Spend your 20s enjoying life — we'll handle the insurance
Being 20-years-old can have major implications in the car insurance world. While you’re no longer rated as a risky teenager, you still pay more for car insurance than the rest of the population. On average, 20-year-olds pay nearly $1,500 more for car insurance than the national average. And considering most 20-year-olds aren’t exactly living lavishly, we decided to survey some top insurance companies to see who offers the cheapest car insurance. Let’s explore which insurance company is the cheapest as well as other ways to save on car insurance.
You see some big savings simply by turning 20 - an average of $260 per year in savings! This data assumes you’ve been driving since you were 16-year-olds and were insured since then as well. The more years of driving experience and the more time you are insured, the less risky to a car insurance company you appear. As insurance companies are designed to mitigate and predict risk, the less risky you can appear the cheaper of a client you will be. In other words, the less you’ll pay. Looking at the data below, you can see how your car insurance premium decreases as you age.
|Age||Average Premium on Family Plan|
While you’re under 25, your gender is still a pretty considerable rating factor. As we’ve stated, car insurance companies look at risk exposure (probability you will get into an accident and they will have to pay out a claim) when calculating a premium. And to them, a 20-year-old male driver is riskier than a female. As such, males pay $172 more than average for car insurance than females during a 6-month premium cycle. Still, you should take comfort in the fact that on average, men only pay $1 more per year than women.
Average Premiums for 19-21-year-olds
Car insurance is regulated at the state level and priced based on your zip code. Which means there’s a considerable amount of variance in car insurance premiums depending on where you live. Living near a coastal region, such as Florida or Louisiana, can have major impacts on your car insurance premium given the risk of hurricanes and flooding. In the same regard, if you live in a well-populated zip code, such as a university-area, you can expect to pay more for the added probability of an accident given the population.
Annual Premium for Most Expensive States
Your car insurance rate not only factors in you and your actions but also your vehicle. So, if you have a high-value vehicle you’re going to have a higher premium as your insurance company would have to replace it in the event of a covered claim. So, if you’re looking for a car that will reduce your premium, chose something moderate and get a quote from your car insurance company beforehand.
Although it might feel like you’re going to pay an arm and a leg because of your age, there are some things you can do to save on your car insurance even if you’re a young driver.
As we stated, 20-year-olds over 50% more for car insurance than the national average in 2017. This is a 20% increase from the previous year! Based on this, we can imagine that car insurance is only going to get more and more expensive from young drivers. So, let’s look at some car insurance companies using a profile outlined here.
Cheapest car insurance for 20-year-olds
|Insurance Company||Average Premium for 6-Month Policy|
While our profile and located won’t exactly line up with you, you should consider our data as a jumping off point when exploring cheap car insurance. Beginning, but not ending, your search with Geico and Progressive.
Most car insurance companies offer a discount based on your ages from 16 to 25, but this can vary. Basically, if you have a 3.0 GPA or above (on average), your car insurance company can offer you a discount. The reason for this has less to do with a reward for academic success, but the way insurance companies view students with good grades. Returning to this idea of risk management, car insurance companies see high performing students as less likely to take risks while driving. All of which makes them a cheaper client. Combined with a defensive driver discount, you can save an average of $189!
Average Savings for Good Student and Good Driver Discount
If you’ve taken a defensive driving class, meaning a professionally instructed class that your car insurance company usually must approve of ahead of time, you may be entitled to a discount. Like having good grades, car insurance companies see those who have completed these types of courses as safer and cheaper clients.
Your car insurance has a nasty habit of working as a double-edged sword. The more you use it, the more it will cost.
Average Increase after at At-Fault Claim
|Increase at 6 months||Increase at 12 months||Increase at 3 Years|
If you’re unsure of whether or not to file a claim for damages to your car, use this handy breakdown.
Keep in mind, however, that this is specific to collision car insurance claims. Not-at-fault accidents or comprehensive claims typically don’t raise your rates as dramatically as at-faults.
As your car ages, it loses value. In terms of your car insurance, this means that the coverage you once had on your 2000 Civic might not be necessary anymore. A general rule of thumb in the world of car insurance is if your vehicle is worth less than $4,000, you probably don’t need physical protection. On average, collision and comprehensive makeup about half of your premium.
If you’re living in an apartment or house, you should have a renter’s insurance policy. A renter’s policy will cover you (your liability) as well as your personal property in the event of a covered claim. Compared to a car insurance, renter’s policies are quite inexpensive - about $150 a year. But if you get your renter’s policy from the same insurance company as your auto, you can expect a multi-policy discount.
Bundling Savings by National Average
|Renter||Renter with Multi-Policy|
As you can see from our data, there is a lot of variance between what one insurance company will charge you and what another will. Meaning, it's important to look at as many companies as possible in order to find the best and cheapest rate for you. Enter your zip code below to see how much you could be saving.
The first year of your 20s welcomes you to the early stages of car insurance savings. On average, 20-year-olds pay $1,502 for car insurance every 6 months. Choosing a moderate car, keeping your grades up and your driving record clean are great ways to start saving. Moreover, if you have a renter’s insurance policy, consider bundling it with your car insurance to get a discount. However, the best way to save on car insurance is to look at a wide variety of companies often. There are many things that can change in your driving profile that can impact your premiums. Only with us can you shop 200 companies at once. Start now.
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