With so many car insurers to choose from in most areas of the United States, finding the right one for your situation can be a challenge. Use this guide to help you narrow down the choices based on cost, driving history, and other relevant factors.
Most Affordable Car Insurance Companies
Drivers in different states have dramatically different car insurance rates based on the minimum coverage requirements in each state. According to the insurance website Value Penguin, State Farm is the most affordable car insurance option that is widely available to drivers, since they write policies in more than 40 states and often have the lowest average quotes.
While USAA often has the most affordable average rate quotes, these policies are restricted to current and former military members and their families. Value Penguin also recommends shopping around for low rates with small insurers in your area. For example, Farm Bureau affiliates tend to offer the best car insurance premiums for drivers who live in Utah, Virginia, Nebraska, and Georgia.
Value Penguin also found that Erie offers the most affordable overall policies, although this company does not have the same reach as State Farm and may not be available in your area. In addition to offering the cheapest widely available rates, State Farm also offers the cheapest average rates for drivers who have had an accident in the past. For low mileage drivers, Metromile tends to offer the best rates. If you have poor credit, try getting a quote from your local Farm Bureau Insurance affiliate.
Most Affordable Companies for Teen Drivers
According to auto insurance website The Zebra, these companies have the most affordable average six-month premiums for drivers ages 16 to 19:
- GEICO – $1553
- American Family – $1600
- USAA – $1666
- State Farm – $1688
- Nationwide – $1721
- Travelers Insurance – $1835
- Farmers Insurance – $2465
- Progressive – $2547
- Allstate – $2945
- Liberty Mutual – $3332
Most Affordable Auto Insurance Companies After an Accident
While rates tend to go up after you have an auto accident, Nerd Wallet reported that these companies have the most affordable average full-coverage policies for drivers in this situation, with six-month rates that increase as follows:
- USAA – $888, which is a 35 percent increase
- Erie – $962, which is a 26 percent increase
- State Farm – $1038, which is a 19 percent increase
- Farm Bureau Insurance – $1338, which is a 50 percent increase
- American Family – $1481, which is a 45 percent increase
- Nationwide – $1566, which is a 37 percent increase
- GEICO – $1570, which is a 46 percent increase
- Auto-Owners Insurance Company – $1371, which is a 30 percent increase
- Progressive – $1907, which is a 59 percent increase
- Travelers Insurance – $1929, which is a 28 percent increase
- Allstate – $2680, which is a 51 percent increase
- Farmers – $3011, which is a 41 percent increase
These rates represent the average cost of liability, comprehensive, and collision policies, commonly known as full coverage.
Most Affordable Auto Insurance Companies for Drivers Who Have Poor Credit
If you live in Michigan, Massachusetts, Hawaii, or California, state law bans the practice of using credit scores to price auto insurance policies. In other states, you will pay more if you have a low credit score. Farm Bureau Insurance tends to offer the best rates for drivers who have poor credit, although this company does not have an affiliate in every state.
According to Value Penguin, Farm Bureau Insurance offers the most affordable rates for drivers who have low credit scores. Their average quote for a driver with poor credit was about 36 percent higher than a quote for a comparable driver who has excellent credit. These are the average premium cost increases by company for poor-credit drivers:
- Farmers Insurance – 112 percent
- State Farm – 90 percent
- Auto-Owners Insurance – 87 percent
- Allstate – 65 percent
- American Family – 63 percent
- Progressive – 59 percent
- GEICO – 57 percent
- Travelers Insurance – 46 percent
- Erie – 39 percent
- Nationwide – 33 percent
- USAA – 33 percent
Shopping for Car Insurance
According to CarInsurance.com, shopping around to get rates from different companies can help you save money on auto insurance. Taking the time to research helps you find the best rates for your specific financial situation, vehicle, and driving characteristics.
You should also make sure you are purchasing the right amount of car insurance and policy types for your needs. You want to have appropriate financial protection and meet the minimum legal coverage requirements in your state without paying for extras you don’t need. Defining your desired amount of coverage in advance helps you compare apples to apples when looking at insurance company quotes.
Every state except Florida requires bodily injury liability coverage. If you cause a crash in which other people are injured, this policy pays their medical expenses. You should carry about the same amount of liability coverage as your total net worth. Property damage liability is also a requirement in all 50 states and pays for other people’s property damage costs if you have an at-fault accident. As with bodily injury liability, you should carry a policy in about the same amount as your total net worth.
Twenty-two states require uninsured/underinsured motorist coverage. This type of policy covers your property damage and medical expenses after an accident caused by a driver who does not have insurance.
Comprehensive and collision coverage pays for damage to your vehicle regardless of fault. Collision pays for damage caused by an auto accident while comprehensive is for non-collision events such as extreme weather, theft, and vandalism. If you lease or finance your vehicle, the lender or leasing company probably requires you to have collision and comprehensive coverage on the car to protect their investment.
Drivers in 14 states have to purchase either medical payments or personal injury protection coverage. These policies pay your medical bills if you have an accident.
Check this out if you need additional information, resources, or guidance on car insurance.
Sources:
The Cheapest Car Insurance Companies (April 2021)
Find the Best Car Insurance Quotes
How Much Property Damage Car Insurance Do I Need?
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