Not all car insurance is the same. If you want cheap car insurance, you have to choose the lowest amount of coverage that’s legally required. This “bare bones” coverage usually consists of liability insurance at the lowest legal limits. If you cause an accident, it pays for others’ property damage and medical bills and that’s it. For more coverage, you have to raise the limits and buy optional coverages, which bring the price of insurance a lot higher.
To get the cheapest car insurance, choose the liability option with the lowest numbers, don’t buy optional coverages and ask about car insurance discounts. This will give you the cheapest car insurance quote from that insurer.
If you know what coverage you want to buy, start comparing quotes from multiple insurance companies. To find out more, keep reading.
Cheapest Car Insurance Companies in Your State for Full Coverage
If you don't want bare-bones coverage, but want to know who has the lowest rates, you need to do some comparison shopping. Below you'll see how major car insurance companies compare for price for full coverage in your state. Enter your state in the search field to see major insurers ranked cheapest to most expensive.
|State||Company||Average annual rate|
|Florida||21st Century Centennial||$1,972|
|Iowa||Amco Ins Co||$645|
|Idaho||Depositors Ins Co||$863|
|Illinois||Amco Ins Co||$678|
|Mississippi||Progressive Gulf Ins Co||$1,268|
|North Carolina||State Farm||$845|
|North Dakota||State Farm||$1,132|
|North Dakota||Mid Century||$2,560|
|New Hampshire||State Farm||$1,036|
|New Jersey||21st Century Centennial||$762|
|New Jersey||Allstate NJ||$1,761|
|New Jersey||State Farm||$1,847|
|New Mexico||State Farm||$1,177|
|New York||State Farm||$1,855|
|Rhode Island||State Farm||$1,132|
|South Carolina||State Farm||$1,511|
|South Dakota||Mid Century||$982|
|South Dakota||State Farm||$1,052|
|West Virginia||State Farm||$1,309|
*Rates were fielded by Quadrant Information Services from up to six major insurers in nearly every ZIP code of each state. Driver profile: male, age 40, married, clean record and good credit, driving 2016 Honda Accord.
As you can see, among top insurers from whom rates were commissioned, Geico is the cheapest car insurance company in the nation's capital and every state, except the following, for full coverage:
- North Carolina
- North Dakota
- New Jersey
- Rhode Island
Here are nationwide average car insurance rates by company, for full coverage:
- Geico: $901
- Nationwide/Allied; $1,227
- State Farm: $1,313
- Farmers: $1,351
- Progressive: $1,415
- Allstate: $1,758
Cheapest Car Insurance Companies in Your State for Minimum Liability Coverage
If you want to see how companies compare on price, below are average rates by company, for each state's minimum liability coverage, the amount you need to drive legally. Based on autoinsurancegeeks.com's rate analysis of six major insurers, Geico was the cheapest car insurance company in 37 states and in the District of Columbia. Enter your state in the search field to find the cheapest car insurance company for minimum coverage where you live.
|State||Company Name||Average annual rate|
|Michigan||Geico Ind Co||$568|
|North Carolina||State Farm||$257|
|North Dakota||State Farm||$283|
|New Hampshire||State Farm||$378|
|New Jersey||State Farm||$897|
|New Mexico||State Farm||$347|
|New York||State Farm||$872|
|Rhode Island||State Farm||$398|
|South Carolina||State Farm||$568|
|South Dakota||State Farm||$236|
|West Virginia||State Farm||$374|
As you can see, among top insurers from whom rates were commissioned, Geico is the cheapest car insurance company in the nation's capital and every state, except the following, for state minimum liability coverage:
- North Carolina
- North Dakota
- New Jersey
- Rhode Island
Here are nationwide average car insurance rates by company for state required minimum liability coverage:
- Geico: $338
- State Farm: $454
- Nationwide: $523
- Progressive: $552
- Farmers: $659
- Allstate: $667
Liability limits are usually written like this: 30/60/25. In this example, using Texas minimum requirements, the numbers show coverage that would pay:
- medical expenses of up to $30,000 per person for those you injure in an accident
- medical expenses up to $60,000 per accident for others' injuries
- up to $25,000 for property damage to another driver's vehicle or property
To give you an idea of how much state minimum coverage costs, here are average annual rates for the cheapest car insurance coverage in every state.
Methodology: The table shows the average annual rate for a 2016 Honda Accord for nearly all ZIP codes in the state for minimum coverage from up to six major carriers including Progressive, Allstate, State Farm, Nationwide, GEICO and Farmers. In some states, uninsured motorist coverage and/or personal injury protection coverage is mandatory in addition to liability. For those states, these coverages are included in our average rate shown in the chart, though we list just the state minimum levels for liability. Data was provided for autoinsurancegeeks.com by Quadrant Information Services. New Hampshire doesn’t require drivers to have car insurance, but most drivers do, and we’ve listed what is mandated if you choose to carry coverage. Driver profile is male, age 40 with good credit and clean driving record.
Going with the minimum liability car insurance required by your state is rarely recommended. The amount of coverage required by state law is low, which means even a minor accident can exceed the amount your insurer will pay out. "You should be careful to have adequate coverage to fully protect your vehicle and other assets so you don't get stuck with out-of-pocket expenses," says Penny Gusner, consumer analyst for autoinsurancegeeks.com. But there are a few scenarios in which having minimum coverage may be a good strategy. Here are four:
1. Your car is old and not very valuable, so you skip comprehensive and collision
Collision coverage pays to repair your car if you're in an accident. Comprehensive coverage pays to replace your car if it’s stolen and pays for damages from fallen objects, like a tree, and from fire, floods, animal strikes and vandalism. Both of these types of protection are optional. Comprehensive and collision only pay out up to the actual cash value of your car. That’s why these coverages may be unnecessary if the vehicle isn't worth much.
"This is especially true for a car that you aren't driving as much, such as an extra car that sits most of the time and you want to pay as little as possible for insurance," says Gusner. “If you are looking to save to buy a newer car, then by dropping down coverage to state minimum you can put away the money saved for the replacement car."
William Harris, an independent insurance agent in Los Angeles, echoes Gusner, but points out the consequences. "Dropping comp and collision could be reasonable, but remember that, if it's your only car, you'll have to pay for any body work or be prepared to drive around a car that looks like a wreck."
2. You don't drive very much.
If you log few miles on your car, Gusner says minimum coverage may suffice, simply because the less you drive, the less risky your driving experience will be.
"If you are retired, work from home or otherwise don't drive much, then dropping liability coverage to the lowest possible limits can save you money," she says. "You aren't as likely to be in an accident as someone who commutes to and from work each day or drives for work."
She adds that consistently driving few miles each year will likely snag a low-mileage discount.
3. You don't have a home, big savings or other assets to protect.
If you're in an accident, the other driver or drivers can sue you to cover damages beyond what your insurer pays out, which puts all your assets at risk. But if you don't have any assets to target, it's less likely you'll be sued, says Gusner.
But that comes with a strong warning: "Just because you don't have much doesn't mean a lien can't be placed against you, or that your license and registration can't be suspended if you cause an accident and can't pay for all damages," Gusner says. "If you don't want to end up in that type of situation, then it's wise to buy higher liability limits if you can afford it."
4. You want to wait until dings are off your record and full coverage becomes cheaper.
Points are placed on your traffic and insurance record for most moving violations and accidents that are your fault. These points figure into the mix that insurers use to determine how much you pay. High-risk drivers mean higher risks for insurance companies and higher rates for you if you have a less-than-stellar driving record.
These points usually follow you for a few years. Esurance, for one, says moving violations will be used when setting premiums for three years, which gives motorists the opportunity to get lower rates after that time. Most insurers follow similar guidelines.
Until your rates drop, however, you may decide to buy only minimum liability insurance to save money, Gusner says.
"Insurance may be costing you more than average due to violations or accidents on your record," she explains. "While it's always wise to carry higher liability limits if you can, carrying bare-bones basic car insurance is better than nothing.
Try to work on keeping a clean record and within three years your rates should drop so that you can afford higher limits."
There are other ways high-risk drivers can find affordable rates. One way to keep costs low is to buy a policy from a company that sells the majority of its policies to high-risk drivers. A company that provides coverage to just a few high-risk drivers will generally charge you more than a company that specializes in high-risk drivers, Gusner says. Typically, car insurance companies that cater to high-risk drivers offer policies with limits. For instance, they may just cover you, and not those you lend your car to, which helps keep their rates low.
How to get the cheapest car insurance: Frequently asked questions
But what if you want more than the state minimum coverage, and still want to save money? The savings are in the details. Car insurance discounts come when you’re different from the average driver. Sometimes it’s your profession, sometimes it’s your grades, and sometimes it’s your long accident-free record. But sometimes the cheapest car insurance simply means avoiding the most common car insurance pitfalls. If you don’t see the answer to your question here, ask Penny Gusner, our consumer analyst, your own question.
The most widespread car insurance discounts are:
- Multi-vehicle: You insure more than one vehicle with the same company.
- Multi-line: You have homeowners and car insurance through the same company.
- Auto safety features: You have airbags, anti-lock brakes or stability control in your car.
- Anti-theft devices: You have a car alarm, VIN-etched windows or GPS recovery system such as Lojack or OnStar.
- Defensive driver courses: You have recently taken a defensive driver course (only available in certain states).
- Safe driver: You have not had any accidents, tickets or claims in the last three to five years (depending on company guidelines).
- Renewal: You have continuous insurance or renew your policy with the same carrier.
Note that not all discounts are available with all auto insurance companies or in all states, and discount eligibility rules can differ.
Yes, you can take car insurance off your vehicle if you are not going to be driving it. This will of course save you money, but you will have to turn in your plates and registration in most states.
It will be harder to get cheap car insurance with a lapse in coverage. Most insurance carriers will charge you more if you have not had continuous coverage. There are some car insurance companies that require no lapse in coverage to get the more affordable car insurance rates under their preferred or standard driver rating.
Can I take my child off my policy if he or she moves out or goes off to college?
If your child moves out and no longer uses your vehicles, then you can normally take him or her off of your policy. Your car insurance company may require you to prove that your child lives elsewhere or has an auto insurance policy of his own.
If your child has gone off to college, you may or may not be able to take them off your policy to get cheap car insurance prices; it will depend on the guidelines of your insurer. Many car insurance companies will reduce your premiums if your child is going to school more than 100 miles away from your home. If your child was a primary driver on a car, see if your insurer will let you bump him or her down to an occasional driver.
Should I raise my deductible to lower my rate?
The cost-cutting can be significant if you go this route. Loretta Worters, the III's vice president of communications, says you can save as much as 15 to 30 percent on collision and comprehensive coverage by raising your deductible from $200 to $500. Hike it to $1,000, she adds, and the savings could reach 40 percent. Just remember paying that deductible is a big out-of-pocket expense if there's an accident. And there's no way to predict if you'll end up saving money in the long run. But, clearly, it does reduce the premium, so consider the consequences, both good and bad, before making a decision.
Will my credit history prevent me from getting cheap car insurance?
Your credit history can have a big impact on your car insurance. That means if you want the cheapest car insurance rates you can get, maintain good credit –- ideally a score of 700 or higher.
If you already have a poor credit history, try to improve it before you shop for a new policy. Here’s why: Drivers with good credit ratings are favored by insurers because they file fewer claims and tend to pay their bills promptly, studies show. In turn, insurance companies are likely to give the best rates to those with clean credit and good credit-based insurance scores. Your score is based on your payment history, outstanding debt, credit history length, pursuit of new credit and mix of credit. (Note that California, Hawaii and Massachusetts don't allow insurers to use credit information to set rates.)
autoinsurancegeeks.com commissioned Quadrant Information Services to compare full-coverage rates for drivers with average or better credit, fair credit and poor credit. Key findings show:
- The average difference in rates between good credit and fair was 17 percent.
- The difference between good credit and poor credit was 67 percent.
How do I improve my credit-based insurance score to get cheaper car insurance rates?
- Pay your bills on time. Late payments and collections will hurt you.
- Don’t max out your credit cards. Keep your credit card balances low. The insurance score considers the amount you owe in relation to your credit limits.
- Don't open new credit card accounts. Too many new accounts signals trouble to insurers.
- Don’t cancel all your credit cards. The longer you maintain a decent credit history, the better. Having no or little credit history will lower your score.
- Check the accuracy of your credit report; errors will hurt your score. You can request free copies of your credit reports from the three national credit reporting agencies through AnnualCreditReport.com. Follow directions from the agencies to fix any errors.
- If you're struggling financially and can’t pay your bills, get professional finance advice. You can find free or low-cost help through the nonprofit National Foundation for Credit Counseling.
When should I shop around for cheaper rates?
Comparing car insurance rates can help you save hundreds of dollars. That’s because each car insurance company uses its own formula to calculate rates. This means the same policy can have prices that vary significantly among insurers. A rate analysis by autoinsurancegeeks.com shows the average car insurance savings you get from comparing rates ranges from about $3,000 to $350, depending on what state you live in. Gusner suggests comparing car insurance quotes to find the lowest rates at least once a year -- but certainly at these times, when your rates are most likely to change dramatically:
- Purchasing a car
- Putting cars on a multi-car insurance policy
- Adding or removing a driver from a policy
- Marriage or divorce
- Adding a teen driver
- Buying a house
- DUI or major violation
- Change in credit score
How do I know if I should buy comprehensive and collision?
Skip collision and comprehensive coverage and go for just liability if the cost for both, plus your deductible, is close to the actual cash value of your car.
For example, if you have a $500 deductible and your car's value is $2,500, then the most you can recover in a total loss is $2,000. At this point, you need to decide if it is worth it for you to pay for collision and comprehensive coverage.
The annual average cost for comprehensive and collision combined is $440, according to the Insurance Information Institute (III). You can find the actual cash value of your car by looking it up at Kelley Blue Book or the National Auto Dealers Association.
Penny Gusner, the consumer analyst for Insure.com, says the “10 percent rule” may also apply. Consider skipping the optional coverage if it costs more than 10 percent of what you'd get from your insurer following an accident that totals your car. The pay out after a claim would be the value of your vehicle minus your deductible.
Let’s say your car is worth $3,000 and you have a $500 deductible. Your potential payout would only be $2,500 if your car was totaled and you placed a collision claim. Using the 10 percent rule, if your collision and comprehensive premiums cost $250 or more a year, it's time to consider dropping the coverage.
The cheapest car insurance company isn't always the best in terms of customer service
Everyone loves a bargain, but you should also consider customer service along with price when comparing car insurance companies. An Insure.com survey of 3,700 customers yielded the following results, with all scores out of 100.
Note that Geico was the cheapest car insurance company among those surveyed in autoinsurancegeeks.com's rate analysis, as outlined in the charts above. But in Insure.com's "Best Car Insurance Companies" survey, Allstate scored No. 1 in value for the price, customer service and claims handling. Allstate and Progressive have higher overall scores than Geico. Although by a narrow margin, Geico placed last on customer service, and was beat by Allstate, Nationwide and Farmers on claims handling.
Auto insurance companies ranked on value, customer service and claims handling
|Company||Value for Price|