If you’re buying car insurance for the first time, we have all the information you need.
There’s no reason to know much about car insurance until you need it. But when that time arises, you may be wondering what your insurance really covers. How much do you need, and how do you get it? Most importantly, are there any tips and tricks you should know to get the best deal possible?
Our experts are here to help.
Whether you want to know how to request price quotes or dive into your state’s laws that affect car insurance, here is the essential information you need about auto insurance in the U.S.
Before you reach out for quotes, make sure you have all of the information you need at hand:
You can request a quote by calling AutoInsurance.com at (866) 843-5386. We will shop the entire market for you and connect you to an auto insurance company that suits your needs. Your other option is requesting quotes one by one from individual providers, but that is a much more time-consuming process.
The National Association of Insurance Commissioners (NAIC) releases average car insurance rates by state, with the most recent data being from 2020. That year, the average cost across all states was $1,047.1 Find your state below to see the average where you live.
|State||Average annual expenditure on car insurance, 2020|
|District of Columbia||$1,415|
Aside from the coverages, limits, and deductibles you choose, companies use many factors to determine car insurance rates, including the following.
Aside from New Hampshire and Virginia, the two states that don’t require auto insurance, every state requires some form of coverage. The required coverages are typically bodily injury and property damage.
What if the other party causes the accident? What will cover your and your passengers’ injuries and property damage?
What if the other party lacks insurance or their limits aren’t high enough?
Finally, what if your car is damaged from something other than a collision?
Together, these coverages comprise full coverage car insurance, which we recommend. Your agent might also tell you about add-ons like roadside assistance, rental car coverage, gap insurance, or new car replacement. Insurance companies offer many coverage types, so be patient and take the time to go through all of your options.
Your state’s fault system will affect your car insurance rate too. What’s the difference between at fault and no fault?
The majority of states have at-fault systems, but some states have no fault, and others let you choose between the two.
|District of Columbia||At fault|
|New Hampshire||At fault|
|New Mexico||At fault|
|New York||No fault|
|North Carolina||At fault|
|North Dakota||No fault|
|Oregon||At fault (but requires PIP)|
|Rhode Island||At fault|
|South Carolina||At fault|
|South Dakota||At fault|
|West Virginia||At fault|
We’re letting you in on the secrets to getting a trustworthy insurance policy for less.
Never accept a first offer. Instead, compare quotes from multiple insurance companies to see which one can give you the lowest rate.
In every state except Massachusetts, Michigan, Hawaii, and California, a good credit score can get you low rates on car insurance and vice versa. People with good credit are statistically less likely to file claims, which makes them less of a financial risk to insurance companies.
Live in the Bay State? Learn more about Massachusetts’ auto insurance laws.
To improve your credit score, pay bills on time, use your credit cards, and limit the number of credit lines you open during a brief period of time.
If you want multiple types of insurance policies, like a home and auto insurance bundle, use the same provider to unlock discounts.
Unless it falls under an accident forgiveness policy, getting into an accident will raise your car insurance rates, even if the crash wasn’t your fault. Your best bet to keep rates low is driving safely, which includes the following measures:
Although you can’t control other drivers’ actions, controlling your own greatly reduces your risk of collisions.
One surefire way to lower your premiums is to increase the size of your deductible — in other words, the amount you owe on collision and comprehensive claims before your insurance company will contribute. However, make sure you can actually afford to pay a higher deductible if your car sustains physical damage, whether from a collision, inclement weather, auto theft, or vandalism. If you can’t pay your deductible, your coverage won’t matter, and you’ll be forced to repair or, worse, replace your car out of pocket.
Vehicle safety equipment like airbags, anti-theft devices, and passive restraints could land you a discount, depending on your provider. Your car may already have equipment built in that can save you money.
Minimum coverage is the cheapest form of car insurance, but we don’t recommend it. If you don’t have collision or comprehensive coverage and you suffer property damage that wasn’t another party’s fault, you’ll be financially responsible for repairs out of pocket. Instead, drop supplemental coverages you likely don’t need, like roadside assistance. That said, you could drop collision/comprehensive coverage if you have an older car with a low ACV, but keep in mind all future costs you might incur if you do.
Insurance companies offer a wide variety of discounts, so ask your insurance agent directly for ways you can save. Something as simple as enrolling in automatic billing or paying your policy in full could cut costs.
If you’re a good driver or have low mileage, consider telematics or usage-based insurance (UBI). How does it work? Consider, for example, Allstate Drivewise, available in all states except New York. The Drivewise app monitors your driving over a 50-day period and uses that data to determine your insurance rate. It measures the following behaviors:
Based on the results, the best drivers can save up to 40 percent or more, depending on their state. Even if your driving is subpar, Drivewise can only decrease premiums, not increase them.
For low-mileage drivers, consider pay-per-mile insurance like Metromile or Root. Customers save an average of 47 percent with Metromile compared to their previous insurers, making it a great option for seniors, people who work from home, or individuals who use public transportation often.
The best auto insurance for students allows them to cash in on their good grades in the form of car insurance savings. Companies like Allstate, State Farm, and Direct Auto give lower rates to drivers with high GPAs, class rankings, and so on.
Some insurance companies offer discounts if you take a defensive driving course. These courses make you a better driver, decreasing the likelihood of accidents and claims. That means you’ll be cheaper to insure, resulting in lower premiums.
Don’t just depend on an insurance company’s website or the words of an insurance broker. There are third parties that rate insurance companies on customer satisfaction (like J.D. Power, the NAIC’s Complaint Index Score, and the Better Business Bureau), as well as on financial strength, or a company’s ability to pay claims (AM Best, Moody’s, and Standard and Poors).
Cars with high safety ratings get lower car insurance rates, as they perform well in accidents in terms of protecting their passengers. Check safety ratings with the Insurance Institute of Highway Safety2 and the National Highway Traffic Safety Administration (NHTSA)3 when shopping for a car.
If you’re a rideshare driver, your personal car insurance won’t cover you while you’re working, and Uber and Lyft’s insurances don’t apply when you’re waiting to be matched with a rider or driving to pick them up. To fill in the gaps, get rideshare insurance. You may be able to obtain it from your existing company if your provider is State Farm, Esurance, or Progressive, among others.
Most companies let you file claims online or even through their mobile app. Often, you can take pictures of your damages directly through the app, making the claims submission process seamless.
Auto insurance apps let you submit claims, add coverages, and read FAQs all from the palm of your hand. Download your provider’s app to take advantage of convenient features.
Even if you don’t have pay-per-mile insurance, driving less than your estimated annual average mileage could get you a discount.
The average American drives between 10,000 and 12,000 miles per year.4
Many people make the mistake of not reading the fine print in their policies. Start with your policy declarations page, which summarizes your coverage. Pay attention to your coverages, limits, deductibles, and effective and expiration dates.
For a first-time buyer, getting car insurance might seem a bit overwhelming, but if you come armed with a basic understanding of how car insurance works, you’re more likely to walk away protected financially. Cost isn’t the only factor you should consider when it comes to choosing a car insurance company. Keep in mind the insurer’s financial strength and customer satisfaction ratings as well.
2019/2020 Auot Insurance Database Report. National Association of Insurance Commissioners. (2023, Jan).
Vehicle ratings. Insurance Institute for Highway Safety, Highway Loss Data Institute. (2023).
Ratings. National Highway Traffic Safety Administration. (2023).
What is good mileage for a used car? Progressive. (2023).