Car insurance is costly. But there are ways to reduce your monthly auto insurance bill, for many people to less than $100 per month and for some to as low as $62 per month. It largely depends on your coverage selections, your age and where you live - as well as the insurance company you choose.
There’s no guarantee that one company will offer you the cheapest car insurance rate, so here’s the bottom line: If you’re looking to get the best deal you’ll need to get quotes from multiple insurers.
Ranking of the country’s nine largest car insurance companies
We took a sample of information based on multiple sources to find a range of insurance costs. We based these samples on someone with a clean driving record, driving a sample range of popular, non-exotic vehicles.
What’s important to understand is that insurance rates can fluctuate on a number of factors almost by the day, so this range is only a guide to provide some general data about which companies overall provide the least expensive insurance coverage.
HUGE DISCLAIMER ALERT: We’ll get into other variables that influence insurance cost further down in the article, but in general, it’s important to know that which insurer can provide a better rate for you depends on the state you live in, your driving history, the actuarial analysis the insurer is using, and how aggressively it focuses on market share versus profit margin. We’re not making a blanket statement about which insurer can provide the cheapest insurance.
(*) According to our research, Erie Insurance writes auto policies in the District of Columbia and the following states: Illinois, Indiana, Kentucky, Maryland, New York, North Carolina, Pennsylvania, Tennessee, Virginia, West Virginia and Wisconsin.
The average cost of car insurance is $1,341 for a driver with a clean record, based on our analysis of rates reported online for eight of the largest insurers in the U.S.
There is wide variation in the car insurance rates reported by independent sources, which points to the main theme of this article: the rates available to you will depend on your individual situation. Take a quick glance at the table below and you’ll get the idea. The definition of “average” leaves a lot of room for interpretation depending on who is doing the math.
|Rates we found reported as “typical” or “average” (annual) online||Average (annual)||Adjusted average* (annual)|
|USAA**||$416, $430, $886, $948, $1023, $1114||$986||$821|
|GEICO||$394, $818, $901, $1168, $1198, $1214, $1276||$1,237||$1,032|
|State Farm||$712, $726, $1,234, $1,312, $1,313, $1,321, $1,511||$1,412||$1,148|
|Nationwide||$666, $1,004, $1227, $1,346, $1,561, $1,864||$1,346||$1,248|
|Travelers||$1,267, $1,327, $1,412||$1,335||$1,327|
|Progressive||$536, $924, $1,373, $1,415, $1,604, $1,689, $1,766||$1,685||$1,401|
|Allstate||$693, $1,390, $1,758, $1,834, $1,880, $1,888, $1,963||$1,861||$1,840|
|Farmer's||$1,351, $1,470, $1,524, $1,612, $1,682, $1,865||$1,695||$1,909|
|Liberty Mutual ***||N/A||N/A||N/A|
(*) The “adjusted average” is computed by eliminating the highest and lowest values and averaging the remaining values.
(**) There’s a huge asterisk right in front of our number one insurance price contender, so let’s explain that first. Unlike the rest of these insurers, USAA isn’t available to everyone in the country. It’s only available for active duty military members, their families, and military veterans. If you fall in that category, stop reading right now and talk to USAA, because all things being equal, you probably can’t buy cheaper auto insurance anywhere.
(***) There’s another asterisk for Liberty Mutual. We could not find enough online reporting of Liberty Mutual car insurance rates to provide reliable analysis for this company.
GEICO has spent zillions of marketing dollars making you know that they exist, with multiple marketing campaigns spread across multiple platforms for years. That seems to be the way that most insurers get you to switch from one company to another. Farmer’s, Allstate, Liberty Mutual, Progressive and State Farm all have pitchmen you’d recognize, and jingles that will be earworms for generations to come.
What’s also common about all of these insurers is that they’re huge, and able to absorb razor thin margins in volume.
There are a number of variables that can impact the cost of your insurance policy every year.
The big one, of course, is location, which is why we’ve included another set of data below that shows the range of insurance prices for all 50 states and Washington, DC. But it goes even deeper than that. Depending on where you live within a state can have a significant impact on your cost of insurance. For example, if you live in New Orleans, Louisiana, your insurance cost can be almost $1,000 per year higher with a full-coverage policy than it would be if you lived in Baton Rouge, just 81 miles away.
But the smaller things add up, too. Some add up less than others, though, as you’ll find out. Sometimes our notions about what’s impacting the cost of insurance is flat out wrong.
Here are the top culprits:
There are other factors that can raise or lower your car insurance premiums. Some of these can help you qualify for car insurance discounts and could add up to savings of hundreds of dollars on your annual insurance bill:
How do accidents affect car insurance rates? The average cost of car insurance is $1,920 for a driver with one accident on record, based on our analysis of rates reported online for eight of the largest insurers in the U.S. Your driving record is going to have a significant impact on your annual insurance cost. It often has less to do with your insurance company than it does with the insurance commissioner in your state, which has assessed surcharges for accidents and tickets that insurance companies then apply to your annual insurance bill.
In general, DON’T HAVE ACCIDENTS, because they’re going to negatively impact the cost of your insurance, in some cases, even if the accident wasn’t your fault. We’ve got data on how your insurance cost can increase for ONE accident, but your rate is going to go up even more if you have multiple accidents, and that surcharge is often going to follow you around for years.
We compared the added cost of one accident from several online sources to get an idea of how much an accident would impact your annual insurance cost. For each insurer, we calculated an “adjusted average” rate by eliminating the highest and lowest values and averaging the remaining values.
|Rate w/ No Accidents||Rate w/ One Accident||Added Cost Per Year|
NOTE: Insurers have recently marketed “accident forgiveness” in their advertising, but those ads suggest that it’s a program that the insurer is offering out of the goodness of their heart. It’s not. According to Liberty Mutual, “Accident Forgiveness is an additional coverage that you may qualify for that can be added to your auto insurance policy, where your price won't go up due to your first accident. We offer this benefit if you are accident free and violation free for five years, whether you've been with Liberty Mutual Insurance or a prior insurance carrier.”
That means if you want accident forgiveness, you may need to pay for it. It’s basically insurance that you won’t need insurance. That’s like betting fifty bucks that you’re not going to win twenty five bucks at the blackjack table.
The average cost of car insurance is $2,036 for a driver with at least one speeding ticket and $1,983 for a driver with at least one distracted driving ticket, based on our analysis of rates reported online for eight of the largest insurers in the U.S.
One of the most dramatic ways to see your insurance rate rise is to get a ticket. And not only do tickets increase your insurance cost immediately, they hang around forever. Insurance surcharges stick to your driving record anywhere from three years to a decade, meaning you’re going to be paying for that ticket multiple times over, long after the initial sting of the ticket hits your checkbook.
Speeding is generally the most expensive. It doesn’t matter much which insurance company you have, because the rate of surcharge is typically set by the state in which the ticket occurred.
Distracted Driving is another, increasingly frequent and expensive way to see your insurance cost rise. These laws are typically written to be as broad and loose as possible, meaning that you could see a distracted driving charge tacked onto a speeding ticket not only for looking at your phone, but tuning your radio, applying your makeup or eating a sandwich. Pay attention, and keep your speed down and your insurance cost will go down over time.
We compared the cost impact of having tickets on your driving record from several online sources to get an idea of how much the tickets could impact your annual insurance cost. For each insurer, we calculated an “adjusted average” rate by eliminating the highest and lowest values and averaging the remaining values.
|Clean Record||Speeding Ticket||Distracted Driving|
|National Average Rating||$1,341||$2,202||$2,233|
First, the good news. Most drivers are eligible for discounts and some of these will be automatically applied when you compare insurance rates online and enter information about yourself. You can shop rates and see the effects of these discounts by applying for car insurance quotes here:
This may be SHOCKING but discounts for good credit, marital status and bundling with your homeowner’s insurance aren’t quite as lucrative as the penalties you’ll incur for a bad driving record.
Just BEING a homeowner ends up saving you about fifty bucks a year. If you own a stand-alone house, it’s generally a little more of a discount than if you own a condo, and renting an apartment essentially nets you zero. The average car insurance rate for homeowners is $1,213 per year, based on our analysis of rates reported online for eight of the largest insurers in the U.S.
The average car insurance rate for drivers with good credit is $1,074 per year, based on our analysis of rates reported online for eight of the largest insurers in the U.S.
It may not be obvious, but your credit score can have a lot to do with your insurance cost. According to the Federal Trade Commission, “Some insurance companies also use credit report information, along with other factors, to help predict your likelihood of filing an insurance claim and the amount of the claim.” In other words, if you have a low credit score, the insurance company thinks that you’re much more likely to file an accident claim against them.
Note that insurance companies may not call these “credit scores,” and may instead refer to them as “insurance scores” or “credit-based insurance scores.”
However, credit score doesn’t always have to impact your insurance cost. California, Hawaii and Massachusetts all ban the use of credit scores as a factor in determining insurance cost.
In general, in states that allow insurers to adjust rates based on credit rating, a “Good Credit” rating of 740 or higher is going to trigger a 15% savings in your annual insurance rate.
On the other hand, a bad credit rating -- anything under 580 -- is going to ADD approximately 15% to your insurance costs every year. To determine how your credit rating is going to influence your insurance cost, you obviously need to know what your credit rating is. Make sure you pull a free credit report from one or more of the major credit rating agencies before you get insurance quotes, so that you can fix any incorrect information before your quote is calculated:
Do a Google search for “Credit Report” and you’re going to get nine zillion responses from companies that will wave claims in front of you that suggest they’re the only ones that are going to get you a free credit report. The truth is that you’re entitled to a free credit report from every one of these agencies every year, so you don’t need to register your information with a third party. These agencies have all been slapped across the knuckles for data breaches, so it makes no sense to add a third party in the mix knowing more about your credit.
The average car insurance rate for married drivers is $1,187 per year, based on our analysis of rates reported online for eight of the largest insurers in the U.S.
Being married isn’t going to save you a whole lot of money on your annual insurance tab, but it’s better than nothing. In general, you’re looking at a five to six percent discount on your insurance.
The average car insurance rates from bundling with homeowner’s insurance is $1,137 per year, based on our analysis of rates reported online for eight of the largest insurers in the U.S.
If you own a home, you can often manage to save about 10% off of your auto insurance by bundling your auto insurance with your homeowner’s insurance. That, of course, requires that you select an insurance company that offers homeowner’s. Sometimes you can recognize a discount by using a local agent who might be able to offer a package that selects from two different insurance companies.
So what does this look like with different insurers? Let’s take a look. We compared how the discounts could impact your annual insurance cost by reviewing the rates reported across several online sources. For each insurer, we calculated an “adjusted average” rate by eliminating the highest and lowest values and averaging the remaining values.
|Being a Homeowner||Having Good Credit||Being Married||Bundling w/ Homeowner|
|National Average Rate||$1,213||$1,074||$1,187||$1,137|
There are a massive number of insurance companies doing business all over the country. A handful may only do business in a few states, or a larger region. If they do and you’re lucky enough to live in one of those places, you may have access to some of the cheapest insurance in the country, partially because your rates aren’t factored in with people insuring cars in Los Angeles or Manhattan. You’re in a risk pool of people with cities that aren’t nearly as crowded.
If you do have access to these companies, an insurer like Farm Bureau or Erie can save you as much as a thousand dollars a year versus average insurance rates elsewhere in the country. Reporting of annual car insurance rates is more spotty for the smaller insurers, so we aren’t able to provide a table of averaged rates here with much reliability. We were able to run the math for Farm Bureau and Erie and found some very favorable rates. For drivers with a clean record, we found an average rate of $743 per year with Erie and $912 for Farm Bureau, both significantly lower than the national average for larger insurers.
As stated above, a key to cheap car insurance is where you live. If you’re specifically looking for a smaller insurer, here is where some of the more prominent ones operate:
|Grange||GA, IA, IL, IN, KY, MI, MN, OH, PA, SC, TN, VA, WI|
|Erie||DC, IL, IN, KY, MD, NC, NY, OH, PA, TN, VA, WI, WV|
|Secura Availability||AZ, CO, IA, IL, IN, KS, KY, MI, MN, MO, ND, WI|
|Cincinnati Insurance||AL, AR, AZ, CA, CO, CT, DC, DE, FL, GA, HI, IA, ID, IL, IN, KS, KY, MA, MD, MI, MN, MO, MT, NC, ND, NE, NH, NJ, NV, NY, OH, OR, PA, RI, SC, TN, TX, UT, VA, VT, WA, WI|
|Country Financial||AK, AL, AZ, CO, GA, IA, ID, IL, IN, KS, MN, MO, ND, NV, OK, OR, TN, WA, WI|
|Farm Bureau||AZ, IA, KS, MN, NE, NM, SD, UT|
|Auto Owners (including affiliates CIG, Atlantic Casualty and Concord Group)||AL, AR, AZ, CA, CO, FL, GA, IA, ID, IL, IN, KS, KY, MA, ME, MI, MN, MO, NC, ND, NE, NH, NV, OH, OR, PA, SC, SD, TN, UT, VA, VT, WA, WI|
|American Family||AZ, CO, GA, IA, ID, IL, IN, KS, MN, MO, ND, NE, NV, OH, OR, SD, UT, WA, WI|
The insurance rates we’ve been talking about here are full coverage rates, with fire, theft and collision included, with $50,000 in bodily injury coverage per person involved in an accident, $100,000 in total coverage, and $50,000 in personal property coverage.
That’s a good, general rule of thumb for selecting insurance coverage, especially if you own a home. You don’t want to get sued because you haven’t selected enough coverage to repair damages if you drive through the front of a Dunkin’ Donuts.
That’s not the minimum coverage required by a state, though. Often, those minimum coverages are much, much lower. California, for example, requires $15,000 in bodily injury coverage, $30,000 in total coverage, and just $5,000 in personal property coverage. Five grand is barely enough to cover you if you take out somebody’s ficus, let alone their foyer. Massachusetts bumps up to $20,000 and $40,000, but keeps that $5,000 personal property limit.
Here’s what the LIABILITY limits are in all 50 states. Note that these states may require different limits for personal injury protection or other forms of insurance, so check with your insurance company before you make any final decisions.
We collected some sample rates for minimum coverage where we could find them, but in all honesty, these don’t tell you a whole lot. First of all, state minimum coverages vary widely by state, as you can see from the tables above. Secondly, not all of these insurance companies are even available coast-to-coast. Your allowable annual mileage -- as is often the case -- may vary.
We found that, across 7 of the largest insurers, taking only the cheapest, minimum insurance required by your state could save approximately $300 per year. We calculated the average cost of “bare minimum” insurance to be $1,003 per year across those insurers. Compare to an average annual cost of $1,314 for standard insurance coverage provided to a driver with a clean record
Again, when it comes to minimum car insurance rates you need to take these calculated averages with a grain of salt. What you can expect to pay will depend on the specific requirements in your state as well as your driving history and personal details such as annual miles driven, credit rating and other factors.
At this point, you know that there are a lot of things that impact the cost of car insurance, from driving record, to credit score, to the city you live in. We took a sample of insurance rates from multiple sources and displayed them here only to show how much the cost of insurance can vary state to state. That cost continues to vary city to city within a state, so this data is really only for comparison purposes.
What it should show to you is that living in a state like Maine can be a lot less expensive than a state like Rhode Island, as close as 112 miles away.
|State||Average cost of car insurance|
Here’s how to save money on car insurance: Move to Maine. (Kidding, we know that’s impractical, and there’s enough of you that visit Maine regularly that we don’t want you moving there. Massachusetts, we’re looking at you.)
Aside from packing up your family and moving to the Pine Tree State, there are some significant ways you can lower the cost of your insurance:
As we showed you in the section above, there’s a pretty wide range of prices when you keep to the minimum insurance coverages allowed by your state. If you’ve got the cash to cover any unforeseen accidents, you can drop your coverage to the state minimums, but you really have to understand the risks in doing so. The difference between $40,000 and $100,000 in liability coverage is a pretty decent annual starting salary.
You’d be much better off raising your deductible rather than dropping your liability coverage to the minimum. The difference between $500 and $1,000 is going to be much easier to swallow than the difference between $40k and $100k.
When we say “older car” here, we mean something from the 1990s or early 2000s, not something from the 1960s or 1970s. If you’re driving around in what we call a “winter beater” in these parts, dropping your collision, fire and theft coverage is going to save you a bit of money, and frankly, your cheapskate insurance company is only going to give you the least possible amount of money if your car gets totalled in an accident anyway.
This differs greatly from a “classic car” insurance policy, which allows you to set an “agreed value,” which both you and your insurer agree upon. If your classic gets totaled with this type of coverage, the insurer pays you the value which you both agreed upon. We have a whole article explaining how this works here.
There are approximately 937,378 possible discounts you can claim to lower your insurance cost. AAA member? Discount. AARP member? Discount. Air Force veteran? Discount. It’s up to you to figure out what these discounts are, and select the insurance company that best applies them.
Like Kayak for air travel, there are a number of third party comparison websites available that can help you reduce the cost of your auto insurance. QuoteLab, RateKick, NerdWallet, The Zebra all can help you find the cheapest insurance with your driving record, in your location, with your discounts applied.
Car Talk works with a company called QuoteWizard to help compare quotes:
There is a difference between “cheap car insurance” and “good value car insurance”. If there’s one thing you should come away with, it’s this: CHEAP insurance doesn’t always mean the BEST DEAL on insurance.
Auto policies are constructed from a set template used by each state. When you purchase a policy, the company you work with, or the company’s agent, will ask you questions about what coverage you want to buy. You may also be going this alone using a website designed to walk you through the process step by step. What you will find is that there are many options from which you the policyholder can choose. For example, many states will insure vehicle glass as either the default (like in Massachusetts) or as an added policy rider. You may be allowed to “de-select” glass coverage in states where it is the default in order to save a few dollars on your annual premium. Of course, if a stone then breaks your windshield, you will foot the bill, often a cost of thousands of dollars. This is just one example of how paying more for a policy can get you more coverage. In that case, more money equals more value.
You can make an informed decision, and the assumption is that if you make a choice, the company will back you up. But how do you know they really will back you up? What if you pay extra for glass coverage and when a stone cracks the windshield the company wants to try to “repair” the glass rather than replace the windshield? Now the value of that added cost is starting to look a bit less attractive.
The fact is, most auto crash damage or mishap damage ends up becoming a negotiation. What seems cut and dried on the policy page really isn’t all that black and white when the time to use the policy unfortunately comes. One of the most long-running debates about vehicle repair is whether the exclusive use of original equipment manufacturer parts (OEM) to repair your car will be used, or if lower-cost aftermarket parts are acceptable in the repair of your car.
Since the middle of the last century, auto shops and insurers have been steering customers with crashed cars toward aftermarket parts. They can be much less expensive, and they can be equal or better in quality. Or they may not be equal in quality. To help make the aftermarket parts more uniform in their fit and finish and suitability as replacements, a certification company was formed. It is called CAPA (Certified Automotive Part Association). It certifies aftermarket manufacturers’ parts and focuses on what are called “crash parts.” These are the formed sheetmetal parts like fenders and hoods that body shops need to make needed repairs. The idea is that CAPA-certified aftermarket parts are known to be of suitable quality for the repair your car needs.
Will paying more for you auto insurance ensure that you only get 100% OEM repair parts if you have a crash? It will not. The local office of your insurance company is going to work with at least two parties to estimate the cost of your car repairs. One is the body shop’s state-certified vehicle appraiser. States like Massachusetts mandate that any shop repairing vehicles for compensation employ a certified repair appraiser. The second party is either the insurance company’s captive appraiser, or an independent representative who conducts appraisals for multiple insurers. The two parties will hash out the cost to make repairs on your vehicle and you will pay any needed deductible. In most U.S. states, the insurer must inform you if non-OEM parts are planned for use in your repair, and the company cannot coerce you into accepting them. However the law also does not require that they use all-OEM parts. Fun, right? It gets better. The age of your car matters. If it is new, the likelihood of new OEM parts being used is high. If it is ten years old, low. The laws in some states take that into consideration. If you want to pay more to use all-OEM parts, or to pick and choose which OEM parts are used, you will most likely have that option. Paying more for your policy won’t help.
Here’s our take. Be involved with the repair process. Find your own local repair shop with a good reputation and good recent reviews. Using a shop affiliated with your brand’s local dealer does not guarantee that only OEM parts will be used. Speak to the shop where your repairs will be conducted and to the person who will be responsible for the repair process. Find out about costs and also the expected time the vehicle will be in the shop from start to finish. You can move a crashed car via a tow truck if need be. You do not have to repair it at the location to which it was towed following a crash.
Discuss with the shop their opinion on the parts needed and whether they should be OEM or if they have trusted aftermarket parts for your year make and model. If your car is a common one, like a Camry or a CR-V, the parts for it are going to be available in huge quantities and the quality known. If your car is a vintage car with special value the conversation is going to be much longer. So plan ahead.
If your car is special, say a show-stopping 1963 split-window Corvette, you’d be nuts to buy insurance coverage from your typical auto insurance company at all. We’ll say that again: If you have a classic car, and your state allows you to choose an insurer that specializes in such vehicles, DO NOT INSURE YOUR CAR WITH AN ORDINARY INSURANCE COMPANY. We have an entire article on classic car insurance here. It’s going to save you tons of money, and it’s also going to provide you with significantly better coverage if something goes wrong.
A: Insurance rates vary greatly between carriers and even between policy holders. In national studies, large carriers like State Farm and Geico have the best rates. USAA is the cheapest of the national insurance companies, but their coverage is limited to active military, veterans, and their families.
Regional carriers may be able to offer extremely discounted rates for people in a limited geographic area. In Georgia, for instance, George Farm Bureau is the cheapest insurance carrier. In Indiana, Erie insurance is cheapest. Exploring your personal situation (are you a veteran? A senior?) will net the best rates for you, regardless of the carrier.
A: There’s no tried-and-true rule for getting cheap car insurance. The best rates available to you will depend on where you live, your driving record, the coverage you need, the type of vehicle you own, and on other factors like your credit score. If you don’t need full coverage, shopping for a minimum coverage policy from a company like Farm Bureau or Erie will get the best rates, but for full coverage you’ll need to shop around.
Also, make the carrier aware of other memberships or special circumstances you have. If you’re a veteran, active military, a senior citizen, or if you have a membership to an organization like AAA or AARP, you may be eligible for discounted or special rates.
A: Years ago, only a few companies offered online applications for their insurance policies, but that has changed in recent years. Almost all insurance carriers offer an online-only option to apply for coverage now, so it’s just a matter of shopping around. Data reported on multiple sources shows that USAA is still one of the most affordable options, but well-known insurance carriers State Farm aren’t far behind for many people.
A: Unsurprisingly, some car insurers have been called out by their customers for having poor customer service and in some cases unexpected rate changes. We recommend checking recent online reviews before you switch to a new carrier.
A: Unfortunately, yes. The Federal Trade Commission found that low credit scores were relatively accurate predictors of a driver’s risk for an accident. As a result, insurance companies will sometimes charge higher rates and have more restrictive coverage offerings for people with spotty credit histories. That said, several states do not allow credit score to influence the cost of your auto insurance. See above.
A: A few states offer government/public car insurance for low income families. California, Maryland, Hawaii, and New Jersey offer the services.
A: Full coverage costs vary by state and carrier. Geico, Progressive, and Allstate are all among the cheapest full coverage providers.
A: Driving without insurance is not an option, so the strategy here will be to shop around to find a rate that you can afford. If you are unable to afford any coverage, the best option will be finding an alternate ride.
A: One day insurance can be very helpful if you’re buying a car or moving a vehicle from one location or another. You can also buy temporary coverage and supplemental coverage for special activities like track days and off-roading.
A: Shopping around is the best strategy to find the best rates. Companies will often compete with each other for your business. You can also take advantage of any other memberships you might have, like AAA or AARP for discounts.
A: No. Lying about any part of your insurance application can result in lost coverage, uncovered accidents, or legal action.
A: Insurance rates can vary greatly from place to place and from vehicle to vehicle, even without any accidents or tickets on the driver’s record. A responsible driver in Los Angeles might have a much higher rate than a similar driver living in rural Kansas, simply because they live in an area with more people and a higher likelihood of accidents.
A: An older car is not always cheaper to insure. Insurance companies tend to give discounts and promotional rates for driving vehicles with newer safety equipment and better quality records.
A: In the best case scenario – nothing. In many cases, you’ll be able to go to traffic school or some other remedial program to have the ticket removed from your record. If not, you may see a rate increase the next time you renew your policy or shop for a new policy.
A: Car insurance becomes expensive for people with spotty driving records, poor credit, or for those that live in extremely congested areas with other people that get into lots of accidents. Insurance is a numbers game, and companies are constantly trying to adjust their rates to match their perceived level of risk.
The best way to save is to compare multiple quotes. Start now.