As tempting as it may be, when looking at auto insurance, you don’t want to focus solely on price. That’s because the quality of the insurance provider will inform your experience when you make a claim or want to take advantage of great mobile tools. Bottom line: All auto insurance companies aren’t created equal.
That said, it is possible to find good auto insurance companies with low premiums and great service. And here, we’ve done the heavy lifting for you.
To determine auto insurance rates, providers use an algorithm that changes every year. That equation factors in new statistics on driving behaviors and customer requirements that could lower or increase rates. Because rates are constantly changing, it can be difficult to determine which insurance provider will give you the best price.
To simplify your affordable car insurance shopping journey, we’ve put together a comprehensive guide to compare some of the best known insurance providers and their affordability. Out of the top 25 licensed auto insurance providers, we’ve identified the five auto insurance companies we like best for cheap auto insurance, which we review below.
At The Simple Dollar, we created the SimpleScore rating system for our readers to compare and better understand their options while shopping for auto insurance. For the best cheap car insurance, we compared the top 25 car insurance providers, then rated them all on a scale of 1 to 5. We looked at discounts, coverage options, customer satisfaction, support and accessibility, then calculated the overall score for each.
We also looked at reputable experts in the field, including J.D. Power, AM Best, Consumer Reports and the Insurance Information Institute. These organizations measure customer satisfaction and financial strength, two of the most important aspects to consider when choosing an insurance company.
The best cheap car insurance providers of 2021
|Company||Why we like them||Average full coverage||Average minimum coverage|
|Amica Mutual||Best overall for car insurance||$1,378||$405|
|USAA||Best car insurance for military members||$1,225||$384|
|State Farm||Best car insurance for mobile tools||$1,457||$539|
|Geico||Best car insurance for customer service||$1,405||$433|
|Progressive||Best car insurance for discounts||$1,509||$582|
Data is from Bankrate, which uses Quadrant Information Services to analyze rates. Quoted rates are based on a 40-year-old male and female driver with a clean driving record and good credit.
Compare the cheapest car insurance companies
Consider smaller insurance companies
Smaller insurance companies are not listed in our top picks due to limited regional availability, but these companies can provide a lower cost compared to national companies. It’s important to shop around within companies licensed in your state or region to find the best rate. We found that drivers paid $1,043 as an average annual premium with Erie Insurance. This stacks up with providers such as USAA and Geico. Below are examples of a full coverage annual premium for a sample of regional companies.
|Smaller regional carrier||Average full coverage premium|
|Main St. American Company||$658|
|Virginia Farm Bureau||$968|
|Oregon Mutual Insurance||$1,054|
Car Insurance Rate Data. Premiums are assuming a 30-year-old with good credit who drives a 2017 Honda Civic.
Discounts and good habits that save money on car insurance
While insurance companies track a few things that are outside of your control, such as your age or gender, there are other aspects of your profile that you can alter. Smart shopping for car insurance is well worth your while, because you will likely be rewarded when you qualify for discounts or when you change your behavior.
For example, work on improving your driving and focus on improving your credit score. Also, taking full advantage of discounts can help you land cheaper car insurance. Discounts can include everything from company loyalty to using autopay or paying for the full year in advance.
Car insurance discounts come in a variety of types. There may be car insurance discounts for your age, if you are a college student, work field, type of car or your driving habits. Some of the discounts you can expect when you’re looking for the best cheap car insurance include:
- Bundled insurance
- Autopay discount
- Pay in advance
- Paperless statements discount
- Good student
- Hybrid or electric vehicle
- Defensive driver course completed
- Anti-theft system
- Garage parking
- Anti-lock brakes
- Safety equipment
Save time by using an online quote tool to get a quick snapshot of potential rates from several auto insurance companies at once. It also helps you avoid price optimization, where rates are established not just on how risky a driver is to insure but also on how much insurance companies think they’re comfortable paying. Getting new quotes regularly is the best way to avoid price optimization because insurers can see how often you shop around and therefore how likely they are to lose you as a customer.
Many car insurance companies will give you a discount if you have other policies with them. The most common policies for bundling are home and auto insurance. However, you may get a break on low-cost insurance if you use the same provider for life, home, auto or renters insurance policies. Bundled policies are convenient too; you’ll be dealing with only one bill and one company. Keep in mind that every insurance company offers a different amount of savings for policy bundling.
Boost your deductible
Raising your deductible is a good move if you have cash stashed away to pay a higher deductible in case of a crash. Factors such as your age and driving record will also affect how much raising your deductible will actually save you.
Drive a low-risk car
Luxury cars are always the most expensive to insure. These cars also cost a lot more to fix and are attractive targets for thieves. Family-friendly vehicles including minivans, sedans and smaller SUVs cost the least to insure. Their drivers tend to be more careful and are simpler to fix, ultimately creating fewer claims. Based on our research, the Honda Odyssey XL, Jeep Wrangler Sport and Subaru Outback 2.5i are the cheapest cars to insure. All three cars have annual premiums of around $1,300.
Change your driving habits
If you get speeding tickets, your bill will skyrocket. If you’ve had a clean driving record for years, you will have cheaper car insurance. Driving less is the simplest, easiest way to change your driving habits. Many states have already outlawed texting and driving. Another good tip is to exercise patience and come to complete stops when necessary. Tell your insurer about your new habits to receive the best insurance rates. Some insurance providers offer in-car technology that identifies safe driving habits, like State Farm’s Drive Safe and Save and Progressive’s Snapshot.
Maintain good credit
Most car insurance companies look at your credit score to help determine your rate. According to consumer advocacy group United Policyholders, a rock-bottom credit score could mean you’ll pay double, triple or even quadruple over someone with a perfect credit score. This controversial practice is illegal in four states: California, Hawaii, Maryland and Massachusetts. If you don’t live in one of those states, working to raise your credit score can help you get affordable auto insurance.
How can I keep my insurance cheap after an accident?
Your car insurance rate will increase after an accident. There isn’t a specific dollar amount because the rate increase depends on the severity of the accident, and who was at-fault. An accident you cause will probably result in the biggest increase. In most states, a car accident stays on your driving record for three to five years, after which time your insurance rate will decrease, barring other issues.
However, there are several ways you can avoid the rate hike after an accident. First, see if your insurance provider offers accident forgiveness. It’s usually sold as an add-on policy, so it will increase your rate somewhat. But it can be a major lifesaver if you get into a minor crash.
If your car insurance provider offers a discount for taking a defensive driving class, now is the time to do it. You might be losing a claims-free discount, so make sure you’re taking advantage of every discount you qualify for. If you’re still facing a massive rate increase, consider shopping around for a cheaper policy from a different provider.
What types of car insurance coverage do I really need?
When you purchase car insurance, you’ll have to decide whether you want to opt for liability coverage or full coverage car insurance. Full coverage insurance, which includes comprehensive and collision coverage, comes with a heftier price tag than liability-only insurance. If you took out a loan to pay for your car, you probably don’t have a choice — your lender will require proof of comprehensive and collision coverage. Dropping this coverage usually isn’t a good idea if your car is worth a decent amount of money.
There are situations when opting only for liability makes sense. For instance, if you drive an older, paid-off vehicle that doesn’t have much value to anyone but you, keeping only liability coverage can mean significant savings. Comprehensive and collision coverage may also be overkill on an older car you drive sparingly.
[ See: Auto Insurance Quotes, Explained ]
Just as some coverages are absolutely necessary, there are optional add-ons you may decide aren’t necessary. A common add-on to a car insurance policy is personal injury protection, which pays your medical expenses after a crash. If you’re trying to keep your bill low, personal injury coverage probably isn’t a smart buy as long as you have a good health insurance plan — there would be too much overlap between the two policies.
There are also uninsured and underinsured motorist coverages, which get you off the hook after a crash where the other driver is at fault but doesn’t carry enough (or any) insurance and can’t afford to pay. Other add-ons pay for rental cars while your car is being fixed and for roadside assistance. As for other little add-ons, consider skipping them. If you can cover the cost of a rental (or borrow a car from a friend while you’re in a jam), rental-car riders are unnecessary and an AAA membership is often a better deal than roadside assistance coverage if you have an older vehicle.
Minimum coverage car insurance
The state’s minimum coverage requirement is usually the cheapest car insurance available, but state minimum coverage varies. For example, Alaska requires drivers to have a policy of 50/100/25 as a minimum legal amount, meaning $50,000 for bodily injury per person in an accident, $100,000 for bodily injury total per accident and $25,000 for property damage. In contrast, California’s minimum is lower than Alaska’s at 15/30/5.
We welcome your feedback on this article and would love to hear about your experience with the car insurance companies we recommend. Contact us at firstname.lastname@example.org with comments or questions.