Compare Car Insurance Rates for First-time Drivers in 2025 (Top 10 Companies)

The top pick overall to compare car insurance rates for first-time drivers are State Farm, USAA, and Progressive, each offering competitive rates starting as low as $100. As novices navigate the complex world of insurance, these companies stand out for their tailored coverage options, accommodating the unique needs of first-time drivers.

With State Farm’s extensive network of agents, USAA’s exclusive benefits for military personnel, and Progressive’s innovative usage-based insurance, first-time drivers have a range of options to choose from.

Our Top 10 Company Picks: Compare Car Insurance Rates for First-Time Drivers<

From safe driving discounts to personalized coverage, these top providers ensure advantageous premiums and peace of mind on the road. So, why wait? Compare quotes today and hit the road with confidence.

Stop overpaying for car insurance. Our free quote comparison tool allows you to shop for quotes from the top providers near you by entering your ZIP code above.

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#1 – State Farm: Top Overall Pick

Pros

• Good Student Discount: State Farm car insurance review highlighted the offers up to 25% safe driving discount, making it an excellent choice for first-time drivers who are also students.
• Low Complaint Level: With a low complaint level, State Farm indicates a high level of customer satisfaction and efficient claims processing.
• Competitive Average Monthly Rate: State Farm’s average monthly rate for first-time drivers, providing affordability for first-time drivers.

Cons

• Limited Multi-Policy Discount: While offering a multi-policy discount, State Farm’s maximum discount of up to 17% may be lower compared to other providers.
• Average A.M. Best Rating: While still a good rating, an A+ rating from A.M. Best for financial strength could be considered average in comparison to some competitors.

#2 – USAA: Best for Military Savings

Pros

• Military Savings: USAA is tailored for military personnel, offering up to 20% safe driving discount and up to 10% multi-policy discount.
• Low Monthly Rate: With an average monthly rate for first-time drivers, USAA provides one of the most affordable options for first-time drivers.
• High A.M. Best Rating: With an A+ rating, USAA showcases excellent financial strength and stability. Explore our USAA car insurance review to gain deeper insights.

Cons

• Limited Availability: USAA is exclusive to military members and their families, limiting accessibility for the general public.
• Limited Multi-Policy Discount: While offering a multi-policy discount, the maximum discount of up to 10% might be comparatively lower.

Read more: USAA Car Insurance Review

#3 – Progressive: Best for Usage-Based Insurance

Pros

• Usage-Based Insurance Discount: Progressive offers up to 30% safe driving discount, making it a great option for first-time drivers who prefer usage-based insurance.
• Low Complaint Level: With a low complaint level, Progressive demonstrates customer satisfaction and efficient claims handling. Take a look at our comprehensive Progressive car insurance review for further details.
• Competitive Average Monthly Rate: Progressive’s average monthly rate for first-time drivers, providing affordability for first-time drivers.

Cons

• Average A.M. Best Rating: While still a good rating, an A rating from A.M. Best for financial strength could be considered average compared to some competitors.
• Limited Multi-Policy Discount: While offering a multi-policy discount, the maximum discount of up to 15% might be comparatively lower.

Read more: Progressive Car Insurance Review

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#4 – Allstate: Best for Safe Habits

Pros

• Safe Habits Discount: Allstate offers up to 25% safe driving discount, making it a suitable choice for first-time drivers with a focus on safe driving habits.
• Multi-Policy Discount: With up to 20% multi-policy discount, Allstate encourages bundling insurance policies for additional savings. Investigate our Allstate car insurance review to uncover more insights.
• Competitive Average Monthly Rate: Allstate’s average monthly rate for first-time drivers for full coverage, providing a competitive option for coverage.

Cons

• Higher Average Monthly Rate: Allstate’s average monthly rate for full coverage is relatively higher compared to some other providers.
• Average A.M. Best Rating: With an A+ rating from A.M. Best, Allstate’s financial strength is good but may be considered average when compared to higher ratings.

Read more: Allstate Car Insurance Review

#5 – Nationwide: Best for Safe Behavior

Pros

• Safe Behavior Discount: Nationwide offers up to 40% safe driving discount, making it an attractive option for first-time drivers with a focus on safe behavior.
• High Multi-Policy Discount: With up to 25% multi-policy discount, Nationwide encourages customers to bundle policies for substantial savings.
• Competitive Average Monthly Rate: Nationwide’s average monthly rate for first-time drivers, providing affordability for first-time drivers.

Cons

• Average A.M. Best Rating: Nationwide’s A+ rating from A.M. Best, while good, may be considered average compared to higher-rated competitors.
• Limited Safe Driving Discount: While offering a safe driving discount, the maximum of 40% may be lower than some competitors.

#6 – Liberty Mutual: Best for Personalized Coverage

Pros

• Personalized Coverage: Liberty Mutual offers up to 30% safe driving discount and up to 12% multi-policy discount, tailoring coverage options for individual needs.
• Competitive Average Monthly Rate: Liberty Mutual’s average monthly rate for first-time drivers for full coverage, providing comprehensive coverage at a competitive rate.
• Online Convenience: Liberty Mutual provides an online platform for convenient policy management and claims processing. Examine our Liberty Mutual car insurance review to learn more about what we offer.

Cons

• Higher Average Monthly Rate: Liberty Mutual’s average monthly rate for full coverage is relatively higher compared to some other providers.
• Average A.M. Best Rating: With an A rating from A.M. Best, Liberty Mutual’s financial strength is good but may be considered average when compared to higher ratings.

Read more: Liberty Mutual Car Insurance Review

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#7 – Esurance: Best for Online Convenience

Pros

• Online Convenience: Esurance offers up to 30% safe driving discount and up to 15% multi-policy discount, with a focus on providing convenient online services.
• Competitive Average Monthly Rate: Esurance’s average monthly rate for first-time drivers for full coverage, providing affordability and comprehensive coverage.
• Usage-Based Insurance: Esurance appeals to telematics users by offering personalized rates through usage-based insurance. Review our resource titled “How do you get an Esurance car insurance quote?“

Cons

• Average A.M. Best Rating: With an A+ rating from A.M. Best, Esurance’s financial strength is good but may be considered average when compared to higher ratings.
• Limited Safe Driving Discount: While offering a safe driving discount, the maximum of 30% may be lower than some competitors.

#8 – Farmers: Best for Signal Users

Pros

• Signal Users Discount: Farmers offers up to 15% safe driving discount and up to 10% multi-policy discount, with additional incentives for Signal app users.
• Competitive Average Monthly Rate: Farmers’ average monthly rate for first-time drivers for full coverage, providing a competitive option for coverage.
• Personalized Coverage: Farmers tailors coverage options to individual needs, providing flexibility for first-time drivers. Delve into our Farmers car insurance review to discover valuable insights.

Cons

• Average A.M. Best Rating: With an A rating from A.M. Best, Farmers’ financial strength is good but may be considered average when compared to higher ratings.
• Limited Multi-Policy Discount: While offering a multi-policy discount, the maximum discount of up to 10% might be comparatively lower.

Read more: Farmers Car Insurance Review

#9 – American Family: Best for Personalized Coverage

Pros

• Personalized Coverage: American Family offers up to 20% safe driving discount and up to 15% multi-policy discount, tailoring coverage options for individual needs.
• Competitive Average Monthly Rate: American Family’s average monthly rate for first-time drivers for full coverage, providing affordability and comprehensive coverage.
• Safe Driving Discount: American Family provides a safe driving discount, encouraging and rewarding good driving habits. Browse through our American Family car insurance review to find out more.

Cons

• Average A.M. Best Rating: With an A rating from A.M. Best, American Family’s financial strength is good but may be considered average when compared to higher ratings.
• Limited Multi-Policy Discount: While offering a multi-policy discount, the maximum discount of up to 15% might be comparatively lower.

Read more: American Family Car Insurance Review

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#10 – Travelers: Best for Telematics Users

Pros

• Telematics Users Discount: Travelers car insurance review highlighted the offers up to 20% safe driving discount and up to 10% multi-policy discount, with additional incentives for telematics users.
• Competitive Average Monthly Rate: Travelers’ average monthly rate for first-time drivers for full coverage, providing a competitive option for coverage.
• Personalized Coverage: Travelers tailors coverage options to individual needs, providing flexibility for first-time drivers.

Cons

• Average A.M. Best Rating: With an A++ rating from A.M. Best, Travelers’ financial strength is good but may be considered average when compared to higher ratings.
• Limited Multi-Policy Discount: While offering a multi-policy discount, the maximum discount of up to 10% might be comparatively lower.

Exploring the Top 10 Car Insurance Providers for First-Time Drivers

The exploration of the top 10 car insurance providers for first-time drivers provides valuable insights into the financial considerations that novice drivers face when seeking coverage. For instance, USAA stands out with the lowest rates for both minimum and full coverage, offering an affordable option for eligible individuals associated with the military.

Compare Car Insurance Rates for First-time Drivers: Monthly Rates by Coverage Level & Provider

The average monthly rates for USAA are $100 for minimum coverage and $220 for full coverage. Conversely, Liberty Mutual presents the highest average monthly rates among the top 10 providers, with $160 for minimum coverage and $300 for full coverage. This discrepancy underscores the importance of considering individual circumstances and preferences when choosing an insurance provider.

Examining the data also reveals variations in rates among the different insurance companies. This comprehensive comparison of the top 10 providers allows prospective policyholders to make informed decisions based on their preferences, financial constraints, and the level of coverage they require.

While the presented rates provide a helpful starting point for comparison, it’s essential for first-time drivers to delve deeper into the policies, discounts, and customer reviews of each insurance provider to ensure they find the best fit for their specific needs and budget.

What is the average cost of auto insurance for first-time drivers?

The average cost of auto insurance for first-time drivers varies widely depending on the type of coverage you select and your driving record. 

The average annual premium for a basic liability policy may be as low as $500 per year, but full coverage could cost up to $2,000 or more annually. Car insurance costs depend on internal factors and the company you choose to buy from. 

Factors impacting your car insurance rates include your driving record, age, and credit score. Your location matters, too. Rates tend to be higher in urban areas with more traffic. The vehicle type you drive is also important. Older cars will typically cost less than newer ones to insure. These are just a few elements that can influence your coverage costs. 

Another factor to consider is the type of coverage you need. For example, liability coverage pays for injuries or damages caused by you, while comprehensive covers damage to your vehicle from other sources such as burglary or weather-related incidents. 

Finally, the car insurance company you choose will determine how much you’ll spend. Different companies offer different rates, so shop around and compare car insurance companies before you buy.

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How to Buy Car Insurance for the First Time

It’s essential to purchase the right car insurance coverage for your needs. Having the wrong type of coverage or inadequate coverage can leave you vulnerable to costly out-of-pocket expenses due to accidents, damage, or theft. 

The best way to ensure that you have the right car insurance policy is by consulting with an experienced insurance broker who can walk you through the process and advise you on how much coverage you need based on your particular situation. 

They will also be able to point out any discounts or special offers available in your area. Here are some more ways to save money on car insurance as a first-time driver.

Determine How You Want to Buy Car Insurance

You have several options when it comes to purchasing car insurance. You can buy a policy directly from an insurer, through a broker, or even online. 

Direct buying is often the best option for cheap first-time car insurance because you don’t have to pay a broker’s commission or fee. However, if you’re new to the process, going through a broker might be the best choice since they can explain coverage types and help you find discounts. 

An insurance broker specializes in helping people find the best car insurance coverage for their needs. A broker can compare policies from multiple insurers to help you find the right coverage at the most competitive price. (For more information, read our “Should I buy car insurance through a broker or direct from the company?”).

They also have expertise on different types of coverage and can explain them in more detail so that you understand what type of policy will work best for you. 

Shopping online allows you to compare quotes quickly and easily, but ensure that any site you use is reliable and secure. Overall, it’s important to research before you buy and confirm that you are getting the right coverage for your needs.

Decide How Much Auto Insurance Coverage You Need

The car insurance you need depends on several factors, including the value of your vehicle and the risks associated with where you live. Generally speaking, having at least liability and comprehensive coverage on your policy is ideal. 

Liability insurance pays for injuries or damages caused by you, while comprehensive auto insurance covers damage to your vehicle from other sources, such as burglary or weather-related incidents. 

Other optional coverages include collision insurance, uninsured/underinsured motorist, personal injury protection (PIP), and roadside assistance. 

It’s important to understand that buying more coverage isn’t necessarily better. You want to get coverage that fits your budget and needs. For example, if your car is older, you might not need as much coverage since it will cost more.

When deciding how much insurance to buy, consider the worst-case scenario and ensure that you have enough coverage to protect yourself from unexpected costs. 

When you are ready to purchase, research and compare policies from different insurers to find the best deal. You can also look for special discounts or incentives that may be available in your area. With careful planning and consideration, you’ll be able to find the right car insurance policy for your needs.

Fill Out an Application and Save Different Car Insurance Quotes

Once you’ve collected a few quotes, the next step should be to complete an application. Doing so will inform the insurance company of your driving experience, credit score, and other relevant information. 

When filling out the form, read all the terms and conditions carefully to know what coverage is included in the policy. Once everything has been filled out and submitted, you can save different car insurance quotes for comparison purposes. 

Before committing to any policy, ensure it meets your needs and budget while providing adequate protection against accidents or losses caused by theft or vandalism. For example, consider adding comprehensive coverage to your policy if you live in an area prone to natural disasters.

Once you have purchased a car insurance policy, keep all the documents and information related to the policy safe for future reference. It’s also wise to keep copies of any correspondence with the company if you need proof of coverage or need to submit a claim. Additionally, remember that car insurance rates can change over time, so review your policy periodically and update it as needed. 

Choose High Coverage Limits While Staying Within Your Budget

When buying car insurance, it’s important to choose coverage limits that provide you with enough protection against unexpected costs. 

For example, suppose you have a high car insurance deductible or low coverage limit and get into an accident. In that case, you may be responsible for paying a large portion of the damages out-of-pocket. But, on the other hand, if your coverage is too high, it will significantly increase your car insurance premiums. 

To find the right balance between cost and coverage, consider getting quotes from different insurers and comparing their rates. This way, you can find an insurance policy that meets your needs while staying within your budget. 

It’s important to mention that insurance companies usually offer different tiers of coverage. For instance, they may offer basic liability and a higher tier coverage, including comprehensive and collision coverage. 

Buying car insurance isn’t just about meeting your minimum state requirements. It’s to protect you in the event of a car accident. If your coverage limits are too low,  you could end up paying for damages out-of-pocket even if you’ve kept regular payments up until your accident. Therefore, choosing coverage limits high enough to protect you and your car in case of an accident or theft is recommended. 

Take a Deep Look at Different Insurance Companies

Next, when shopping for car insurance, it’s important to take a deep look at different insurance companies to make sure you find one that is reliable and trustworthy. Car insurance companies have different reputations in the industry, so you will want to do your due diligence. Read online customer reviews and check out the company’s financial ratings. 

This will indicate how financially secure the insurer is and how likely they are to be able to pay out claims if needed. You should only assume that an insurance company will pay your claim if you have done your research.

When looking for car insurance, also consider any customer service or support offered by the company and their response time on filing claims. 

Make the Right Decision

Finally, once you’ve done your research and have found the right car insurance policy that meets your needs, it’s important to make sure that you are making an informed decision. 

Understand what the policy covers and read through documents before signing on the dotted line. You want to avoid being surprised later if your car insurance policy doesn’t cover a certain type of incident or damage. 

You must feel comfortable with the insurance company before signing up with them since this relationship could be beneficial in the long run. This way, you can rest easy knowing that the company will protect your car after a car accident. 

How long does it take to buy insurance?

The amount of time it takes to buy car insurance can vary depending on the insurer and your location. But, generally speaking, it should take anywhere from a few minutes to a few hours. 

Sometimes, you can purchase a policy online or over the phone with an agent in minutes. However, it might take longer if you opt for more comprehensive coverage or need additional documents from your state’s DMV or other third-party organizations. 

Typically, you can expect the process to take between one day and several weeks, based on your individual circumstances. 

When purchasing car insurance, it’s important to research and find the right coverage for your needs since this could save you money and give you peace of mind in the event of an accident.

Why do first-time drivers pay more for car insurance?

First-time drivers typically pay more for car insurance than experienced drivers because they are considered high-risk customers. Insurance companies assess the likelihood of a driver getting into an accident and base their premiums on this risk assessment. 

Insurance carriers often assume that first-time drivers have less experience behind the wheel and thus may be more prone to accidents than those with many years of driving experience. In general, first-time drivers can expect to pay higher premiums to offset the additional risk the insurer takes.

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What are some ways to save money on car insurance?

The best way to save money on car insurance is to shop around for car insurance and compare rates from different companies. Unfortunately, premiums can vary drastically from one insurer to the next, so it pays to do your homework before committing. 

It would help if you also considered any car insurance discounts available based on your age, driving record, or other criteria, such as military service or having a home security system. Many insurers also offer special programs for young drivers to help reduce costs. 

Another great way to save money on car insurance is by increasing your deductible amount. Doing this means you will pay more upfront if you need to make a claim, but it could result in lower premiums over time. 

Finally, consider bundling your auto and home insurance policies with the same company for additional savings.

Case Studies: Navigating Car Insurance for First-Time Drivers

In navigating the complexities of car insurance, first-time drivers often encounter various decisions regarding coverage, budget considerations, and the choice between direct purchases and broker assistance. Three case studies illuminate different strategies adopted by individuals in managing their insurance needs.

• Case Study #1– Balancing Coverage and Budget: Emily, a recent college grad, faces the dilemma of choosing between a basic liability policy and full coverage for her first car. With the help of an insurance broker, she opts for a comprehensive policy tailored to her needs and budget, balancing coverage and expenses.
• Case Study #2–  Direct Purchase vs. Broker Assistance: Jake, an entrepreneur, debates between buying insurance directly online or seeking assistance from a broker. After initially exploring online options, he turns to a broker for guidance in simplifying the process and securing a policy that suits his needs.
• Case Study #3–  Bundling for Savings: Sarah, a professional, considers bundling her auto and home insurance policies to maximize savings. After researching options and providers, she consolidates her policies with one insurer, benefiting from both streamlined management and significant cost savings through bundled policy discounts.

This underscore the importance of informed decision-making and seeking professional guidance when navigating car insurance for the first time, ultimately ensuring both adequate coverage and financial prudence.

By staying informed and seeking tailored solutions, first-time drivers can confidently navigate the complexities of car insurance, ensuring both protection and financial peace of mind on the road ahead.

The Bottom Line: Buy Car Insurance the Right Way as a First-Time Driver

Buying car insurance can be daunting and confusing at first. However, with a bit of research, due diligence, and comparison shopping, you’ll be able to find the right coverage for your needs without breaking the bank.  

Remember to review your policy periodically and take advantage of any discounts that may be available. With these tips in mind, you’ll be ready to hit the road safely and confidently.

Finding cheap car insurance quotes is easy. Just enter your ZIP code into our free comparison tool below to instantly compare quotes near you.

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