How Much is Car Insurance for a 20 Year Old?
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Car insurance for 20-year-old drivers is typically pricier than premiums for older, more experienced drivers. For example, in 2021, the average cost of car insurance for a 20-year-old driver in the U.S. is $3,795 a year, while the average annual cost of car insurance for a 40-year-old driver is $1,674.
There is no one-size-fits-all car insurance premium price tag for 20-year-old drivers. Insurance companies consider a variety of factors when calculating your annual and monthly costs—from where you live to what kind of car you drive.
In this guide, we’ll outline how much is car insurance for a 20 year old, as well as some actionable ways you can lower your premiums. We’ll also explain why, no matter the cost, you should consider investing in car insurance. Read on.
How Much is Car Insurance for 20 Year Old Drivers?
Insurance companies base their pricing on hard data, and statistically, young drivers are more likely to be in a car accident.
In addition to how old you are, insurance companies will also take into consideration:
Your gender – In all states except for California, Hawaii, Massachusetts, Michigan, Montana, North Carolina, and Pennsylvania, gender will likely be considered when determining your premium. This is because, statistically, a male driver is more likely to engage in higher risk driving behavior than a female driver. With that in mind, the average full coverage premium for a 20-year-old man is $4,098, while the same coverage for a 20-year-old woman is $3,492.
The state in which you reside – Premiums, especially depending on what kind of coverage you’re looking for, will vary widely from state to state. Every state has a minimum amount of car insurance coverage required before you hit the road. Plus, there are other extenuating circumstances like statewide accident rates and inclement weather damages that may affect your pricing. Hawaii and North Carolina have some of the lowest car insurance rates overall for 20-year-old drivers, while Florida and Louisiana—two states that experience extreme climate events like hurricanes—have some of the highest rates.
Your zip code – If you live in or commute to what is considered a “dangerous” zip code (i.e. one in which car break-ins or other automotive-related crimes are more common), your auto insurance company may use this to increase your premium.
The car you drive – Insurance companies like to see cars with strong driving safety reports, as well as vehicles with built-in security features, such as anti-lock brakes and anti-theft devices. These features may even earn you a discount. \ \ On the other hand, insurance companies may increase your premium if you drive a very expensive car that requires pricey repairs or is more likely to be stolen. They may also charge more for liability insurance if you drive a car that can potentially inflict a lot of damage to another car in an accident.
Your driving history – If you’re a 20-year-old driver with a history of accidents starting from the time you got your learner’s permit, chances are your premium is going to be even higher than the national average car insurance rates. Your young age already puts you in the “risky” driver category, and a spotty track record may tell the insurance company that they should be extra cautious when insuring you and your vehicle.
There are some factors that will affect your car insurance premium that are simply out of your control, including your age, gender and the state in which you reside. You also may not have a choice on the type of car you drive.
However, you can keep your premium low by following a few simple steps.
How to Lower Your Car Insurance Premium
Twenty-year-old drivers who want to pay less than the national average of $3,795 a year for car insurance can either hop in a time machine, or follow these simple steps.
Be a Safe Driver and Follow the Law
Every time you get into an accident, whether it’s a fender bender or a more serious, at-fault injury collision, your insurance provider will likely raise your premium based on this evidence. The national average car insurance premium is $1,674. After an accident, this premium, on average, could go up to about $2,311. And that’s for drivers with years of experience and clean driving records under their belt.
So, one of the easiest ways to lower your premium is to simply follow the rules of the road, and drive as safely as possible. Insurers already place 20-year-old drivers in a “risky” category, so proving to them that you are in fact a good investment is paramount.
Look for Discounts
Being a young driver isn’t all bad. In fact, there are some discounts 20-year-old drivers can qualify for that will help to lower their annual premium, including:
Multi-car discounts – If you still live at home (and your parents agree to it) it can be in everyone’s best interest to put all cars under the same policy for a multi-car discount. Again, if you follow the first tip and drive safely every time you hit the road, your parents are more likely to include you on their plan, saving you money in the short and long term.
Youth-specific discounts – Young drivers can also earn discounts on their insurance by taking a driver’s ed class, receiving good grades (if they’re still in school), and maintaining a safe driving record.
Automatic payment discounts – Some insurance companies offer discounts if drivers set up automatic monthly payments.
Do Your Research
You wouldn’t drop thousands of dollars on the first car you see on the lot, and you shouldn’t invest your money in a car insurance company that isn’t offering you the best deals.
\ Depending on where you live, what kind of car you drive, and what your lifestyle is (i.e. living at home versus living on a college campus) certain insurance companies will offer you better deals for your specific situation, so be sure to explore.
Best Car Insurance Companies for 20-Year-Olds
It pays to shop around. Here are just some of the best car insurance companies for young drivers in 2021:
Best for Customer Service: Liberty Mutual
In 2012, Liberty Mutual was voted second overall for customer satisfaction by J.D. Powers. A feature that makes this company particularly appealing to young drivers is their accident forgiveness policy—your rates won’t go up after one claim. This could be a lifesaver for young drivers who aren’t totally at ease on the road just yet. Liberty Mutual also has a new car replacement policy, which means if you purchase a new vehicle and damage it in a crash within the first year of owning it, they’ll refund you enough to get the same new car again.
Best for Fast Claims: State Farm
State Farm has a proven track record of turning around accident claims quickly, which is ideal for young drivers who cannot afford to lose access to their car (or funds to pay for damages) for long. State Farm also has a tool on their website that lets drivers easily determine how their premium car insurance rate may increase or decrease depending on specific situations.
Best for Discounts: Geico
Geico offers young drivers a bevvy of discounts. These include:
Discounts for vehicle equipment like air bags, anti-lock brakes, anti-theft devices, and daytime running lights
Discount for five years being accident free
Discount for taking driver’s ed classes and defensive driving courses
Good grade discounts for teens, young adults, and college students
Federal employee discounts
3 Reasons Why You Absolutely Need Car Insurance
After shopping around for the best auto insurance rate for 20-year-old drivers, you may still not find a premium that fits your budget.
It can be tempting to choose the least comprehensive car insurance coverage to save money or forgo car insurance entirely. But even if you think you’re the most responsible driver in the world, accidents happen.
Having proper car insurance, even if the initial investment is pricey up front, will ultimately save you money. Investing in car insurance is important because:
#1 It Helps Protect You and Other Drivers
If you’re in an accident where you’re at fault, your insurer will help you compensate the other driver. If you don’t have insurance, chances are you could face a lawsuit, which could destroy your credit score, and leave you deep in debt.
If you’re in an accident where the other driver is at fault, their insurance will compensate you for any damages to your vehicle or medical bills you may face. If that driver doesn’t have insurance, you may have to bring a lawsuit against them, which would cost you time and money.
Bottom line: Car insurance protects your finances and gives you a safety net in case of emergency so one accident doesn’t derail your entire future.
#2 It Helps You Protect Your Assets
Your insurance company serves as a protective shield between you and all the other drivers on the road. Without insurance, a driver who you have a fender bender with could pursue your assets, from your vehicle to your home. With insurance, your company deals directly with the complaining party so you don’t have to.
Bottom line: If you can’t afford to pay the cost of an accident, you could lose more than just what’s in your bank account. Insurance protects your home, your vehicle, and other items that might be seized in case of an accident.
#3 It’s the Law
Almost every state requires some form of minimal insurance coverage for drivers to legally hit the road. In some states, this may not technically be classified as auto insurance, but rather “proof of financial responsibility.” Even if you commit to the bare minimum coverage, you’ll be better off than you would be driving sans any coverage.
Bottom line: Keep yourself safe on the road and from legal repercussions with auto insurance.
Compare Insurance Quotes with Online Auto Insurance
Need help finding the best car insurance coverage for 20-year-old drivers? Check out Online Auto Insurance, where you can easily get free car insurance quotes in a matter of minutes.
Finding the best price for car insurance shouldn’t be a mystery. With Online Auto Insurance, you can compare quotes across multiple providers, helping you make the best financial decision. Ready to get started? Check out Online Auto Insurance today.
Bankrate. Car Insurance for 20-year-olds. \ https://www.bankrate.com/insurance/car/20-year-old/
Insurance Information Institute. What Determines the Price of an Auto Insurance Policy?https://www.iii.org/article/what-determines-price-my-auto-insurance-policy
Money Under 30. Best Car Insurance Companies for Young Adults. https://www.moneyunder30.com/best-car-insurance-for-young-adults
Money Under 30. Why Do You Need Car Insurance? \ https://www.moneyunder30.com/why-do-you-need-car-insurance