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The best way to find cheap car insurance is to shop around. Each company determines its prices differently, so companies might offer different rates for the same driver. We’ll walk you through everything you need to know to compare options accurately and get the biggest bang for your buck.
The biggest reason to compare auto insurance quotes is to save money. In 2019, Americans spent an average of $1,070 annual on auto insurance.1 If you shop around and find a good deal, you might be able to pay less. Conversely, you might pay more if you live in a state where insurance rates are high or if providers consider you a risky driver, which also makes finding affordable rates important.
When insurance companies determine your premiums, they account for factors like your age, ZIP code, driving history, vehicle, annual mileage, and even your marital status. Each company weighs factors differently, and they’re secretive about their processes. Quotes also vary based on market trends.
The bottom line is that what one company offers you might differ significantly from another. This variability is why you need to shop around to find your best personal rates.
You can get an auto insurance quote whenever you want to, regardless of where you are in your policy cycle. However, if you want to switch to a new provider before your current policy is up, you will likely incur fees. Fees tend to be higher if you cancel your insurance soon after buying the policy. To find the best deal, shop around every time your policy is up for renewal, which is usually every six to 12 months.
If your current provider charges fees for canceling your policy mid-term, calculate whether your savings warrant switching early, or if you should wait until the end of your policy’s term.
Shopping for auto insurance takes time, so if you’re happy with your policy, keep it and avoid the hassle.
It’s a good time to shop for quotes if you experience a big life change, like moving to a new city, adding a teen driver to your policy, buying a new car, or getting married.
An auto insurance quote is different from a policy rate. A quote is an estimate of an auto insurance policy’s cost, based on the information you provided the insurance company and your chosen coverages, limits, and deductibles. A policy rate is the amount you’ll actually pay for insurance. If you provide incomplete information, even by mistake, or if you change your requested coverage, your policy rate may change.
There are several reasons quotes differ from policy rates:
When choosing from among the multitude of auto insurance companies, price is a key factor, but not the only one to consider. According to the Insurance Information Institute, these five factors are the most important when picking an insurance provider.
In many states, when you request a quote, auto insurance companies will check your credit score — but it’s a soft check, so it won’t hurt your credit.
At AutoInsurance.com, we comb through the market to help you find the best insurance, offering free quotes for policies that suit your needs. Call 866-480-0667 and we’ll shop all of the auto insurance companies in your area to find the best coverage for you.
Because companies use different formulas to write auto insurance policies, the cheapest option for you depends on personal factors such as your age and ZIP code. GEICO, State Farm, and Progressive tend to offer cheap rates overall. GEICO’s average annual cost is around $350, State Farm’s is $452, and Progressive’s is $619. At $356, USAA is also a strong option, though it’s only available to military members, veterans, and their families.
If you have a poor driving record, like a history of speeding tickets or a DUI, State Farm is a particularly good option. If regional and smaller companies are available in your area, they also offer competitive rates. Some of the cheapest are Central Insurance at an average cost of $257 annually, MMG at $287, and Secura at $319.
To learn more, check out our article on how to find cheap car insurance companies.
A number of factors affect car insurance rates — primarily what coverages, limits, and deductibles you choose for your policy. The more you buy (whether on your own accord or because the state requires it), the more you’ll pay.
Higher limits will save you money in the event of a serious accident, but they will cost you more in premiums, because the insurance company is obligated to pay more in the event of an accident to meet the higher limit. The difference between the maximum and minimum limits can add up to more than $1,000 each year in premiums. Similarly, a higher deductible means lower monthly payments, and vice versa.
Monthly costs also increase if you add these or other supplemental types of coverage:
Insurance providers use data from customer claims and industry safety reports to rate a vehicle’s safety. Safer vehicles are less expensive to insure, and ones that are not as safe cost more to insure.
Companies also consider how susceptible a vehicle is to damage, occupant injury, and theft, as well as how much it costs to repair.
Driving a vehicle that offers greater protection to drivers and passengers and that tends to be less expensive to repair will lower your costs. In general, newer and flashier vehicles cost more to insure. You’ll pay more to insure a new sports car than an old minivan.
If you use your car for business or you commute long distances, you will pay more for auto insurance. You can lower your costs by driving less, taking public transportation, and shortening your commute. For example, instead of driving straight to work, you might drive to the station and take a train.
Low-mileage drivers may even have the option to pay per mile. If you choose this option, your insurance provider will track how many miles you drive and use your mileage to set your premium.
Urban drivers tend to pay more for auto insurance because cities have higher rates of theft, accidents, and vandalism. For example, if you live in Michigan, you’ll pay more for insurance if you live in Ann Arbor or Detroit than you would living in a more rural area. Insurance companies consider parking on the street riskier than parking in a garage and may increase rates accordingly. Areas prone to extreme weather (e.g., floods, wildfires) like Texas or California also see higher insurance rates.
If you have a history of accidents, speeding tickets, reckless driving, or a DUI, you will pay more for auto insurance. On average, if you’re at fault for an accident that causes property damage, your premiums will increase by about $650 per year for three years — which will cost you almost $2,000 overall.
Before filing a claim, compare the potential increase in your premiums, plus your deductible, to the out-of-pocket expense. In some cases, it costs less to pay for the damages out of pocket.
Similarly, a DUI will set you back by an average of about $1,500 per year in raised insurance premiums. To find out how much that will cost overall, multiply the increase by the years a DUI stays on your record in your state. For example, in New York and California, a DUI stays on your record for 10 years, so a DUI could cost you a total of $15,000 in raised premiums.
A lapse is a period of time you didn’t carry auto insurance, regardless of whether or not you owned a car. If you have a lapse in your insurance coverage, your rates will increase. This includes situations such as if you owned a car previously, sold it, then purchased another car years later.
Unfortunately, in most states insurance providers can and will charge you more for auto insurance if you have poor credit. The only states that ban this practice are Massachusetts, Hawaii, Michigan, and California.7
Insurance companies use demographics to determine your premiums. For example, collision rates are higher for drivers under age 25, especially single males, which is why this group pays more for insurance.
The following chart shows the crash rates per 100,000 drivers by age group and sex.
|Age group||Crashes per 100,000 male drivers||Crashes per 100,000 female drivers||Crashes per 100,000 male or female drivers|
Overall, men pay more than women for auto insurance, except in these states, which ban gender pricing discrimination:
Young drivers buying their first policy pay more than experienced drivers. Teens cost the most to insure, though students can get discounts with good grades, through some providers.9 Rates drop when drivers turn 25 and continue to decrease as they enter their fifties, before rising again for seniors.
Finally, married drivers pay slightly less for auto insurance, because studies find they tend to file fewer claims.
Insurance companies offer discounts in several categories. Discounts vary by company and state.
Whether you own, lease, or finance your vehicle affects how much you pay for auto insurance. If you lease or finance your vehicle, the lender might require you to purchase more coverage than you would otherwise, leading to higher bills. Many lenders require drivers to buy full coverage and gap or loan/lease insurance and to hold policies with low deductibles. That way, if something happens, they know you’ll be able to pay back the cost of the vehicle.
In general, it’s best to purchase as much coverage as you can afford. You never know how much you need.
|Type of coverage||The minimum limit we recommend|
|Bodily injury liability coverage||$500,000 (combined with property damage), or greater than your net worth|
|Property damage liability coverage||$$500,000 (combined with property damage), or greater than your net worth|
|Comprehensive coverage||Actual market value of your vehicle|
|Collision coverage||Actual market value of your vehicle|
|Uninsured/underinsured motorist coverage||$500,000, or greater than your net worth|
|Medical payments coverage||$500,000, or greater than your net worth|
All of these coverages come with a deductible, except for bodily injury and property damage liability. Uninsured/underinsured motorist coverage pays for your property damages and medical costs if someone with insufficient or no insurance hits your car. It usually includes hit-and-runs and instances where you’re hit as a pedestrian. Medical payments coverage is for your medical costs after an accident, including treatment of injuries, legal expenses if you’re sued, and funeral costs.
To find the best auto insurance for you, compare quotes from at least three companies. The best quote is affordable, but still provides high-quality coverage.
You can compare car insurance quotes for teachers from several providers, including Horace Mann and Liberty Mutual. Horace Mann offers teachers the Educator Advantage package, which includes various benefits:
Liberty Mutual offers teachers discounted auto insurance with these benefits:
RV insurance works similarly to car insurance, though you must purchase it as a separate policy. Like regular car insurance, most RV insurance includes liability, comprehensive and collision, and under/uninsured motorist coverages. RV insurance also offers add-ons that are unavailable with car insurance:
To find out how your car insurance compares, look up the average rates of auto insurance in your state by demographic. Age and ZIP code are two of the most important factors. On average, Americans pay $1,070.47 every year for auto insurance, but rates vary by state. The following chart details the average annual spending on car insurance in 2019 in each state, according to the National Association of Insurance Commissioners.
|State||Average spending on car insurance per year|
|District of Columbia||$1,289.93|
2018/2019 Auto Insurance Database Report. National Association of Insurance Commissioners. (2022).
Find the Best Car Insurance Quotes & Rates. Geico. (2022).
Rating Services Information Services. AM Best. (2022).
Choosing an insurance company. Insurance Information Institute. (2022).
Typical components of an auto insurance policy. Allstate. (2018).
Which States Restrict the Use of Credit Scores in Determining Insurance Rates?. Experian. (2020, September 23).
Traffic Safety Facts Annual Report Tables. NHTSA. (2021, May 25).
What affects car insurance premiums?. State Farm. (2022).