Car Insurance for New Drivers
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Car insurance for new drivers tends to be more expensive than comparable coverage for seasoned drivers with clean records.
New drivers can include teens and young adults driving for the first time, immigrants without a U.S. driving record and people with a gap in coverage.
Shopping around and comparing rates can help new drivers find the most affordable car insurance policy possible.
Car insurance for new drivers tends to be more expensive than comparable coverage for seasoned drivers with clean records.
New drivers can include teens and young adults driving for the first time, immigrants without a U.S. driving record and people with a gap in coverage.
Shopping around and comparing rates can help new drivers find the most affordable car insurance policy possible.
Car insurance for new drivers isn’t just for young people getting behind the wheel for the first time. Insurance companies consider anyone without a recent driving record or insurance policy to be risky, no matter their age.
Here’s what to know, whether you just got your license or are back from a driving hiatus.
See what you could save on car insurance
Easily compare personalized rates to see how much switching car insurance could save you.Who needs car insurance for new drivers?
Although there’s no special kind of car insurance for new drivers, rates for inexperienced drivers are usually higher than those for more seasoned drivers.
Car insurers generally categorize new drivers as:
Teenagers who just got a driver’s license.
Adults who are driving for the first time.
Immigrants and foreign nationals.
Drivers of any age with a gap in driving or insurance coverage.
Teenagers
Auto insurance companies charge higher rates for teenage drivers because they’re more likely than any other age group to be in an accident. The best way to get cheap car insurance for a teen driver is for the teen driver to be added to their parent’s or guardian’s policy, as long as they share the same permanent address.
Beware that "cheap" is relative — adding a teen to a married couple’s policy may increase the couple's rate, too. However, an insurance policy is mostly priced based on the primary driver, so a teen going it alone is likely to pay much more expensive premiums and will miss out on discounts for having multiple drivers and cars insured under one policy. You can compare multiple new-driver insurance quotes online to be sure.
How teens and young drivers can get cheaper car insurance
Some good news: Insurance companies offer plenty of discounts for students and young drivers, and rates will get better over time with safe driving.
Insurance rates typically get cheaper around age 25, provided the driver has a few years of experience under their belt.
Cheapest auto insurance rates for young drivers
Below are some of the largest insurers’ average annual rates for 20-year-old drivers, according to NerdWallet’s November 2024 rates analysis.
| Company | Full coverage | Minimum coverage |
|---|---|---|
| Allstate | $6,623 | $1,401 |
| American Family | $3,891 | $1,391 |
| Farmers | $7,698 | $2,520 |
| Geico | $3,568 | $962 |
| Nationwide | $6,053 | $2,081 |
| Progressive | $3,834 | $1,094 |
| State Farm | $4,947 | $1,303 |
| Travelers | $3,934 | $1,129 |
| USAA* | $3,028 | $787 |
*USAA is only available to military, veterans and their families.
Immigrants and foreign nationals
Even if you have a long history of safe driving in another country, insurance companies consider you a new driver if you have no U.S. driving history. They access only domestic driving records when setting rates, so your driving history in the U.S. is all that counts. This also goes for your credit history, which is used to calculate auto insurance rates in many states.
Without a valid U.S. driver’s license, you may have a harder time getting an insurance policy, even if you have an international driver’s permit. However, most major insurers do insure people with foreign licenses or international driver’s permits, as long as their state of residence accepts these as valid driver’s licenses. If you’re renting a car, the easiest option may be to use the rental car company’s coverage.
If you plan on staying and driving in the U.S., you’ll need a driver’s license in the state where you live. Some states, like California, will issue a driver’s license regardless of immigration status. Once you have your license, get at least three auto insurance quotes so you can choose the best rate and coverage.
People with a driving or coverage gap
Your license could be expired because you spent some time abroad, or your lifestyle doesn’t require any driving. If you don't have a driving history to check, insurers can consider you a new driver. And without continuous auto coverage, they may consider you a high-risk driver, which can increase car insurance rates.
Even if you have some driving history, if you’ve had a gap in coverage at all, you’ll likely pay more for insurance, so it’s important to shop around for the best rates. Some companies make an exception for military deployment, so check with your insurer if that applies to you.
Since continuous coverage is one of the most important factors auto insurers consider, some may not accept your application if you’ve had gaps between policies. If that’s the case, you can look for high-risk insurance companies that specialize in coverage for people having a hard time getting insured.
See what you could save on car insurance
Easily compare personalized rates to see how much switching car insurance could save you.Pricing factors in a car insurance quote
Car insurance policies for new drivers have some of the highest premiums, but age and driving history aren’t the only things insurance companies consider when setting rates. Factors that affect car insurance quotes include:
Personal characteristics. This includes your age, gender and marital status.
The coverage you choose. The more liability coverage and additional options you have, the higher your insurance rates are likely to be.
Your vehicle. Your car’s make and model, safety features and likelihood that it’ll be stolen all affect your rate.
Your location. Every state has its own minimum car insurance requirements; factors like your neighborhood’s crime rate and population density will also affect your insurance price.
Your credit score. Drivers with poor credit typically have higher car insurance rates in states where pricing based on credit is allowed. California, Hawaii and Massachusetts don't allow insurers to use credit when determining car insurance rates.
» MORE: Get free car insurance quotes
How to save on car insurance as a new driver
While car insurance for new drivers will typically be more expensive than it would be for those with more experience on the road, there are still ways to save on a policy.
Shop around. Rates can differ tremendously depending on the insurer you use. To make sure you find the best possible price, compare quotes from at least three insurance companies. And continue to shop around each year — just because you had the cheapest rate a year ago doesn’t mean you still do.
» MORE: Compare auto insurance rates
Stay on a family auto insurance policy. If you have the same permanent address as your parents or guardians, compare rates for a stand-alone policy and then compare that to what it would cost to stay on your family’s insurance. It might cost less to stay on your family’s policy.
Look for discounts. Many auto insurers offer discounts that new drivers can take advantage of, including:
Good student discount.
Discount for young drivers who take a defensive driving course.
Student away-from-home discount (if you are on your parents' policy).
Multipolicy discount if you have renters or homeowners insurance.
Military or occupation discount.
Safety equipment discount.
NerdWallet found median rates based on public filings obtained by pricing analytics company Quadrant Information Services. We examined rates for men and women for all ZIP codes in any of the 50 states and Washington, D.C. Although it’s one of the largest insurers in the country, Liberty Mutual is not included in our rates analysis due to a lack of publicly available information.
In our analysis, “good drivers” had no moving violations on record; a “good driving” discount was included for this profile. Our “good” and “poor” credit rates are based on credit score approximations and do not account for proprietary scoring criteria used by insurance providers.
These are median rates, and your rate will vary based on your personal details, state and insurance provider.
Sample drivers had the following coverage limits:
$100,000 bodily injury liability coverage per person.
$300,000 bodily injury liability coverage per crash.
$50,000 property damage liability coverage per crash.
$100,000 uninsured motorist bodily injury coverage per person.
$300,000 uninsured motorist bodily injury coverage per crash.
Collision coverage with $1,000 deductible.
Comprehensive coverage with $1,000 deductible.
In states where required, minimum additional coverages were added. We used the same assumptions for all other driver profiles, with the following exceptions:
For drivers with minimum coverage, we adjusted the numbers above to reflect only the minimum coverage required by law in the state.
We changed the credit tier from “good” to “poor” as reported to the insurer to see rates for drivers with poor credit. In states where credit isn’t taken into account, we used only rates for “good credit.”
For drivers with one at-fault crash, we added a single at-fault crash costing $10,000 in property damage.
For drivers with a DUI, we added a single drunken driving violation.
For drivers with a ticket, we added a single speeding violation for driving 16 mph over the speed limit.
We used a 2021 Toyota Camry LE in all cases and assumed 12,000 annual miles driven. We analyzed rates for 20-year-old drivers.
These are rates generated through Quadrant Information Services. Your rates will be different.
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