Overview
Shopping for car insurance as a new driver can be tricky. Since you don’t have much experience on the road, rates are usually higher, and it’s not always clear what coverage makes the most sense. The good news is that some companies go out of their way to make things easier for beginners, offering better prices, simple tools, and discounts that can help cut costs.
In this article, we’ll break down the best auto insurance options for new drivers, from affordable providers to those with handy perks like safe driving apps and first-time driver programs.
Whether you’re a teen getting insured for the first time or an adult who’s just starting to drive, this guide will help you find coverage that’s affordable, reliable, and right for your situation.
How a Driver’s Age Impacts Car Insurance Rates
One of the biggest factors that affects car insurance rates is a driver’s age. Younger drivers, especially teens and those under 25, typically pay the highest premiums because insurers see them as higher-risk due to limited driving experience and higher accident statistics.
As drivers gain more years on the road without major incidents, their rates usually drop, often reaching their most affordable point in their 30s to 50s. However, costs can creep back up again for older drivers, especially those over 70, as insurers account for slower reaction times and other age-related risks.
Understanding how age influences pricing can help new drivers set realistic expectations and plan for potential savings as they build a safe driving record.
The Rundown
Best for students: Auto-Owners
Best for rideshare drivers: State Farm
Best for drivers seeking the best customer service: Amica
Best for safe drivers: Progressive
Best for military families and veterans: USAA
Best for homeowners looking to bundle: American Family Insurance
- Best for: Students
- Average cost/month: $181
- Average cost/year: $2,173
- Availability: 26 states
Auto-Owners Insurance
Details:
When you purchase a policy through Auto-Owners Insurance, you work directly with an independent agent for more personalized service. Auto-Owners was founded in 1916 in Lansing, Michigan and today, provides auto, home, life and many other types of insurance in 26 states.
Why we like it
Students can get discounts for maintaining a B or better average, leaving their cars at home while they are away at college, or signing up for Teen Driver Monitoring. There are also many other discounts available, including savings for consistently paying your bill on time.
Pros & Cons
Pros
Many ways to save
Offers many different types of insurance bundles
Independent agents provide personalized service
Cons
Only available in 26 states
No online quotes available
- Best for: Rideshare drivers
- Average cost/month: $226
- Average cost/year: $2,707
- Availability: Every state except Massachusetts and Rhode Island
State Farm
Details:
State Farm insurance is sold through the company’s network of independent agents to ensure friendly, local, personalized service. In business since 1922, today the company provides more than 96 million insurance policies and other financial service products.
Why we like it
State Farm allows drivers to personalize their policies for extra savings. They offer multiple discounts for safe drivers and students. Unlike some other insurance companies, State Farm offers rideshare coverage as an add-on to your auto insurance policy for an average of 15% to 20% more in premium costs.
Pros & Cons
Pros
Friendly local service through independent agents
Easy-to-use mobile app
Flexible bundles
Many discounts available
Cons
No 24/7 customer service
Not sold in Massachusetts and Rhode Island
Accident forgiveness can’t be purchased
- Best for: Drivers seeking the best customer service
- Average cost/month: $321
- Average cost/year: $3,857
- Availability: All states, except Hawaii
Amica Auto Insurance
Details:
Amica is a mutual insurance company, which means policyholders own a stake in the company. It also happens to be the oldest mutual car insurance company, in business since 1907. The company has an A+ rating from AM Best and an average of 4.4 stars on TrustPilot.
Why we like it
Amica has a solid reputation for reliable customer service and fast and easy claims processing, as exemplified by positive reviews. The company offers many ways to lower your premiums and offers dividends on some policies, which essentially puts cash in your pocket.
Pros & Cons
Pros
Long history of financial stability
Online quote in 8 minutes
Dividend policies pay up to 20% of your premium
Highly rated customer service
Cons
More expensive than average
May cost more if you don’t pay upfront
Dividends not available in every state
- Best for: Safe Drivers
- Average cost/month: $182
- Average cost/year: $2,187
- Availability: All 50 states
Progressive
Details:
Many people recognize the Progressive name from the company’s ad campaign featuring “Flo,” the friendly insurance salesperson. Progressive launched in 1937 and boasts several “firsts” in the insurance industry, including the introduction of 24/7 claims service in 1990.
Why we like it
With discounts for installing the Snapshot plug-in telematics device or using the app, Progressive rewards drivers based on good driving habits. Drivers with no tickets or accidents in three years can save as much as 34% on their premiums. The company says drivers have saved more than $1.2 billion with Progressive.
Pros & Cons
Pros
24/7 claims
Safe driver discounts
Instant online quotes
Accident forgiveness
Cons
Premiums may be higher if you have accidents or tickets
Average premiums slightly higher than some competitors
- Best for: Best for military families and veterans
- Average cost/month: $172
- Average cost/year: $2,068
- Availability: Only to qualifying military members, veterans and their families
USAA
Details:
USAA is a financial services company serving members of the U.S. Armed Forces, veterans, and their immediate families. The company provides affordable auto insurance with discounts for safe driving, multiple vehicles on the same policy, and even keeping your car in a garage on a military base.
Why we like it
USAA offers many discounts and features tailored toward active military members and their family, such as lower rates for storing your car while you are deployed or for garaging it on a military base. As a full-service financial company, USAA also offers banking and investment services, so you can manage most of your financial needs with one company. Plus, its rates are substantially lower than many other carriers.
Pros & Cons
Pros
Telematics discounts for safe drivers or low-mileage drivers
Lower than average premiums
Online quote in minutes
Cons
Only available to military members, veterans, and their families
No in-person agents
- Best for: Homeowners looking to bundle coverage
- Average cost/month: $215
- Average cost/year: $2,571
- Availability: Available in 19 states
American Family Insurance
Details:
Founded in 1927, American Family Insurance (AmFam) is a mutual insurance company, which means its customers are its shareholders. The company provides many types of vehicle and home insurance, as well as life insurance, pet insurance, and business insurance.
Why we like it
American Family Insurance blends low premiums with stellar customer service. Multi-line discounts help drivers save even more, while the company’s telematics program rewards safe driving habits. Reviewers on the App store gave the insurance app 4.7 stars, while TrustPilot reviewers gave the company an average of 4.5 stars.
Pros & Cons
Pros
Excellent customer reviews
Save 25% when you bundle home and car insurance
Discounts for safe driving
Cons
Only available in 19 states
Ways To Save on Car Insurance for New Drivers
Car insurance can feel pricey when you’re just starting out, but the good news is there are plenty of ways to lower your costs. From discounts and safe driving programs to smart policy choices, new drivers have several opportunities to make coverage more affordable.
Here are some of the best ways to save:
Good student discounts – Many insurers lower rates for high school or college students who maintain a strong GPA.
Driver’s education courses – Completing an approved course can not only make you a safer driver but also qualify you for discounts.
Bundling policies – Combining auto insurance with renters, homeowners, or other coverage can lead to significant savings.
Usage-based programs – Some companies offer apps or devices that track your driving habits; safe driving can earn you lower premiums.
Staying on a parent’s policy – For teens and young adults, remaining on a family policy is often cheaper than buying separate coverage.
Shopping around – Comparing quotes from multiple insurers ensures you’re getting the best possible rate.
Choosing the right car – Vehicles with strong safety ratings and lower repair costs usually come with more affordable insurance rates.
FAQ's
What is car insurance?
Car insurance is a contract between you and an insurer that protects you against financial loss in the event of an accident, theft, or damage involving your vehicle.
Why do I need car insurance?
It’s legally required in most places and protects you financially from costs related to accidents, injuries, and vehicle damage.
What does car insurance cover?
Coverage varies, but generally includes:
Liability (injuries/damages to others)
Collision (damage to your car from a crash)
Comprehensive (non-collision damage like theft, fire, hail)
Uninsured/Underinsured Motorist
Medical payments or PIP (personal injury protection)
by your friends at The Daily Navigator
