Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001 and has an undergraduate degree from Manhattan College in ...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency, Real Time Health Quotes. He has an MBA from the University of South Florida. Joel...

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Reviewed by Joel Ohman
Founder, CFP®

UPDATED: Jul 19, 2021

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Insurance Q&A: “What is the best car insurance for young drivers?”

Young drivers often pay significantly higher auto insurance premiums than just about everybody else on the road. This is especially true for teen drivers, and even more so with teen males.

Often, a young driver is susceptible to these higher auto insurance premiums until the age of 25. Yes, that’s a full nine years of expensive car insurance if you’re keeping track.

[How much is car insurance for a 16 year old?]

So if you’re young and looking to operate your own vehicle, you’ll certainly face challenges when trying to obtain quality auto insurance coverage at a reasonable price.

Be Careful Not to Cut Corners Just Because Coverage Is Expensive

It’s human nature to head toward the discount aisle when faced with a steep bill. But sacrificing proper coverage to save a few bucks now could cost you later in the event you need to file a claim.

And while some insurance salespeople may direct you toward the cut-rate, discount stuff, more emphasis should be aimed at ensuring the youngster is “appropriately” insured at the right price.

If you want to know what the cheapest car insurance is, or simply want to know how to get cheap car insurance, don’t bother reading the rest of this post.

Continue on if your main goal is evaluating what the best insurance coverage is for younger drivers.

As always, it’s a good idea to read up on how car insurance rates are determined in order to better understand how much you may be charged and why.

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What Is the BEST Coverage – Finances Aside?

  • Young drivers and older drivers generally have the same insurance needs
  • Especially liability coverage in the event they harm someone else or their property
  • The odds are higher of such an even taking place with a youngster behind the wheel
  • So cutting costs could be even riskier than it would be with an older driver

Assuming your primary goal is simply ensuring a young driver has “the best” (appropriate and well priced) insurance coverage, you would treat a young driver no different than a driver of any age.

Being young certainly doesn’t exclude you from getting into accidents and causing bodily injury and property damage to others. In fact, the odds are much higher such events will occur…thus, the higher insurance premiums.

It is also important to understand that any individual who is found to be negligent in causing bodily injury and property damage to others can be “on the hook” for court awarded damages in excess of their policy limits.

This means that if you go with lower-end liability coverage and seriously injure someone and “total” his or her Ferrari, your insurer will ONLY PAY up to the policy limits.

The rest of the damages awarded to the Ferrari driver (hospital bills and replacing the Ferrari) could be your problem. If you’re broke and have no fear of being sued, this may not concern you.

[How much car insurance do I need?]

But if you are a younger driver with a statistically higher chance of causing an accident (and something to lose), you may want to consider purchasing the highest liability limits available that fit within your budget.

Tip: The decision to purchase full coverage, including collision insurance and comprehensive insurance, is dependent on the value of the vehicle to be insured and whether or not you own, lease or have a loan on the vehicle.

[Collision vs. comprehensive auto insurance coverage]

Final Word Regarding Insurance for Young Drivers

  • Regardless of age it’s important to have high liability limits
  • To protect yourself from the financial consequences of a serious auto accident
  • Young drivers may need to shop around even more than others to get the best price
  • And spend more time looking for discounts to ensure costs are reasonable

It is always recommended that you purchase the highest liability limits you can afford, young driver or old. Be sure to consider insurance at the top of the list as far as budget goes.

Skimping on your car insurance coverage to save a few bucks can have devastating financial ramifications in the event you are found to be negligent in a serious auto accident.

Compare insurance quotes online before making a decision. Even a young driver will see a wide range of pricing, so if you don’t shop around, you could find yourself losing out on coverage to stay within budget.

There are literally thousands of insurers competing for your business. Do your research and don’t choose an insurer based solely on their multi-million dollar advertising budget.

Find one that best suits your needs, and remember to shop again once you get a little older, instead of staying “loyal” to one insurer your entire life!

If you’re a parent, it might make sense to get your child insured with a different company. Sometimes it can be cheaper to keep everyone with one insurer, sometimes not.

Lastly, take the time to look for discounts geared toward younger drivers. For example, many insurers offer a discount simply for having good grades, usually defined as a GPA of 3.0 or higher.

Additionally, it might be possible to enroll in a defensive driving course and save money on a policy premium. Not only could it save some bucks, it could also save a young driver’s life if they learn something meaningful along the way.

Read more: The difference between full coverage and liability only car insurance.