance policy, like pet coverage and locksmith coverage. You might also be interested in the Erie Rate Lock feature, which keeps your premium from increasing unless you make certain changes to your policy, like adding a driver or vehicle or changing your coverage.
Learn more: Erie Insurance review
Geico is known for offering low average rates and a wide range of discounts, and this holds true for 21-year-old drivers. You might save for having certain safety features on your vehicle, being a good student or taking a driver’s education course. The company also offers a robust mobile app, which allows you to file claims, pay bills, call for roadside service, view ID cards and make changes. However, Geico does not offer as many optional coverages as some of the other companies on our list, and it did receive a below-average score for claims service from J.D. Power.
Learn more: Geico Insurance review
Travelers may be a good choice if you are searching for a highly customizable policy. In addition to the standard car insurance coverages, like liability, uninsured and underinsured motorist coverage, collision and comprehensive coverage, Travelers offers a long list of optional coverages to round out your policy. You may want to add roadside assistance coverage, gap coverage, rental car reimbursement, accident forgiveness or ridesharing coverage. If you are looking to save, Travelers offers numerous discounts that might lower your premium.
Learn more: Travelers Insurance review
Progressive might be a good choice if you are looking for digital tools. The company’s Name Your Price tool allows you to enter your monthly budget and then shows you several coverage options within your designated price range. You can also compare several companies right from Progressive’s website, which might make your car insurance search easier. Although Progressive’s average full coverage and minimum coverage rates for 21-year-olds is the highest on our list, the company also offers numerous discounts that might help you save. You could save for getting a quote and buying a policy entirely online, paying in full, being a good student or participating in the Snapshot safe driving program.
Learn more: Progressive Insurance review
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.
Car insurance companies all have different 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 coverage limits. You may also discover that a particular company has features or tools that you enjoy, or that a company offers several discounts that you qualify for.
Take advantage of good student discounts
If you are under 25-years-old and a full-time student, many insurance companies offer a good student discount. The qualifications will vary by company, but most companies require that you maintain a B-or-better letter-grade average or a 3.0 GPA. You may be asked to provide a copy of your most recent grade card to qualify. The average premium for 21-year-olds without good student discounts is $2,967 per year for full coverage. With a good student discount, it goes down to $2,893 annually.
Take advantage of distant student discounts
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. You also must be listed as a driver on your parents’ policy to qualify for this discount. If you have a policy of your own, this will likely not be an option for you. 21-year-old drivers on their own policy pay an average of $2,967 per year for full coverage car insurance. If you are listed on your parents’ policy and take advantage of a distance student discount, your full coverage premium could go down to $909 per year.
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.
Improve your driving skills
Many insurers offer a discount to drivers who will agree to install a telematics device in their car or use a mobile app to track your driving. These programs record information about your driving skills, such as your speed, braking habits and the time of day you are driving. You could earn a discount based on the personalized data that the company receives regarding your driving habits
How to get the best insurance for a 21-year-old
Finding the cheapest car insurance does not always mean you have found the best car insurance for your needs.
When shopping for insurance, first determine what you need and want from a policy. Do you want a company that has a strong mobile app? Are you looking for certain coverages or discounts? How strict is your budget? Everyone has different needs and wants when it comes to insurance.
Once you have decided what matters, you can get quotes from several companies to see which quotes 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.
Frequently asked questions
Why is insurance more expensive for 21-year-olds?
Although you might have been driving for several years, you are still considered inexperienced by most insurance companies. Your premium will depend on your individual rating factors, like the type of car you drive, the coverages you choose, the discounts you qualify for and your driving history. Just because you are 21 does not mean you will be charged for accidents and tickets you do not have — drivers with incidents like these on their driving record will still likely pay more for insurance than drivers with clean records. But in general, 21-year-olds still pay more for car insurance due to the higher risk of causing an accident due to inexperience.
Is it cheaper to stay on my parents’ insurance policy?
It could be, and if they are willing, it is worth exploring this option by checking with their insurance agent to see what the rate would be if you stayed on their policy versus getting your own policy. Even if you get your own policy, it is a good idea to get a quote with their insurer, since there may be a family loyalty discount you can take advantage of. You will only be able to stay on your parents’ insurance policy if you still live with them or if you are away at school. If you have moved into our own home, condo or apartment, you will have to get your own policy.
Is my premium going to go down as I get older?
Yes, if you keep a clean driving record, your rate should decrease over the next several years. However, there are numerous factors that go into determining auto insurance premiums. Your age is one of them, but your premium will depend on all of your individual rating factors, not just your age.
Bankrate utilizes Quadrant Information Services to analyze 2021 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Quoted rates are based on a 21-year-old male and female drivers with a clean driving record, good credit and the following full coverage limits:
- $100,000 bodily injury liability per person
- $300,000 bodily injury liability per accident
- $50,000 property damage liability per accident
- $100,000 uninsured motorist bodily injury per person
- $300,000 uninsured motorist bodily injury per accident
- $500 collision deductible
- $500 comprehensive deductible
To determine minimum coverage limits, Bankrate used minimum coverages that meet each state’s requirements. Our base profile drivers own a 2019 Toyota Camry, commute five days a week and drive 12,000 miles annually.
These are sample rates and should only be used for comparative purposes.