A former insurance producer, Laura understands that education is key when it comes to buying insurance. She has happily dedicated many hours to helping her clients understand how the insurance marketplace works so they can find the best car, home, and life insurance products for their needs.

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products, including home, life, auto, and commercial, and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, mainly in the insuranc...

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Reviewed by Leslie Kasperowicz
Farmers Insurance CSR 4 Years

UPDATED: Oct 18, 2021

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Important facts to know...

  • When you are 21, there are some specific things to know about auto insurance coverage
  • You are still in the high-risk range (18-24) but there are some factors you can control
  • Shop around and see if you may qualify for discounts and learn the ways to reduce your premiums

If you have been on your parents’ car insurance and have purchased your vehicle or need your insurance for any reason, it’s a good idea to do some checking around before you buy.

While there is no specific insurance for drivers over 21, there are some important things to keep in mind as you are shopping. Comparison shop today using our free tool.

Insurance for High-Risk Drivers

If you are 21 and you are shopping for insurance, you should know that you are in one of the highest-risk groups for auto accidents.

We don’t say this to scare you but because you need to understand that people in the 18-24 age range are considered the highest-risk group, while males in this age group having a slightly higher risk than females.

The gap between males and females in this age range has been much wider in the past, but girls are catching up lately due to driving more often and engaging in risky behaviors and distractibility actions such as texting and chatting while driving.

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How Insurance Companies Decide on Premium Rates

Insurance companies base your premium rate on some different factors. They all focus on the level of risk that you represent for accidents.

This is the way that all types of insurance work. One of these factors they consider is your age group. You cannot do anything about this.

The 18-24 range is the highest risk group for age. If you are over 21 but under 24, then you are still considered in the high-risk range.

However, there are some other factors that insurers use to determine your rate.

  • Driving record– The single most influential factor that affects your premium rate is your driving record. Even if you are a new driver or have only been driving for a few years, your driving record is the most influential factor in your rates.
  • Credit report– Insurance companies like to see a good credit rating. It raises their level of trust in you and lets them know you will pay your premiums.
  • School status– Another factor that insurance companies consider is your school status. If you are currently in school, you may even be eligible for a discount.
  • Defensive driving course certification– Some insurance companies offer discounts for going through a defensive driving course. This is because people who have gone through this type of program have fewer accidents in general than those who do not.

These are just a few of the different factors that insurance companies use that can influence your premiums. Since you are in the highest-risk group, you may want to look into some of the discounts to see what you may qualify for.

Types of Required Coverage

Once you have an idea of the type of auto insurance company you want to deal with, you should make sure that you have the minimum coverage amounts that your state requires. You can find out what your state minimums are at your state insurance site.

If you cannot find the information you need, feel free to ask questions as you are shopping for insurance.

Asking the right questions is one of the most important things you can do to make sure you get what you need and have the right auto insurance coverage.


Types of Coverage

There are many types of coverage you should consider when you are shopping for car insurance. Many of the most common types are listed below.

  • Bodily injury liability – Bodily injury liability is required by every state that requires insurance. This, along with property damage liability, is the type of insurance that you are required to carry proof of in your vehicle at all times. You should make yourself familiar with the required minimums of your state before you purchase insurance.
  • Property damage liability – Property damage liability covers the damage that you may cause to other drivers’ cars if you are in an accident for which you are found “at fault.” You need this insurance to avoid a lawsuit from drivers who charge that you were negligent.
  • Collision – Collision insurance covers your car no matter who is at fault. When you have this coverage on your auto insurance policy, you can rest assured that your car will be repaired if it is damaged.
  • Comprehensive – Comprehensive coverage insurance covers things that your accident insurance does not cover. It is optional insurance so you should make sure and ask for it or look for this coverage on your online application. Comprehensive insurance covers theft, vandalism, “acts of nature,” and other incidents.
  • Uninsured/underinsured – This type of insurance covers liabilities and damage to others or yourself if the other driver was uninsured or underinsured. It is not usually required, but some states do require it.
  • Medical payments – Medical payment coverage covers you for medical treatments, medications, or procedures that result from an accident. It can be combined or add onto your current medical insurance and may help you pay medical bills that other coverage does not cover. In some cases, it may cover time out of work as well.
  • Other optional coverages – There are many other coverages such as roadside assistance and other types of coverage. Ask your insurance agent what types of optional coverage they offer when shopping for insurance.

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21-Year-Old Premium Rates

There is a bit of good news regarding your 21st birthday. An insurance site recently published a blog article that is interesting about 21-year-olds.

Even though you are still in the highest-risk age group until age 25, if you have kept your insurance current and not had any accidents, your insurance may go down slightly once you turn 21.

There are also some new things you can do to decrease your insurance premiums each month. Here are a few ideas that may help you reduce your monthly premiums and keep your insurance at a reasonable rate.

  • Telematics insurance – Telematics insurance is insurance that is based on how you drive. It uses a “black box” that measures the way you drive over time and estimates the risk of your driving behavior. It calculates the mileage and speed that you drive and estimates the risk based on these factors.
  • Short term insurance for 21-year-olds – If you can’t find permanent insurance that you are happy with, one temporary fix to this issue is to find temporary insurance while you are between auto policies or deciding on a more permanent policy.
  • Car insurance groups – One thing you may not know is that vehicles are put into certain car insurance groups based on their level of security, the cost of repair, and other factors. If you want to save money on your premium, check with your vehicle manufacturer to see which group your car fits into.

The best thing you can do to decrease your premiums is to compare companies and ask the right questions. Keeping your driving record clean will help, and there are strategic things you can do to reduce your rates.

Compare quotes today by using our free rate tool.