Like it or not, most of us will need to purchase and maintain auto insurance policies throughout our lives — not only to protect ourselves but to meet the legal requirements to drive. While insurance requirements and minimum coverage amounts can vary depending on where you live, everyone who drives in the United States is required to have auto insurance in some form.
How much you’ll pay for auto insurance depends on a variety of factors ranging from your age to your driving history, what kind of car you have, and even your credit score. However, there’s another factor that can play a role in your rates — how often you shop around for a new, less expensive policy.
If you’ve had auto insurance for a while, you’ve probably noticed that your rates have slowly inched up over time. Unfortunately, the only way to have cheap auto insurance forever is being willing to switch insurers every few years.
Table of Contents:
- Best Cheap Car Insurance Companies
- Average Cost of Cheap Car Insurance
- Best Way to Save on Car Insurance
Which Car Insurance Company Has the Best Value?
Getting a fair deal on car insurance is all about figuring out how much coverage you need and shopping around until you find a policy you can afford.
While you should consider a wide range of insurers when you shop for a cheap auto insurance policy, the following companies tend to offer low, affordable rates for high-quality insurance that will help you sleep better at night:
- State Farm
- Erie Insurance
- Amica Mutual
While auto insurance from USAA is only available to military members and select family members, this insurance provider offers some of the cheapest auto insurance rates around. They even claim their members saved an average of $707 when switching from another insurer to USAA.
In addition to low car insurance rates, USAA offers sweet discounts for bundling multiple policies, having a clean driving record, taking part in defensive driving training, and more.
USAA also received high marks in more than one region of the U.S. in J.D. Power’s 2019 U.S. Auto Insurance Study, which featured insights from over 42,000 auto insurance customers nationwide.
Most of us think of GEICO Insurance as the company that always features that adorable green lizard. However, GEICO is the second-largest auto insurance in the nation. They also feature a 97% customer satisfaction rating, and this is partly due to the low rates they offer clients who want to save money.
Despite the company’s affordable auto insurance rates, GEICO still receives high marks for customer service. In fact, they rated in the top 5 in six different regions within J.D. Power’s 2019 U.S. Auto Insurance Study. The company makes it easy to get a free insurance quote online and they offer a variety of discounts that can help you cut rates even further. What’s not to love?
We all know Flo, the quirky and persuasive spokeswoman that peddles auto insurance from Progressive on television. The savings she promises may very well be accurate. The company notes from their research that customers who switched to Progressive saved $699 on auto insurance their first year.
Progressive makes it easy to get a free, no-obligation quote for auto insurance online, and they offer a variety of discounts that can help you reduce your premiums. This includes discounts of 5% or more for bundling an auto insurance policy with homeowners or renter’s insurance policy. This is probably why they currently have over 18 million customers at any given time.
#4: State Farm
State Farm is another nationally known insurance company who offers affordable rates for car insurance. They also offer discounts for safe driving, bundling more than one policy, anti-theft devices, and more.
State Farm also ranked in the top 5 in nine regions identified by J.D. Power in their most recent auto insurance satisfaction study, which considered factors like policy offerings, price, and customer service. They also make it easy to get a free quote for auto insurance online, so there’s no excuse.
There’s a reason they say “you’re in good hands” with Allstate Insurance. Not only does this company offer high-quality insurance products, but they offer rates most people can afford. Allstate also offers a variety of discounts for having a clean driving record, having multiple policies, having certain safety features installed on your car, and more.
Since Allstate lets you personalize your policy to meet your unique needs, it’s easier than ever to purchase the exact amount of auto coverage you want and need. Allstate also lets customers fill out some basic information and get a free quote online, and they promise to guide you to make sure you get at least the required minimum coverage amount in your state.
#6: Erie Insurance
Erie Insurance offers affordable auto insurance coverage with plenty of interesting coverage inclusions you may not expect. Their basic polices include coverage for pets, personal items, auto glass repair, and roadside assistance, for example.
One small downside of Erie Insurance is that they want you to speak with an agent after you offer some basic information about your policy needs online. However, Erie Insurance does get high marks for customer service. They even received the #1 spot for auto insurance satisfaction in the Mid-Atlantic region in J.D. Power’s latest study.
#7: Amica Mutual
Amica Mutual claims their customers save an average of $596 when they switch auto insurance companies and buy one of their policies. They base their savings promises on the fact they offer lower rates than other insurance companies and a wide range of discounts that almost any consumer could benefit from.
If you want to see how much you’ll pay for insurance from Amica, make sure to log into their website for a free quote.
Not only does Amica Mutual have an A+ rating with A.M. Best, but they have received excellent rankings from J.D. Power as well. In fact, J.D. Power gave Amica Mutual the #1 spot within their auto insurance ranking in the New England region in 2019.
How Much Does Cheap Car Insurance Really Cost?
According to a 2019 study from Insure.com, the national average cost for an auto insurance policy worked out to $1,457 this year. However, that doesn’t tell the whole story, nor does knowing the national average help anyone figure out how much they’ll pay for auto insurance coverage.
In reality, the price of the auto insurance policy you wind up with depends on a whole host of factors, some of which are beyond your control.
Where you live is one of the factors you may not have a lot of power over. Different states require different limits and coverage amounts for their residents, and some states are just more expensive than others in general.
If you’re curious about whether where you live could play a role in how much you pay for auto insurance, consider the most expensive states and least expensive states in 2019 according to Insure.com.
Most expensive auto insurance policies in 2019, by state:
- Michigan: $2,611
- Louisiana: $2,298
- Florida: $2,219
- Oklahoma: $1,966
- Washington D.C.: $1,876
- California: $1,846
- Rhode Island: $1,834
- Delaware: $1,828
- New York: $1,789
- Texas: $1,779
Least expensive auto insurance policies in 2019, by state:
- Maine: $845
- Wisconsin: $951
- Idaho: $1,040
- Iowa: $1,047
- Virginia: $1,063
- New Hampshire: $1,087
- North Carolina: $1,095
- Vermont: $1,100
- North Dakota: $1,164
- Ohio: $1,175
The Best Ways to Save on Car Insurance
Finding cheap car insurance isn’t overly difficult, but there are steps you can take to make the process even easier. You may not be able to move to another state to save, but spending a few hours researching all your options can go a long way toward reducing your auto insurance premiums this year.
The following tips can help you pay less for auto insurance without sacrificing the coverage you need.
There’s a reason most auto insurers claim you can save money if you switch insurers. While some insurance companies do offer lower rates in general, you will almost always save money if you shop around for rates and switch insurers once you find a policy that suits your needs.
Most experts suggest comparing auto insurance rates from at least 3 or 4 companies before you pull the trigger. If you only shop for a policy with one insurer, you won’t have any way to compare pricing from one company to another.
Check for Discounts
Auto insurance discounts can also play a role in how much you’ll pay with various insurance companies, and they may not be as hard to qualify for as you think. Some insurance companies offer discounts for people who take a defensive driving class, while others give deep discounts for customers with squeaky clean driving records.
Additional discounts may be offered for specific safety equipment, anti-theft devices, and even good grades if you’re still in college.
Drive a Cheaper Car
The car you drive will undoubtedly play a role in how much you pay for auto insurance, which is one of many reasons you should try to steer clear of expensive cars with pricey monthly payments. Newer cars will cost more money to replace, and that always means higher insurance prices on top of the ridiculous sticker price.
If you’re able to drive an older, paid-off car, you’ll also be able to purchase a lower level of coverage that will cost less money in the long run. For example, you may be able to go without comprehensive or collision coverage altogether depending on how much your car is worth.
Improve Your Credit Score
Believe it or not, but your credit score can also play a role in how much you pay for auto insurance. Not surprisingly, bad credit can easily push your rates up while good or great credit has the opposite effect. (See also: What is Good Credit?)
If your credit score needs some work, taking steps to improve it over time can go a long way toward helping you pay less for auto insurance over time.
Looking for easy ways to improve your credit? Make sure you’re paying all your bills early or on-time since your payment history makes up 35% of your FICO score. Also, consider paying down debt since the amounts you owe in relation to your credit limits make up another 30% of your score.
Other tips that can help boost your score include refraining from opening or closing too many new accounts and keeping old accounts open to extend the average length of your credit history.
Choose a Policy with a Higher Deductible
The amount of coverage you buy will impact your auto insurance rates, but you can reduce your monthly insurance costs if you opt for a higher deductible. You’ll pay more out-of-pocket if you need to file a claim this way, but you can save money on your monthly and annual insurance costs. Ideally, you won’t have to file a claim and you can pocket the savings.
Buy State Minimum Coverage
State minimum coverage amounts are a huge factor that can impact your auto insurance rates. If you live in a state with high minimum coverage amounts like Alaska or Maine, you will undoubtedly pay higher insurance rates no matter how hard you try not to.
If you’re curious about minimum coverage in your state, you can find out how much you’re legally required to buy from the Insurance Information Institute.
Just remember that there are risks that come with buying state minimum coverage, and that includes being sued if you’re at fault in an accident and your coverage isn’t enough to pay for medical bills, auto repairs, and other claims made against you.
While switching auto insurers is a good way to save money, you can often save even more if you’re willing to move other types of insurance you have to a new insurer. You may be shopping for auto insurance, but it may be smart to also get a quote for homeowner’s insurance, renter’s insurance, and any other policies you have.
If you’re willing to move all your policies to a new insurer, it’s possible to save money without losing your coverage amounts.
Tailor Your Policy to Your Needs
Also remember that, while you can buy insurance for everything under the sun, you don’t have to. As we mentioned already, comprehensive and collision coverage may not be important if your car is inexpensive and would be easy to replace.
The same is true for add-on coverage you can buy to insure everything from your personal belongings to your front windshield. The more insurance you can go without, the less you’ll pay overall.
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