Best Car Insurance Companies
How Much Is Car Insurance?
Here’s a look at car insurance rates based on averages nationwide among the largest insurance companies.
|Type of driver||Average annual rate|
|For good drivers||$1,569|
|Driver who caused an accident with property damage||$2,272|
|Driver who caused an accident with an injury||$2,304|
|Driver with one DUI||$2,623|
|Driver with one speeding ticket||$1,947|
|Driver with poor credit||$2,876|
|Driver caught without insurance||$1,822|
ates are based on a female driver, age 30, insuring a Toyota RAV4 with liability coverage of 100/300/100 and collision and comprehensive insurance. Averages are based on rates from 11 large auto insurance companies.
How Can I Find the Best Price on Car Insurance?
Once you decide how much car insurance you need, it’s time to start shopping for a policy. Rates often vary widely among companies for the exact same coverage, so it’s smart to compare car insurance quotes from multiple insurers. For example, in California, rates for a good driver range from $1,668 (Wawanesa) to $3,940 (The Hartford)—a range of about $2,270 for the exact same driver.
If you don’t shop around you won’t know if your rates are on the high end. You can find free quotes online or by working with an auto insurance agent. Independent insurance agents can provide quotes from multiple companies.
Insurance quotes are always free.
What Types of Car Insurance Discounts Should I Look For?
Ask about car insurance discounts when you’re getting car insurance quotes. You can typically knock down your car insurance costs with discounts for:
- By “bundling” multiple insurance policies from the same company, such as auto and home insurance.
- Insuring more than one vehicle with the same company.
- Qualifying for a good driver discount.
- If you have a student on the policy, getting a discount if they’re a good student
- If you have a college student on the policy, snagging a discount if they’re away at school without a car (usually must be at least 100 miles away).
- Taking a defensive driving class if you are age 55 or older.
- Paying your car insurance bill in full for the term rather than monthly.
What Types of Car Insurance Are Required?
Here are types of car insurance that are generally required by states.
Liability insurance: Required in most states. Car liability insurance pays for injuries and property damage you cause to others. A good rule of thumb is to buy enough liability insurance to cover what can be taken from you in a lawsuit.
Uninsured motorist coverage (UM): Mandatory in some states and optional in others. Uninsured motorist insurance pays for you and your passengers’ medical bills and other expenses if someone crashes into you and they don’t have any liability insurance. A related coverage, underinsured motorist coverage, helps with you and your passengers’ medical bills when a driver with insufficient coverage causes an accident resulting in injuries.
Collision and comprehensive insurance: Required if you have a car loan or lease. These are two separate coverage types often sold together. Collision and comprehensive insurance pay for your vehicle repair bills due to problems such as car accidents, car theft, fires, floods, severe weather, falling objects, vandalism and collisions with animals.
Personal injury protection: Required in some states. Some states use a no-fault car insurance system. In these states you’ll make smaller injury claims on your own auto insurance no matter who was to blame. These claims fall under personal injury protection, which is required in no-fault states and available in some others.
Other Types of Auto Insurance to Consider
Sometimes getting the best car insurance means adding extra coverage in order to get more protection or guard against unexpected out-of-pocket expenses. Here are some other auto insurance types to consider.
Accident forgiveness. Raising your car insurance rates after you cause an accident is standard operating procedure for car insurance companies. If you get “accident forgiveness” coverage from your insurer, you can escape a rate increase after your first at-fault accident. Some insurers go a step further and also “forgive” a moving violation, such as a speeding ticket.
Gap insurance. Do you have a large car loan balance or lease? If your car is totaled, the insurance payout for the vehicle could be much less than your balance. Gap insurance pays the difference.
New car replacement. If you’re the unlikely driver who totals your new car, this coverage can help. It will pay to replace your car with a similar new car, rather than compensating you only for the depreciated value of your car. New car replacement coverage rules can vary among insurers for what qualifies as a “new” car so check the details.
Pay-per-mile insurance. If you drive very little, pay-per-mile auto insurance could be a good bet for you. Part of your premium hinges on exactly how many miles you drive each month. The other part, called the base rate, doesn’t change from month to month.
SR-22 insurance. An SR-22 is definitely not something you want, but you may need an insurer that provides it. Your state could require you to obtain an SR-22 form to prove that you have auto insurance. Your insurance company needs to send this form to the state to verify you have coverage, but not all insurers perform this service. You might end up with an SR-22 requirement if, for example, you rack up a lot of moving violations or you cause an accident while driving uninsured.
Usage-based insurance. This type of policy has the potential to reduce your car insurance bill if you’re a really good driver. This typically means no speeding, hard braking, hard cornering and other factors. Usage-based insurance (UBI) programs use either an app or a device that plugs into your car to track your driving habits.
But don’t count on savings from usage-based insurance. Less than half (48%) of drivers who opt into a usage-based insurance program actually see savings, according to TransUnion’s 2022 Insurance Trends and Outlook Report. Premiums stayed the same for 30% of drivers using UBI.
Vanishing deductibles. If you have a collision or comprehensive insurance claim, your insurance check will be reduced by your deductible. Some auto insurers take the sting out of deductibles by offering a vanishing deductible. Generally this means a set reduction (such as $100) for every year you don’t make a claim.
Factors That Impact the Cost of Car Insurance
Your car insurance cost will vary depending on several factors that include:
- Your driving record
- Your age and driving experience
- Where you live
- Coverage selections
- Deductible amount (if you buy collision and comprehensive coverage)
- Vehicle model
- Your car insurance history
- Your credit-based insurance score (use of this in car insurance costs is banned in California, Hawaii, Massachusetts and Michigan)
The Insiders’ View of Car Insurance Claims
If you’re lucky, you’ll have very little experience with collision repairs. That also means you won’t necessarily know if you’re getting superior claims service compared to other insurers.
Collision repair professionals have the advantage of dealing with insurers daily and seeing which companies try to cut corners on claims, and which companies have processes that slow down the repair process.
For this reason we incorporated grades of insurance companies from collision repair professionals, supplied by CRASH Network.
“Drivers pay their auto insurance premiums every month, yet they only find out how well that insurer will take care of them when they file a claim—which happens about once a decade for the average driver,” says John Yoswick, editor of CRASH Network, which has a weekly newsletter covering the collision repair and auto insurance market segments.
“But auto body repair shops see every day which insurance companies prioritize cost-savings by pushing to use the cheapest parts and repair methods, and which insurers take better care of their policyholders by prioritizing repair quality and the use of automaker-recommended repair methods and parts,” he says.
CRASH Network produces an annual Insurer Report Card that gives insight into insurers’ claims processes that others don’t see. Auto body repair professionals across the country are asked, “How well does this company’s claims handling policies, attitude and payment practices ensure quality repairs and customer service for motorists?”
“This knowledge gives body shops a unique perspective on which insurance companies consistently earn an ‘A’ when it comes to customer service and a proper repair for their policyholders, and which insurers deserve a ‘C’ or ‘D,’” says Yoswick.
Among 75 insurers scored by CRASH Network, only North Carolina Farm Bureau, Chubb, Erie and Michigan Farm Bureau received grades in the “A” range.
More About Geico Car Insurance
Geico sells insurance for cars, motorcycles and classic cars. For those who enjoy a little more adventure, Geico also sells insurance for RVs, ATVs and boats.
Optional coverage types for auto insurance includes emergency road service, rental reimbursement and mechanical breakdown insurance.
If you’re concerned about a rate increase after an accident, Geico offers accident forgiveness insurance, which you can pay to add to your policy or earn by maintaining a clean driving record. Geico will waive the first at-fault accident caused by an eligible driver listed on your policy.
Geico also sells Mexico auto insurance if you plan to drive south of the border.
Geico Car Insurance Discounts
Geico offers many discounts, especially for drivers who practice safe driving habits. If you’re in the military or are part of an emergency deployment, you could receive between 15% and 25% off your policy. And, if you’re a loyal customer, you can benefit from the multi-vehicle discount or the multiple policy discount. Other auto insurance discounts include:
- Vehicle equipment discounts: Does your car have some of the latest safety features such as side airbags or full front-seat airbags, anti-lock brakes or an anti-theft system? If so, you could save up to 40% off the medical payments or personal injury protection portion of your policy.
- Discounts for driving history and habits: If you have a good driving record and are accident-free for five years you can receive up to 26% off most coverages. Also, if you and your passengers wear seat belts, you can save up to 15% off the medical payments or personal injury protection portion of your policy.
- Driving course discounts: If you complete a defensive driving course, you can save on your premium.
- Drivers education discount: If you have a young driver on your policy who completes a driver’s education course, you may be eligible for discounts on most of your coverage types.
- Good student discount: For drivers who are between age 16 and 24 and enrolled in school full-time, you might be able to receive a discount if they get a B average or better.
- Federal employee discount: Whether you’re an active or retired federal employee, you can receive up to 8% off of your auto insurance premium.
- Membership and employee discounts: Geico has partnered with more than 500 alumni associations, fraternities and sororities, and professional organizations to offer discounts to its members.
- Military discount: For those who are on active duty, retired from the military, or a member of the National Guard or Reserves, you might be eligible for a discount of up to 15% on your total car insurance premium.
- Multi-vehicle discount: You can save when you insure two or more vehicles with Geico.
- Multi-policy discount: You can save when you bundle your auto insurance with other types of insurance you buy through Geico, such as homeowners, condo, renters or mobile home insurance. While Geico itself does not underwrite these other insurance types, they are available through the Geico agency.
More About Nationwide Auto Insurance
Nationwide sells insurance for cars, classic cars, RVs, motorcycles, ATVs, scooters, golf carts and boats. For winter-fun enthusiasts, Nationwide sells insurance for snowmobiles.
For drivers concerned about paying a high deductible in the event of an accident, Nationwide offers a vanishing deductible. Every year you go without an accident, you can earn $100 off your deductible, up to $500 total.
Nationwide also offers accident forgiveness, which helps drivers avoid a rate increase due to an at-fault accident. While you have to pay to add this coverage to your policy, it can help offset the premium increase that typically applies after an at-fault accident.
Nationwide’s Pay-Per-Mile and Usage-Based Auto Insurance
Nationwide has two options for customers looking to reduce their car insurance bills through low mileage or superior driving skills.
For low-mileage drivers, Nationwide offers SmartMiles, which provides the same coverage as a traditional Nationwide auto insurance policy but largely bases your premium on the actual mileage driven. Your rate consists of two components: a base rate and a variable rate (the cost per mile). Since your variable rate is determined by how much you drive, your monthly rate will vary month-to-month.
Nationwide also offers savings potential with its SmartRide usage-based insurance program. When you sign up you can earn up to 10%. Then, if your driving habits are good enough, you could earn up to 40% off your auto insurance.
Nationwide Auto Insurance Discounts
Nationwide offers several discounts, especially for drivers with safe driving habits. If you have a driver in high school or college, look for Nationwide’s discounts for good students.
Other car insurance discounts from Nationwide include:
- Multi-policy discount: You can save on both your home and auto insurance policies when you bundle them together.
- Accident-free and safe driver discounts: If you have a clean driving record you could receive a discount.
- Defensive driving discount: This is a discount for completing a state-approved safety course.
- Good student discount: If you have a young driver between the age 16 to 24 who has a “B” average or better in high school or college, you could be eligible for savings.
- Anti-theft discount: Ask about this discount if your vehicle is equipped with certain anti-theft devices.
- Easy pay sign-up discount: This is a one-time discount for setting up an automatic payment from your bank.
- Paperless discount: You can get a discount for receiving your insurance documents and bills electronically.
More About Travelers Car Insurance
Travelers sells car, boat and yacht insurance (for those who prefer traveling via water). Optional auto insurance add-ons include roadside assistance coverage and rental reimbursement coverage.
For drivers who want to protect a vehicle when it’s financed or leased, Travelers offers loan/lease gap insurance. If your vehicle is totaled, this coverage can pay your the difference between the actual cash value of the car and the remaining balance of your loan or lease.
Travelers Car Insurance Discounts
Travelers offer many possible discounts. If you enjoy getting ahead of your bills, look for EFT and pay-in-full discounts. Travelers’ car insurance discounts include:
- Multi-policy discount: If you bundle your auto insurance with other types of insurance (like homeowners insurance) you can save up to 13% on your auto insurance policy.
- Multi-car discount: This is a discount for customers who have multiple cars on one auto insurance policy.
- Homeownership discount: Do you own a home or condo? If so, you can save up to 5% off your auto insurance.
- Safe driver discount: For drivers with no accidents, violations or major comprehensive claims for the past three years, you could save up to 10%, or up to 23% for the past five years.
- Continuous insurance discount: Drivers who have no gaps in auto insurance coverage could save up to 15%.
- Hybrid or electric vehicle discount: Ask about this if you own or lease a hybrid or electric car.
- New car discount: You could save up to 10% for owning a newer model car that’s three years old or less.
- ETF, paid in full and good payer discounts: You could receive discounts up to 15% for setting up automatic payments, paying in full or always paying on time.
- Early quote discount: If you get a Travelers auto insurance quote before your current policy with another company expires, you could save between 3% and 10%.
- Good student discount: Do you have a high school or college student on your policy who maintains a “B” average or better? If so, you could qualify for an 8% insurance discount.
- Student away from home discount: If you have a college student on your policy who goes to school at least 100 miles away and won’t be driving your cars, you could save up to 7%.
- Driver training discount: In an effort to encourage young drivers to work on their driving skills, Travelers offers up to 8% off if your young driver takes a qualified training course.
More About USAA Car Insurance
USAA sells insurance for cars, motorcycles, ATVs, motorhomes, boats and classic cars. And, for those who fly to their destinations, aviation insurance. Optional coverage types include roadside assistance and rental reimbursement.
Current and former U.S. military members, and spouses and children of U.S. military members are eligible for USAA insurance.
For drivers concerned about a rate increase after they cause an accident, USAA offers accident forgiveness insurance. If you remain accident-free for five years, your premium won’t go up after one at-fault accident.
USAA also offers rideshare coverage for drivers with Uber, Lyft and other services.
USAA Auto Insurance Discounts
If you’ve had USAA auto insurance for a few years, you can benefit from “length of membership savings.” And if you add auto insurance to a USAA homeowners or renters insurance policy, you could save up to 10%. Other USAA car insurance discounts include:
- Safe driver discount: Do you have a clean driving record for the past five years? If so, you could save money.
- Defensive driver discount: This is a discount for taking an approved course to improve your driving skills.
- Driver training discount: Are you younger than age 21? Drivers under 21 can take a basic driving course and save money on their USAA auto insurance policies.
- Good student discount: Ask about this discount if your high school or college-age child maintains good grades.
- New vehicle discount: For cars that are three years old or newer, you can qualify for this discount.
- Multi-vehicle discount: Look for this price break if you have two or more vehicles on a policy.
- Annual mileage: Based on the number of miles you drive per year, you may qualify for a discount.
- Vehicle storage: When you store your vehicle, you can save up to 60% on your auto insurance. This is especially useful for military members on deployment.
- Family discount: If your parents have USAA insurance, you can save on your premium.
- Military installation discount: When you garage your car on the base you could save up to 15% on comprehensive coverage.
- Length of membership savings: Look for this discount if you maintain coverage with USAA for several years.
More About Auto-Owners Car Insurance
Auto-Owners sells vehicle insurance for cars, ATVs and off-road vehicles, motorcycles, trailers, and boats. For those who enjoy exploring the nation in a motorhome, Auto-Owners sells motorhome and RV coverage.
Optional add-ons include roadside assistance coverage, additional expense coverage, and lease or loan gap coverage. If you choose to purchase the Personal Automobile Plus Package from Auto-Owners, you’ll receive 10 other coverage add-ons including identity theft protection, re-keying locks and cell phone replacement.
Auto-Owners also sells “diminished value” coverage. With this coverage, you receive compensation if you’re in an accident and the damage depreciates the value of the vehicle even after it’s repaired.
Auto-Owners Insurance customers may be eligible for a few additional benefits, including “collision coverage advantage.” With this benefit, your collision deductible is waived if you’re in an accident with another vehicle insured by Auto-Owners Insurance.
Auto-Owners Car Insurance Discounts
Auto-Owners offers several discounts, especially for students. If you have a young driver who’s in school, look for Auto-Owners discounts for good students and students away at school. If you’re passionate about saving the environment, you can benefit from the green discount. Other discounts include:
- Multi-policy discount: If you have other policies (such as a home insurance policy) with Auto-Owners, you can qualify for a discount on your auto policy.
- Payment history discount: You can receive a discount if you paid your policy on time for the last 36 months.
- Green discount: You’ll be eligible for this discount if you go paperless and pay your bill online.
- Life multi-policy discount: You can receive this discount if you bundle a qualified life insurance policy with your auto policy.
- Paid-in-full discount: You’ll be eligible for this discount if you pay your annual premium in full and on time.
- Advance quote discount: This discount is for new customers who request a quote before the effective date of their policy.
- Multi-car policies: You can get a discount if you insure two or more cars under the same policy.
- Safety features discounts: If you have safety features installed in your car like airbags or anti-lock brakes, you could qualify for a discount.
- Good student discount: You may be eligible for up to a 20% discount if your high school or college-age driver maintains at least a “B” average.
- Student away at school discount: If your student is attending a school at least 100 miles from home and without a vehicle, you may qualify for a discount.
- Teen driver monitoring discount: Ask about this if your car has a permanently installed GPS.
More About State Farm Car Insurance
State Farm is currently the largest auto and home insurer in the U.S. It sells vehicle insurance for cars, motorcycles, RVs, off-road vehicles and boats. For those who have antique and classic cars, State Farm provides coverage for vintage vehicles.
State Farm Auto Insurance Discounts
Whether you’re a safe driver or have multiple vehicles under one policy, you might be able to save on State Farm auto insurance rates.
- Safe driver discount: Whether you maintain an accident-free driving record or educate yourself on best driving practices, you could receive a discount. For example, if you take a defensive driving course or have gone three years without a moving violation or at-fault accident, you could be eligible for a discount.
- Accident-free discount: If you drive three consecutive years without an accident, you may qualify for a discount.
- Good student discount: Do you have a full-time student on your policy who has a B average or better? If so, you could save up to 25%. And the discount can stay with your student ever after graduation (until they reach age 25).
- Student away at school discount: If a driver in your household is under age 25 and moves away to school, you could qualify for a discount.
- Safe vehicle discounts: For drivers who have newer vehicles with the latest safety features, State Farm offers insurance rewards. For example, if your vehicle was made in 1994 or after (depending on the make and model of the car), you could save up to 40% on medical-related coverage.
- Anti-theft discount: You could get a discount if your car has an alarm or other type of anti-theft device.
- Multi-vehicle discount: Look for this if two or more cars in your household are insured by State Farm.
- Multi-policy discount: You can save by bundling other types of insurance with your auto insurance, such as homeowners, renters, condo or life insurance.
- Loyal customer discounts. Customers who insure more than one vehicle or have other insurance types could land a loyalty discount. For example, drivers who insure at least two vehicles on the same policy could save as much as 20%, and drivers who bundle home, condo or life insurance with an auto insurance policy could save up to 17%.
- Defensive driving course discount: If you complete an approved defensive driving class, you could earn a discount around 10% to 15%.
- Driver training discount: Ask about this if your young driver (under age 21) completes a driver training course.
More About Allstate Car Insurance
Allstate sells vehicle insurance for cars, motorcycles, classic cars and boats. For those that enjoy the outdoors and adventure, Allstate also offers coverage for ATVs and RVs.
Optional coverage that can be added to an Allstate policy include roadside assistance, rental reimbursement and sound system insurance. Allstate also offers add-on coverage of gap insurance, new car replacement and diminishing deductible.
Gap insurance helps if your car is totaled in an accident and you owe more than the vehicle’s value. Alllstate’s new car replacement coverage will pay to replace your car with a new car of the same make and model if it is two model years old or less and totaled in an accident covered by your policy. And enrolling in the diminishing deductible gets you $100 off your collision deductible immediately, and if you remain claim-free you can continue to reduce your deductible each year, up to a maximum of $500 off.
Allstate Auto Insurance Discounts
Allstate offers a variety of car insurance discounts, particularly for safe drivers. Teen drivers and their parents can take advantage of discounts such as the smart student discount and teenSMART driver education program. Car features like anti-lock brakes and anti-theft devices can also result in discounts. Other discounts include:
- Early signing discount: If you sign up for your policy seven or more days before the start date, you could receive a discount.
- Responsible payer discount: You can qualify for a reduction if you haven’t received a cancellation notice within the past year.
- Multiple policy discount: You’re eligible if you have more than one Allstate policy, such as auto and homeowners insurance.
- New car discount: If you’re the first owner of a current model year car or one year prior, you can receive this discount.
- Anti-lock brake discount: Driving a car with anti-lock brakes can save you money on your auto insurance.
- Anti-theft discount: The discount may be applied if you have an anti-theft device in your car.
- Allstate eSmart discount: Save by signing up for an ePolicy and going paperless.
- FullPay discount: Receive a discount when you pay your annual premium in full.
- EZ plan pay discount: Receive a discount by setting up an automatic payment plan.
- Safe driving club discount: Your driving may qualify you for the safe driving club and earn you a discount.
More About Erie Car Insurance
Erie’s vehicle insurance is available for cars, motorcycles, recreational vehicles, classic cars and boats. You can also purchase insurance for snowmobiles, RVs, ATVs and golf carts. Optional add-ons include:
- Roadside service
- Transportation expenses and rental car coverage
- Lease loan protection
- Ridesharing coverage
For drivers who recently purchased a new car, Erie sells new car protection. With this coverage, your car will be replaced with the latest model if it’s deemed a total loss due to an accident covered by your policy. Erie also offers “better car protection” that pays to replace your vehicle with a car two years newer.
Erie Auto Insurance Discounts
Erie offers several auto insurance discounts, especially for safe drivers. If you have a driver under age 21on your policy, look for Erie’s discount for young drivers. If you don’t use your car for an extended amount of time, you could benefit from the reduced usage discount. Other discounts include:
- Safe driving discount: This is for safe drivers with a clean driving record.
- Car safety equipment discount: You can get a discount if your car has safety features like factory-installed airbags, passive restraint, or anti-theft devices.
- Multi-car discount: Drivers who insure two or more vehicles under the same policy may be eligible for this discount.
- Multi-policy discount: Look for this if you bundle other insurance types (like homeowners insurance) with your Erie auto insurance.
- Reduced usage discount: If you don’t use your car for at least 90 consecutive days during your policy period, you could be eligible for this discount.
- Young driver discount: Do you have a driver who is under age 21, unmarried and lives with you? If so, you could save on your auto insurance policy.
- Annual payment plan: Look for savings if you pay your annual auto premium in one lump sum.
- College credit: If your college driver is away at school without access to your car, you may be eligible for a discount.
Best Auto Insurance Companies by State
|State||Cheapest company for good drivers||Average annual rate|
|Louisiana||Louisiana Farm Bureau||$2,438|
|Mississippi||Direct General Insurance||$1,026|
|Nebraska||Farmers Mutual of Nebraska||$1,368|
|New Jersey||Plymouth Rock||$1,160|
|South Carolina||American National||$721|
|Texas||Texas Farm Bureau||$1,035|
The average annual rate is based on large insurers in each state for liability coverage of 100/300/100, uninsured motorist coverage and collision and comprehensive insurance for a Toyota RAV4.
Complaints Against Auto Insurance Companies
Complaints collected nationwide against car insurance companies reveal problem spots for some insurers. The National Association of Insurance Commissioners calculates a complaint ratio for each company that reflects the number of complaints in relation to the insurer’s business size.
Survey: 48% of Consumers Think Car Insurance Rates are Fair—Except for the Particulars
Car insurance rates have been steadily rising for decades, except for a sharp dip in 2020, when auto insurance companies offered refunds and credits in order to provide financial relief for customers dealing with pandemic-related income drops and to account for the deep reduction in driving.
Over the years, spiking medical costs and increasingly expensive car repairs have conspired to continually push up what we pay for car insurance. But for the most part, consumers think that auto insurance rates are fair or have no strong feelings about them. A new survey by YouGov for Forbes Advisor found that 48% of adult Americans think that car insurance rates are “fair” or “very fair.” Another 18% are on the fence, judging rates to be neither fair or unfair.
Of the 31% who judge car insurance rates to be “unfair” or “very unfair,” half (50%) nonetheless took no action in the last 12 months to seek a solution. About one-third say they at least got an insurance quote from a different company, and 11% switched companies. A notable portion (12%) say they reduced their overall auto insurance coverage in the last 12 months.
While almost half of Americans think car insurance rates are fair, a closer look under the hood reveals that “fairness” quickly drops when people are asked about specific pricing factors that are commonly used in setting car insurance rates.
Use of Credit? 69% Don’t Like It
For example, 69% of survey respondents didn’t think that a driver’s credit score should be used in auto insurance rates, yet many insurers put significant weight on credit-based insurance scores when setting prices.
Insurers say they can correlate poor credit with the chances that a person will make auto insurance claims. Although insurance rates are regulated by each state’s department of insurance, states generally allow pricing factors like credit when insurers can show a connection to higher claims. Only California, Hawaii, Massachusetts and Michigan ban the use of credit in auto insurance rates.
When Washington state’s insurance commissioner put a ban on the use of credit for insurance rates earlier this year he was immediately hit with pushback from the insurance industry and a lawsuit. But the ban on credit ultimately prevailed, taking effect June 20.
Because the use and extent of credit in rates can vary considerably among insurers, a driver with poor credit could especially benefit from shopping around.
Auto Insurance Rate Increases Because of Poor Credit
|Company||Average rate increase nationally due to poor credit|
Education Level? 67% Say It’s a Fail
Many auto insurance companies give education-related discounts, rewarding drivers who have achieved a bachelor’s or master’s degree or Ph.D. But 67% of survey respondents don’t agree that education level should be a factor in car insurance rates.
Still, 21% supported the idea. Insurers might include education level in rates when they’ve drawn a connection between an advanced degree and lower claims.
Use of Occupation? Maybe
While using credit or education level in auto insurance pricing was contentious, the use of occupation wasn’t as controversial: 44% didn’t believe a driver’s occupation should affect rates, but 36% thought it was OK.
Like other pricing factors that aren’t about actual driving, some insurers give discounts for certain occupations. For example, lawyers, doctors and educators may be able to score lower rates.
Monitoring Actual Driving? People Are Divided
Usage-based auto insurance, which utilizes actual driving data in rates, could reduce reliance on non-driving price factors such as education. Using telematics, these insurance programs monitor and score actual driving such as speeding, braking and cornering.
About half (51%) of survey respondents said they’d be “very comfortable” or “somewhat comfortable” with having their driving closely monitored if it could lead to lower car insurance rates. A smaller portion (44%) had reluctance, expressing discomfort with such oversight.
So while auto insurance companies seek more precise ways to price individual “risk,” drivers may find fewer and fewer options that don’t use highly personalized measurements.
YouGov polled 2,000 U.S. adults. The survey was conducted on June 24, 2021. The survey was carried out through YouGov Direct. Data is weighted by age, gender, education level, political affiliation and ethnicity. Results are nationally representative of adults in the United States. The margin of error is 3.0%.
To identify the best car insurance companies we took a holistic view of each company that incorporates scores for auto insurance rates, the coverage options offered, complaints against the company, collision repair and how easy it is to understand the information on their websites.
Auto insurance rates: 50% of score. We used data from Quadrant Information Services to find average rates from each company for good drivers, drivers who have caused an accident, drivers with a speeding ticket, drivers with a DUI, drivers with poor credit, drivers caught without insurance, adding a teen driver, senior drivers and young drivers.
Car insurance coverage options: 25% of score: Any auto insurance company can provide the basics of liability insurance, collision and comprehensive coverage and other standard offerings. But it’s also important to have access to additional coverage types that can provide greater protection or cost savings. In this category we gave points to companies that offer accident forgiveness, new car replacement, vanishing deductibles, usage-based or pay-per-mile insurance, and SR-22s.
Complaints (20% of score): We used complaint data from the National Association of Insurance Commissioners. Each state’s department of insurance is in charge of logging and monitoring complaints against the companies that operate in their states. Most auto insurance complaints center on claims, including unsatisfactory settlements, delays and denials.
Collision repair (5% of score): Auto body shop professionals have an insider view of each company’s approach to repairs. The better insurers don’t apply pressure to cut costs or install lower-quality repair parts. Some insurers also have processes that help speed up repair and claims processes, making for more happy customers. We used data provided by CRASH Network, a weekly newsletter covering the collision repair and auto insurance market segments. CRASH Network’s 2021 Insurer Report Card used grades from more than 1,000 collision repair professionals to gauge auto insurers on the quality of their collision claims service.
Website readability: Bonus points. It’s important to understand the coverage you’re buying, and insurance company websites should help you do that. But many insurer websites don’t do a good job explaining the products they sell. Many insurer sites are filled with passive voice, jargon, complex words and long sentences..
Forbes Advisor asked VisibleThread to analyze the readability of insurance company websites. VisibleThread is a language analysis platform that improves the efficiency, clarity and compliance of mission-critical business writing.
Best Car Insurance Companies FAQ
What types of car insurance are required?
Most states (except New Hampshire and Virginia) require liability auto insurance, to pay for damage and injuries you cause to others.
Many states also require uninsured motorist coverage. This does not pay out to other motorists. It pays for medical bills to you and your passengers if you’re hit by someone who doesn’t have auto insurance—or not enough.
And states that have a no-fault insurance system require that car owners buy personal injury protection (PIP). PIP pays your medical bills no matter who caused the accident.
How can I find the best price on car insurance?
The main key in finding a good deal is to get car insurance quotes from multiple companies. That’s the only way you’ll know what companies are going to charge, based on your personal factors.
Another strategy is to bundle your auto insurance with another policy, such as homeowners or renters. Buying more than one policy from the same company typically results in a decent discount.
What car insurance discounts should I look for?
Discounts on vehicle safety equipment, such as air bags, are easy to get. Make sure to get a bundling discount by buying from the same company if you need more than one type of insurance policy.
Good driver car insurance discounts are common. If you have a teen or young adult driver, you may be able to get a good student discount. And you may be able to get a small discount for things you would do anyway, like going paperless by receiving insurance bills and policies electronically.
What is the best car insurance?
ValuePenguin’s top-rated national insurers are USAA, State Farm, Farm Bureau and Amica. We also recommend regional insurers NJM and Erie in the Northeast and Auto-Owners in the Midwest if you want the best combination of affordable rates, excellent service and lots of coverage options.
Who has the best car insurance rates?
State Farm is the best car insurance company with cheap rates that’s also one of the most highly rated and widely available. Minimum coverage rates from State Farm average $532 per year, and full coverage rates average $1,310. However, you may be able to find even better rates from a smaller insurance company like Erie or Concord, depending on where you live.
How can I find the best car insurance for me?
To find the best car insurance for you, figure out your budget plus how much and what kind of coverage you need. Then get quotes from top national insurers and smaller regional companies for the same level of coverage. Consider each insurer’s price, customer service ratings and coverage options. Make sure you understand what’s included with each policy, including perks and discounts.
Who has the best auto insurance near me?
USAA and State Farm have the cheapest rates in most states among the top insurers, but the best cheap car insurance in your state might be a smaller local company. That’s why it pays to compare quotes from several large and small companies near you.
How to compare the best car insurance companies
When reviewing multiple auto insurance companies, using an apples-to-apples comparison can be helpful. Knowing how to find companies that could meet your needs and how to compare those companies can be an important skill to have. While an average annual premium estimate may be a good initial indicator of how a company will stack up against others, it doesn’t provide the full story. Quotes should ideally include the same coverage levels and types, with the same personal details and vehicle information given to each company. Depending on your preferences, you may also want to review trusted third-party ratings for an additional assessment of a company’s performance, such as J.D. Power customer satisfaction ratings, the National Association of Insurance Commissioners (NAIC) consumer complaint index and financial strength grades from multiple credit rating agencies. This information can be found online, or an insurance agent can help you obtain this type of information about the auto insurers you are interested in.
Compare car insurance companies
Summary: best car insurance companies
|Company||Average annual rate (full coverage)||Who it’s best for||Bankrate Score|
|USAA||$1,209||Best overall car insurance company||5.0/5.0|
|Clearcover*||N/A||Best for digital presence||5.0/5.0|
|Geico||$1,297||Best for driving incidents||4.7/5.0|
|State Farm||$1,397||Best overall car insurance company||4.7/5.0|
|Travelers||$1,447||Best for personalized coverage||4.7/5.0|
|Erie||$1,321||Best for robust coverage||4.6/5.0|
|Auto-Owners||$1,305||Best for discounts||4.5/5.0|
|Amica||$1,495||Best for claims satisfaction||4.5/5.0|
|Nationwide||$1,383||Best for coverage on a budget||4.4/5.0|
|Progressive||$1,561||Best for digital policy management||4.4/5.0|
|Allstate||$2,438||Best for high-value cars||4.0/5.0|
How much does car insurance usually cost?
When answering the common question “how much is car insurance,” it’s important to know that rates are highly dependent on the personal rating factors and vehicle information drivers provide when submitting for a quote. Nationally, full coverage policies average $1,771 per year. “Full coverage” refers to a policy that includes liability, collision coverage and comprehensive coverage.
In addition to the coverage types and levels you choose, other factors will significantly influence your final insurance cost. Insurers base car insurance rates on a perceived level of risk, which means that the following factors (and more) can impact your premium:
- Driving record: If you have a history of accidents, tickets or DUI convictions, you’ll likely pay more for coverage.
- Age and driving experience: Younger drivers tend to have less experience on the road, which means accidents are more likely and rates are usually higher than average. Hawaii and Massachusetts ban the use of age as a rating factor.
- State and city: Different states have different insurance laws, different accident statistics and different costs of living. Even your city and ZIP code (in most states) can influence how much you pay.
- Coverage types and levels: Choosing fewer coverage types and lower limits will generally mean a lower premium, but it also means less financial protection and higher out-of-pocket costs if you have an accident.
- Vehicle make and model: Each make and model of vehicle has unique features which impact the likelihood of accidents, the severity of accidents and the cost to repair the vehicle itself. Because of this, each vehicle will cost a different amount to insure.
- Credit-based insurance score: In most states, your credit tier is used to determine how likely you are to file a claim. Drivers with lower credit scores generally pay higher premiums.
- Insurance lapse history: Because most states require drivers to have at least minimum levels of coverage, lapses in insurance can result in higher premiums when you take out a policy again.
Why location matters when choosing car insurance
Auto insurance rates are based on several factors, and your city, state and ZIP code are among the most impactful. If you recently moved, it may be a good idea to compare companies to ensure that your car insurance provider is still the best fit for your needs. This is especially true if you have moved across state lines, as auto insurance is not standardized across the country.
Adding a comprehensive review of your auto insurance coverage as part of your moving checklist is a good way to remember this important step.
Average cost of full coverage car insurance
|State||Annual annual cost for full coverage insurance||Annual monthly cost for full coverage insurance|
What you need to know about car insurance
What is car insurance and how does it work?
Auto insurance is a form of financial protection that covers a variety of vehicle incidents that could affect you, your vehicle, or others and their vehicle.While most states require a specific minimum amount or type of coverage to be purchased, industry experts typically recommend having more robust financial protection to protect your finances in the event of a costly loss.
Auto policies will cover certain incidents of injury, damage or liability. Coverage limits can be set to satisfy your preferred level of financial protection, though not all coverage types will apply in all states or for all policies. In addition, deductibles are specific to certain coverage types. Because a higher deductible means you are willing to pay more if you file a claim, selecting a higher deductible can lower your premium cost.
More than a dozen rating variables unique to each driver go into determining how much you pay for auto insurance. As each carrier uses different rating factors and weights when underwriting policies, comparing quotes from multiple insurers is often essential in finding the most affordable rate.
While your exact level of coverage will depend on the policy you choose, filing a claim could potentially offer you a payout for loss caused by an uninsured motorist, weather event, occurrence of theft or vandalism, or a multitude of other damaging events. Similarly, if you are involved in an accident with another driver and they are at fault, their auto insurance could help cover your medical expenses and property damage (depending upon the state).
What are the different types of car insurance coverage?
Most auto insurance companies offer similar types of coverage, although variations do exist, especially with endorsements, or “add-ons.” Some companies might offer gap coverage as an option, for example, while another company doesn’t. Below are the types of car insurance coverage that most companies offer:
Almost always required by law
In most states, drivers are legally required to carry at least certain minimum limits of these coverage types:
- Bodily injury liability coverage pays for the injuries that you cause to others in an at-fault accident.
- Property damage liability coverage pays for the damage you cause to another’s vehicle or other property (like a fence, pole or building) in an at-fault accident.
Sometimes required by law
- Uninsured and underinsured motorist coverage pay for injury and damage caused by a driver who either lacks sufficient coverage or lacks any coverage at all. The Insurance Research Council’s latest study indicated one in eight U.S. drivers was uninsured in 2019.
- Personal injury protection (PIP), also known as no-fault insurance and offered only in certain states, pays for medical expenses you and your passengers incur following an accident, regardless of fault. It also accounts for non-medical expenses incurred as a result of an accident, such as lost wages or the cost of childcare. PIP is typically required in no-fault states.
- Medical payments coverage is similar to PIP insurance coverage but includes only payments for medical expenses. It is required in some states and optional in others.
Required if you have a loan or lease
If you finance or lease your car, your financial institution will likely require that you have a “full coverage” policy, which includes the following coverage types and adds coverage for damage to your vehicle:
- Collision coverage pays for damages to your vehicle caused by a collision. If you collide with another car, a tree, a pole, a building or a pedestrian, your collision coverage is the part of the policy that will pay for the damage to your vehicle.
- Comprehensive coverage pays for damage to your car caused by non-collision losses like theft, vandalism and storm damage. Comprehensive also pays for damages caused by hitting an animal and cracked windshields. According to the Triple-I, approximately 80% of drivers carry this optional coverage.
However, there are more types of car insurance coverage available to you that may be worth discussing with your insurer. Additionally, each state has its own car insurance laws and each driver has a unique situation. Talking with a licensed agent can help you determine the best coverage types and limits for your needs.
What are the different types of car insurance discounts?
Finally, most major auto insurers offer the following car insurance discounts that might help you lower your premium:
- Multi-policy, sometimes called multi-line or bundling, could earn you a discount on each policy you insure with the same company. This discount is common for insuring both a home and auto policy but is also sometimes offered for having other policies as well, like renters insurance, pet insurance or life insurance..
- Multi-car discount could save you money if you insure more than one vehicle on the same policy.
- Claims-free is commonly offered if you do not have any losses on your driving record for three to five years.
- Good student discount is usually available for full-time students under the age of 25 who have a certain grade point average or letter-grade average.
- Telematics programs are becoming more common with many car insurance companies. These usage-based insurance programs track your driving patterns with a mobile app or plug-in device. The safer you drive, the more you might save.
Keep in mind that insurance regulations vary by state. This means that some coverage types and discounts may not be available where you live.
What are the 10 largest auto insurers?
Although there are thousands of auto insurance companies operating in the U.S., a handful of the largest car insurance companies dominate the market.
Bankrate’s insurance editorial team analyzed each company’s average minimum and full coverage premiums from Quadrant Information Services, coverage choices, discounts, financial strength ratings and customer service scores. With this information, we assigned a Bankrate Score to each company. The scores are out of a 5.0 scale. The higher the Bankrate Score, the higher a company ranked in each of the individual scoring categories.
The following list of insurers demonstrates how the top 10 U.S. auto carriers write about 75% of the nation’s auto insurance coverage (ranked by market share):
- State Farm: 16.2%
- Geico: 13.6%
- Progressive: 13.3%
- Allstate: 9.1%
- USAA: 6.3%
- Liberty Mutual: 4.8%
- Farmers: 4.0%
- Nationwide: 2.3%
- American Family: 2.1%
- Travelers: 2.0%
So how do these car insurance companies compare? Each has its own advantages, and the best insurer for one person may not be the best for another.
So how do these car insurance companies compare? Each has its own advantages, and the best insurer for one person may not be the best for another.
- Headquarters: Bloomington, Illinois
- Market share: 16.2%
- Average annual full coverage premium: $1,381
- Average annual minimum coverage premium: $424
- Bankrate Score: 4.7
State Farm is the nation’s largest insurer of personal autos. The company offers numerous lines of insurance, banking products and loans, which are available through a network of local State Farm agents across the U.S. If you are in the market for insurance and banking services, State Farm is worth consideration.
State Farm’s overall customer satisfaction ratings from J.D. Power are mostly average. However, the company did earn an above-industry-average score for claims service. This indicates that customers are often satisfied with how State Farm handles claims in the event of a loss. State Farm boasts a strong balance sheet and carries an A++ (Superior) financial strength rating from AM Best.
State Farm has 19,000 local agents and 58,000 employees, making it easy to find help with your policy in your area. Additionally, State Farm has a usage-based insurance telematics program called Drive Safe and Save that rewards drivers with discounts on their car insurance based on good driving habits. Policyholders earn a discount just for signing up and could earn up to 30% for participating.
- Headquarters: Chevy Chase, Maryland
- Market share: 13.6%
- Average annual full coverage premium: $1,304
- Average annual minimum coverage premium: $343
- Bankrate Score: 4.7
Geico is the nation’s second largest auto insurance writer and insures more than 28 million vehicles. Its slogan, “15 minutes could save you 15% or more on car insurance,” is especially memorable when paired with its commercials featuring the Geico Gecko.
Geico’s customer satisfaction ratings from J.D. Power revealed that it scored just above the industry average for claims satisfaction. This demonstrates that customers are generally satisfied with Geico’s customer service. As a wholly owned subsidiary of Berkshire Hathaway Inc., Geico carries an A++ (Superior) financial strength rating from AM Best.
Geico’s user-friendly app for Android and Apple iOS operating systems makes it easy to view your policy, get quotes and file claims on your smartphone from wherever you are. The company also has a wide variety of discount opportunities, including occupational and professional organization-based discounts, and savings for federal employee status.
- Headquarters: Mayfield Village, Ohio
- Market share: 13.3%
- Average annual full coverage premium: $1,533
- Average annual minimum coverage premium: $507
- Bankrate Score: 4.4
Progressive is the third-largest car insurance company in the U.S. With so many resources at its fingertips, the company offers a wide range of coverage options for your vehicle, home, boats and RVs. If you’re looking to save money, the innovative Progressive Snapshot usage-based telematics program uses sensors to track your driving in real time and offers lower rates for safe driving.
However, keep in mind that Progressive’s J.D. Power customer satisfaction scores are mostly average and it received a below-average ranking for claims service. Progressive is fiscally sound and maintains an A+ (Superior) financial strength rating from AM Best.
Progressive offers both standard and nonstandard car insurance. If you have accidents, tickets or DUI convictions and find it difficult to find auto coverage, Progressive may be able to help.
- Headquarters: Northbrook, Illinois
- Market share: 9.1%
- Average annual full coverage premium: $2,390
- Average annual minimum coverage premium: $520
- Bankrate Score: 4.0
Allstate is one of the largest insurance companies in the nation. By offering auto, home, renters and life insurance coverage, Allstate makes it easy to bundle multiple insurance types and earn a premium discount.
Allstate’s customer satisfaction scores from J.D. Power vary according to where you are located — it ranks above average in some regions but below average in others. If you are considering a quote from Allstate, you may want to review your region’s specific reviews first. Allstate carries an A+ (Superior) financial strength rating from AM Best.
Allstate’s usage-based Drivewise telematics program can generate an additional discount if you maintain good driving habits. Drivewise participants can also earn rewards points, which they can redeem for car rentals, magazine subscriptions, gift cards and merchandise.
- Headquarters: San Antonio, Texas
- Market share: 6.3%
- Average annual full coverage premium: $1,272
- Average annual minimum coverage premium: $355
- Bankrate Score: 5.0
Exclusively an insurer for the military community, USAA offers heavily discounted auto coverage to active-duty service members, veterans and family members with an average annual savings of $725 when you switch. USAA is the fifth largest auto insurer in the U.S.
USAA consistently received high customer service scores with J.D. Power, although the company is not eligible for official ranking due to its eligibility restrictions. Like several other industry leaders Bankrate analyzed, USAA maintains the highest level financial strength rating from AM Best: A++ (Superior).
USAA’s car insurance offers unique features to make being insured as a military service member more convenient. This includes vehicle storage discounts while on deployment and automatic payment schedules. If your car is still being driven, you could add USAA roadside assist to ensure you and your family members are taken care of while on the road.
- Headquarters: Boston, Massachusetts
- Market share: 4.8%
- Bankrate Score: 3.9
You can purchase insurance coverage for just about anything through Liberty Mutual, from your home to your boat to your pets. The company’s auto insurance policies are easy to purchase, manage and bundle with other Liberty Mutual policies. Bundling is not the only way to save. Liberty Mutual lists 17 different auto discounts on its website to help customers get the best price on their car insurance.
Like Allstate, Liberty Mutual’s J.D. Power customer satisfaction scores vary by region. You may want to research customer satisfaction results in your area if you get a quote from this company. Liberty Mutual carries an A (Excellent) financial strength rating from AM Best.
Liberty Mutual’s Better Car Replacement program is designed to replace your totaled vehicle with a model one year newer with up to 15,000 fewer miles than your insured vehicle. Leased cars do not qualify for this coverage, but drivers who own their vehicle and would rather upgrade it following a covered total loss event may find this coverage to be a good option.
- Headquarters: Los Angeles, California
- Market share: 4.0%
- Average annual full coverage premium: $2,000
- Average annual minimum coverage premium: $678
- Bankrate Score: 3.8
As the seventh-largest auto insurer in the U.S., Farmers offers robust coverage, with a long list of unique features. For example, you can purchase ridesharing coverage if you drive for a transportation providers like Uber or Lyft. You may also be able to purchase OEM coverage, which will source original manufacturer parts for your vehicle if it is damaged. Farmers received an above-average ranking for claims satisfaction from J.D. Power. The company carries an A- (Excellent) financial strength rating from AM Best.
Farmers Group recently completed its acquisition of MetLife’s property and casualty business, MetLife Auto & Home. Drivers currently insured with MetLife may begin to see changes to the branding on their policies, and different coverage options or discounts may become available as the companies merge.
If you have recently purchased a new car, you may want to consider Farmers’ New Car Replacement Coverage. This optional coverage is designed to replace your totaled car with a brand new model, as long as your vehicle is less than two years old and has fewer than 24,000 miles.
- Headquarters: Columbus, Ohio
- Market share: 2.3%
- Average annual full coverage premium: $1,301
- Average annual minimum coverage premium: $465
- Bankrate Score: 4.4
Nationwide offers full lines of personal and commercial insurance products. Nationwide provides all the essentials in its auto policies, as well as optional coverage add-ons like towing, rental car coverage and gap coverage, which is designed to pay for the difference between your car’s value and what you owe on the lease or loan if your vehicle is totaled.
Like several other major auto insurers, Nationwide’s overall J.D. Power customer satisfaction scores also fluctuate by region, but the company scored below average in J.D. Power’s overall claims satisfaction study. Nationwide is fiscally strong and maintains a A+ (Superior) financial strength rating from AM Best.
Through Nationwide’s Vanishing Deductible program, you can potentially earn $100 off your collision and/or comprehensive deductible for each year you practice safe driving, up to a maximum of $500. Depending on what coverage types are included in your policy, this could effectively eliminate your entire deductible.
- Headquarters: Madison, Wisconsin
- Market share percentage: 2.1%
- Average annual full coverage premium: $1,090
- Average annual minimum coverage premium: $465
- Bankrate Score: 4.3
American Family, commonly known as AmFam, sells auto, home, life, health, travel and identity theft insurance, along with other insurance products. The company, which has a network of local agents throughout the U.S., puts an emphasis on convenience, providing smartphone apps with features like easy bill paying and a Teen Safe Driver program. AmFam carries an A (Excellent) financial strength rating from AM Best.
AmFam’s Dreams Restored Program takes the stress out of finding a repair shop by connecting you with partner shops in your area. Bills are sent directly to the insurance company, so you never have to see them. The work also gets a lifetime workmanship guarantee from American Family.
- Headquarters: New York City, New York
- Market share percentage: 2.0%
- Average annual full coverage premium: $1,568
- Average annual minimum coverage premium: $508
- Bankrate Score: 4.7
Travelers offers standard auto insurance coverage types, as well as options to tailor your policy, like rental car coverage, new car replacement and accident forgiveness. The company’s numerous discounts might allow you to save on your policy for bundling, safe driving or shopping early for a new policy. For example, Travelers’ multi-policy discount can save you up to 13% on your car insurance premiums.
Travelers received below-average claims service ratings from J.D. Power, as well as below-average customer service satisfaction scores in the specific regions in which it is available. Like our other top auto insurers, Travelers has a strong balance sheet and maintains the highest financial strength rating from AM Best, A++ (Superior).
Drivers in some states can take advantage of IntelliDrive, the company’s usage-based smartphone app that tracks driving habits for 90 days and reduces the cost of your premium for safe driving, although you could also experience a premium increase if your driving habits are not safe, based on Travelers’ telematics analysis.
How to choose the right auto insurance company
When shopping for car insurance, you may want to follow a few guidelines to help you find the best coverage for the best price.
- Shop around. The Triple-I recommends you get quotes from a minimum of three insurers, which will allow you to compare coverage options, discounts, and price.
- Inquire about discounts. Most insurance carriers offer discounts that you can qualify for to obtain additional savings. Ask potential insurers which ones might help you save on your premium.
- Consider your coverage needs. Depending on your budget or financial goals, vehicle value, whether you have a financed vehicle and other personal rating factors, your coverage choices may vary in type and limit.
- Bundle your policies. Most carriers that write several lines of insurance offer discounts to policyholders that purchase more than one policy type with them.
- Review financial strength ratings. You can check an insurer’s financial strength rating with companies like AM Best, Moody’s and Standard & Poor’s. These companies analyze historical data to review an insurance company’s ongoing financial strength. A low rating could indicate that a company may not be able to pay out claims if it is inundated with a large amount of losses after a major event, like a hurricane.
- Research customer service reviews. Third parties like J.D. Power publish studies that rank insurance companies based on customer service satisfaction, claims service satisfaction and overall customer experience.
Finding the right car insurance provider can take some time, but it can be worth the effort to find the car insurance company that best meets your needs.
Frequently asked questions
How much does car insurance cost?
The average annual cost of car insurance in the U.S. is $565 for minimum coverage and $1,674 for full coverage. Your premium will depend on your specific rating factors, like the company you choose, your age, the type of car you drive, the coverage selections you choose and your motor vehicle record.
How much car insurance do I need?
Everyone’s car insurance needs are different, but nearly every state will require you to purchase at least minimum coverage. To decide what coverage types and what limits to buy, you might want to consider a few things. For example, do you have the money to repair or replace your vehicle if it is damaged? If not, you may want to consider full coverage insurance. You might also want to consider the financial ramifications of causing an accident. Purchasing an appropriate amount of liability coverage could protect you and your family from financial devastation.
Can I change my car insurance to a new company?
You can change your car insurance to a new company at any time during your policy period. However, some companies may have early cancellation fees, so checking your company’s guidelines before canceling might be a good idea. If you have found an insurer that you want to switch your coverage to, just make sure you know when your new policy starts before you cancel your old one to avoid a lapse in coverage.
Which is the best car insurance company?
The best car insurance company varies from person to person. A tech-savvy driver may be looking for a top-notch mobile app for filing and tracking claims, while a price-conscious driver may be interested in finding the lowest prices and best discounts. One way to find the best company for you is to talk with an insurance agent about your needs and generate quotes from the top national and regional auto insurance providers in your area.
What do I need for a car insurance quote?
The most common advice when looking for a car insurance policy is to shop around, but there are simple steps you can take to make the process quicker. For all drivers who will be on the policy, you can start by preparing information such as their names, driver’s license numbers and dates of birth. Note that due to individual driver information, discount eligibility may vary. For any vehicles that will be insured, you’ll need to provide the year, make, model and vehicle identification number (VIN) for the most accurate quote.
What are the types of auto insurance?
Most auto insurers offer six standard types of car insurance. Based on your state’s minimum requirements, some types of auto insurance policies are mandatory. However, it’s typically a good idea to purchase full coverage rather than just the state minimum coverage.
- Liability car insurance: Bodily injury liability insurance (BI) covers other drivers and passengers if you are at fault in a collision, and property damage liability (PD) covers other cars or property if you are at fault in a collision.
- Collision insurance: Collision coverage protects your vehicle, regardless of who is at fault.
- Comprehensive insurance: Comprehensive coverage pays for damages to your vehicle caused by environmental factors, theft or vandalism.
- Medical payments (MedPay): MedPay covers any medical expenses for you and your passengers after a collision.
- Personal injury protection (PIP): PIP covers medical bills, lost wages and death benefits for you and your passengers, regardless of fault.
- Underinsured/uninsured motorist coverage (UIM/UM): This type of coverage protects you if you’re in a car accident with a motorist with too little coverage or no coverage at all.
Our January 2022 car insurance survey found 67% of the 1,000 respondents polled purchased full coverage insurance, which includes a combination of liability, collision and comprehensive coverage.
How much does car insurance cost?
According to our rate estimates, 35-year-old drivers with clean driving records and good credit pay between about $1,000 and $2,500 per year on average for full coverage insurance. Car insurance prices depend on many factors, including your age, location, credit score, driving record and type of vehicle.
Here are 11 popular insurance providers and their average monthly and annual costs according to our rate estimates:
|Car Insurance Provider||Average Monthly Cost Estimate||Average Annual Cost Estimate|
How car insurance costs vary by driving profile
Several factors influence how much you pay for car insurance coverage, which is why each car insurance company personalizes quotes for every driver. For instance, having an at-fault accident can add around $912 to your annual rate on average, while having poor credit or a DUI can add an average of about $1,456.
Car insurance cost by state
While costs vary based on your driving profile, your car insurance quote may also be higher or lower depending on where you live. According to our rate estimates, Michigan, New York and Louisiana tend to be the most expensive states for car insurance, while Ohio, Wisconsin and Maine are generally the cheapest.
What affects the cost of car insurance?
The cost of car insurance is influenced by a variety of factors, some of which are in a driver’s control and some of which are not. Understanding what you’re able to control can help ensure you’re getting the best insurance rate.
Here are the most common factors that affect car insurance costs:
- Location: Drivers in larger, more urban areas will often face higher auto insurance rates. Insurers factor in the higher likelihood of a collision due to increased traffic and vehicles per capita in cities.
- Age: Drivers under the age of 25 and elderly drivers are typically given high insurance premiums, as these types of drivers are considered higher risk. New drivers, regardless of age, will also have higher auto insurance costs.
- Driving history: If you have an at-fault accident, moving violations or a DUI/DWI on your record, a car insurance policy will cost more.
- Credit score: A high credit score indicates to insurers that a driver is reliable and financially responsible, so their auto insurance policy will cost less. Having a poor credit score can increase your rates (except in California, Hawaii, Massachusetts and Michigan).
- Vehicle type: Often, drivers with pricey sports cars pay more for the best car insurance because repairs are more expensive after an accident.
- Deductible: A lower deductible leads to a higher premium.
How to find the best car insurance rates
Getting the most affordable car insurance rates can be tricky, especially with the amount of information drivers need to know about policies. We’ve laid out five key steps below that explain how to find the best car insurance rates for your budget.
1. Get auto insurance quotes
It’s always a good idea to compare car insurance quotes between companies. Based on your driver profile and the other factors we listed above, your auto insurance cost can vary greatly.
Some insurance providers offer affordable rates to senior drivers, while others provide cheap car insurance for new or teen drivers. Before settling on a price, reach out to multiple auto insurers. You can compare quotes online yourself or work with an independent insurance agent to compare policies.
2. Look for discounts
Companies offer a wide range of car insurance discounts, so look for ones that apply to your situation. For example, some providers offer better discounts for students, while others offer discounts for military and occupational affiliations. Major providers offer other insurance products such as home, renters and life insurance, so you can often find discounts for bundling policies as well.
3. Opt for a higher deductible
While it may seem burdensome at first, a higher deductible can significantly reduce your auto insurance costs. Ask your insurance provider which deductible options are available for your coverage policy, and see how each affects your premium. Keep in mind, though, that you’ll need to be able to pay your deductible in the event of a claim.
4. Keep your credit in check
Pay all bills on time and see if there are additional ways to improve your credit score. Paying your bills in full and keeping your credit balances low will also help increase your credit score.
5. Try telematics insurance
Telematics insurance programs provide discounts based on your driving habits. If you have a short commute and practice good driving habits, you could save money with pay-per-mile insurance or a safe-driving program.
Consumer experience with car insurance companies
In January 2022, our team of experts surveyed 1,000 people who had purchased car insurance coverage. Most of the participants had used one of the auto insurance companies in this article, while some used other providers.
Shopping for the best car insurance coverage
According to the survey, 28% of policyholders shop for car insurance coverage in intervals longer than one year. Another 26% said they shopped for car insurance coverage every six months, while 25% reported shopping only once a year.
We found that most policyholders shopped for car insurance in the following ways:
- 30% used a quote comparison tool online
- 24% got online quotes through individual companies
- 21% called car insurance companies directly
- 16% used an independent insurance broker or agency to find coverage
Rate increases from car insurance companies
In our survey, we asked participants if they had ever experienced a rate increase without an obvious cause like an accident or ticket. Over 40% of the 1,000 respondents reported they had experienced a rate increase at some point.
Filing a claim with your insurance company
Our survey found that 25% of policyholders had their insurance claims resolved within two weeks. This was followed by 24% saying their claims were taken care of in two to four weeks, while 14% reported it took longer than four weeks.
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