Becoming an adult is kinda terrifying — so let us handle the insurance
In order to really unravel which company has the cheap premiums for 20-somethings, we created a user profile outlined here and examined 5 companies across 5 zip codes in the US. Keeping all other metrics the same, we discovered that Progressive had the cheapest rates, which Geico in a close second. Here are our overall results.
|Location||State Farm||Allstate||Geico||Progressive||Liberty Mutual|
You should consider, however, that the profile we used most likely won't match you — as you most likely don't live in the zip code we outlined or you might not be the age we surveyed. Still, you should use our data as a reference when shopping for car insurance. We suggest beginning your search with Progressive and Geico.
There are some gray areas with your car insurance in your 20s. You’re in that time of your life when you have one foot in the world of adulthood and independence, and another foot still at your parent’s house. Insurance, in all its forms, is mirrored to reflect you and your assets. Meaning with every major life event, your insurance is probably going to wiggle a little bit as well. Let's break down some of the ways you can expect your insurance to change and what you should do about them.
|In simplest of terms, you need to your own policy if you are living outside of your parent's residence and drive a vehicle. Because insurance is zip code specific, living with your vehicle (even if it's in the same city) doesn't allow your insurance company to anticipate the risks they would use to calculate the premium.||You don't need to get your own policy if you don't drive a vehicle regularly or if you still live with your parents. If you're away at college (usually more than 100 miles away) but don't drive, you should speak with your insurance company about a Student Away From Home Discount.|
It’s pretty common for 20-somethings to have roommates, but not everyone knows exactly how this affects your car insurance. Most insurance companies have ardent stipulations regarding your roommates: they either need to be on your car insurance policy or they need to be excluded entirely. Because you and your roommate share a space and share responsibilities, they see the likelihood of sharing vehicles to be high and thus want to be compensated for that shared risk.
So, if you’re living with someone else, either add them to your policy (or you to theirs) or exclude them. In terms of excluding someone from your policy, some insurance companies will require you present them with documentation that shows they have outside insurance. Others will just take your word for it. For more information on the ins and outs of car insurance with roommates, look no further.
After you get married, make sure you inform your insurance company and add your significant other to your policy if you haven't already. This will help with simplifying car insurance in several ways. One, you will see an automatic decrease in your premium. By updating your marital status from single to married, you can expect a decrease in your car insurance premium by about $74/year.
Secondly, it's just easier. As we stated, if they’re not on your policy already you’ll have to exclude them — meaning, anytime they would use your vehicle they would be driving essentially without insurance. This can come back to bite you if you need to switch vehicles, or if you’re unable to drive and need their help. Plus, one bill! Easy and simple. If you have other questions about being married and your car insurance, check out our guide.
National Average of Car Insurance By Marital Status
Entering the realm of homeownership opens up a lot of doors for the insurance possibilities. Just like getting married, buying a home can decrease your car insurance policy for two reasons. One, if you bundle your home and auto with the same company, you will receive a handy multi-policy discount. Second, insurance companies view homeowners as more financially stable than renters and thus reward that stability with a decreased premium.
Savings for Homeowners
Aside from your teen years, your 20s will be the most expensive time to insure your car. Young and inexperienced drivers are considered liabilities for insurance companies and thus are charged higher than other drivers. Still, you can compensate these charges in a couple of different ways.
If you're under 25, taking a defensive driving course can save you a few bucks on your auto policy. To an insurance company, drivers who have taken a professional driving class are less likely to receive citations or file claims. All of which means you appear to be a better client for them — i.e., less premium!
If you're under 25 and have above a B average, your insurance company will often reward you with a discount (dependent on proof). Coupled with a defensive driver discount, drivers in their 20s can save an average of $122 per year!
Average Savings for Good Student and Good Driver Discount
If you rent an apartment or own a house, use one insurance company for both. Bundling your auto/renters policy or auto/home with the same company can save you hundreds a year on your auto insurance. Plus, it keeps all your bills within the same company.
National Savings for Bundling
While you shouldn't spend too much of your 20s concerned about car insurance, the complexities of this time can create some gray areas. All kinds of major life decisions will affect you and insurance rates: whether or not you need your own policy, adding a roommate to your polciy, and even tying the knot. Still, starting first with Progressive and Geico as well as our other suggestions are great ways to find some savings.
We randomly selected 5 zip codes in 5 different areas across the US by using the 5 most popular companies in the US based on net premiums written. Here are the zip codes we selected:
Next, we needed to create the profile of the 25-year-old driver. Here is the information:
Should my daughter have her own insurance policy?
My daughter is a 25 year old student living in NYC and is listed as a driver on my policy ...
Since my son is under 25 and damaged his car, does it make more sense for him to file a claim or pay out of pocket?
My son, who will turn 25 in four days, has never had an accident. Yesterday, he slid on ice and ...
When you’re buying a house for the first time, you may be surprised by how many different people you’ll work...
We all have days when we want nothing more than to become one with the couch. But for most of...
Buying a home has often been treated as a financial rite of passage. Past generations have generally considered it a...
Moving to a new state can be an exciting adventure. As with most moves, it requires a bit of paperwork...
You buy a new mattress every seven years and a new toothbrush every three months. You shop for new running...
Behind every diploma bestowed at high school and college graduations is a lot of hard work. And for some lucky...
Moving is a big thrill, a big hassle, and all-in-all, a big deal. For many people, it’s also the biggest...
By now, the dangers of drunk driving are widely known and there’s serious stigma attached to it. But other types...
First, the easy bit: renters insurance is a must, even if you think you don’t have a lot of expensive...
Renters insurance comes in handy when the unexpected happens. From a house fire to a break-in, it’s important to know...
The sharing economy is currently worth about $26 billion and grows bigger each day. Even with regulations meant to curb...
According to 2015 Census data, 63 percent of the U.S. population lives in cities, though they squeeze into just 3.5...
Nothing can make even the savviest of consumers’ eyes glaze over quite like the phrase “insurance bundling.” And we get...
Moving sucks as it is. Moving across the country is even more complicated. If you’re planning a big move and...
You’re first in line at a red light, calmly waiting for the green, maybe even enjoying the music or scenery,...
When I turned sixteen, my father gave me the keys to a shiny blue 1998 Isuzu Rodeo—and the news that...
You already know it's dangerous, but you have to see these stats broken down to understand how truly terrifying this trend is.