Best Cheap Car Insurance Companies in 2017
Getting the minimum amount of car insurance is risky business. However, not everyone can afford a bunch of extra coverage. And, some people might not need anything but the minimum. In those cases, having state-mandated coverage is far better (read: legal) than having no insurance at all.
But how do you find the cheapest rate? I examined over two hundred fifty quotes from twenty eight different companies and found three auto insurers that suggest the most affordable policies anywhere in the country. Keep in mind, however, everyone’s individual rates will vary.
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How I Chose the Best Cheap Car Insurance Companies
Very first, I found the top five to seven insurance providers in each state by selecting companies with above-average customer satisfaction ratings from J.D. Power and high financial strength marks from A.M. Best. Why? Because cheapest car insurance in Houston, San Diego or Orlando are excellent, but purchasing them from unreliable or fickle insurers could wind up being far more expensive down the road.
Then, with some help from the team at The Elementary Dollar, we applied for over two hundred fifty quotes both online and over the phone from my pool of auto insurance companies from all fifty states. Each member of the team used individual information during the quote process to ensure that we could see who was consistently cheapest across the country with a handful of scripts. What did remain the same, however, was the amount coverage we applied for: each state’s minimum coverage. No frills, no extras; just the absolute minimum coverage to legally drive on the road.
Next, I tallied and compared how many times each company had the very first, 2nd, or third cheapest yearly premium. I awarded five points for very first place, three points for 2nd place, and one point for third place.
As it turns out, the cheap car insurance market is predominated by three main providers: GEICO, State Farm, and Progressive. (The other twenty five insurers didn’t even score high enough to register in my test.) And, as you can see below, GEICO was the breathtaking victor.
GEICO
GEICO was the cheapest option in nineteen of the fifty states. It was also one of the three most affordable options seventy five percent of the time, and its best suggest was often hundreds of dollars cheaper than the next-best competitor. Take these annual quotes for Fresh York, Pennsylvania, and Washington for example.
*Note: Periodically, the reason GEICO was able to hit its competition by such a large margin was because the other insurers required slightly more coverage than the state mandated.
The gecko-loving company is without a doubt the most consistently affordable option out there, so it is worth a shopper’s consideration. And, it’s true, according to my research, it is safe to say that fifteen minutes could often save you “15 percent or more” on a state-minimum policy. However, its range of coverages and discounts don’t particularly shine when compared to a competitor like Allstate. Allstate customers love prepay discounts, low-mileage discounts, interior vehicle coverage, and fresh car replacement — all of which are not suggested at GEICO.
When it comes to customer service ratings, GEICO doesn’t have anything to write home about. (It fell just under the industry average according to JD Power.) But, if you’re dead-set on purchasing the least amount of insurance that you possibly need, then GEICO is your best bet.
State Farm
State Farm had a lower overall score than GEICO, but wound up in the top three a total of thirty eight times (GEICO only placed thirty seven times). When State Farm placed, it usually fell inbetween $30 to $50 dollars of the competition. Tho’, it at times would surprise me with a GEICO-like rate. The two best examples of this are Minnesota and South Carolina. In Minnesota, State Farm was $120 cheaper than American Family, and in South Carolina it hit GEICO by a whopping $223.
Quotes aside, State Farm is the nation’s largest auto insurer. It ranks consistently well for customer satisfaction and rates above average in most of the regions of the J.D. Power survey. It also earns A.M. Best’s top marks (A++) for financial strength. All that’s to say it is a superb choice if you can spare a few extra dollars each month. Plus, it has the best instruments of any auto insurance provider out there, including mobile bill pay, mobile claim filing, and a pay-by-bank account option.
Progressive
Progressive only placed 1st in seven states, and when it did, it was usually less than $20 ahead of the runner-up (which was usually GEICO). That doesn’t mean Progressive is never a viable option, however. Consider the state of Montana, where Progressive came in $22 cheaper for the year. So for less than $Two more each month, a Montana driver could take advantage of mobile claims filing, loyalty discounts, prepay discounts, and low-mileage discounts that GEICO doesn’t suggest.
Where to Find Car Insurance Discounts
Once you’ve seen some quotes, you need to master discounts — the key to cheap car insurance rates. Many insurers have a broad multitude of overlooked deductions that go beyond bundling or insuring numerous vehicles, and some of them are less demonstrable than you may think.
Driving Schools
Driving education is a discount chance many don’t know exist. Drivers who pass an accredited driver’s ed class or defensive driving training are eligible for a sizeable price reduction. The amount of this discount isn’t standardized across the nation or with insurers, but according to DriversEd.com, some drivers might welcome as much as a 10% decrease in their bill. Plus, if you’ve recently received a ticket, enrolling in a defensive driving course can prevent the premium hike on your insurance (most companies only let you do this once every twelve months).
Defensive driving courses cover topics such as traffic laws, drug- and alcohol-impaired driving, and inclement-weather driving and are often available online or at commercial driving schools. Courses for defensive driving can be found through your local DMV or community center. Most run about six hours long and cost anywhere from $50 to $300 a person.
After completing a defensive driving course, participants will receive a certificate that can be introduced to insurance companies to qualify for a discount. Depending on the insurance company, drivers may also have to retake the course and be current on their certification in order to proceed receiving the discount.
If you aren’t the only person covered on your auto policy, consider getting all the drivers on your policy — especially teenagers, as they are expensive to insure — to take a defensive driving course and you will be eligible for extra discounts.
Good Student Discounts
These discounts are typically given to drivers under the age of twenty five who are enrolled utter time at a high school or college or university and are maintaining at least a Trio.0 grade point average (or are on the honor roll or dean’s list).
What about the savings? According to CarInsurance.com, the discount can range anywhere from 5% to 10%, making it one of the most profitable and achievable discounts of all. Consider Travelers, which offers good students up to 8% off.
In order to prove satisfactory academic achievement and receive the discount, students need a current transcript or a letter signed by a school administrator. Students who are homeschooled can present standardized test results, such as their SAT or ACT scores, that are within a desired percentile range in order to qualify. Good grades can proceed saving you money after graduation as some insurance companies extend this discount to post-grads for a limited time.
If you’re a student, or the parent of a student, you can learn even more at The Plain Dollar’s student guide to car insurance.
Safe-Driver Discounts
Drivers with a clean driving record — a standard that is determined by each individual insurance provider — are eligible for hefty discounts. Having a squeaky clean record not only gives you a discount chance; it can also save you a lot more money in the brief term.
There is no universal definition of safe driving, tho’. Insurance companies generally mean avoiding collisions and accidents for which you can be found at fault, and moving violations such as speeding, driving under the influence, or reckless driving.
Resident student discounts
These discounts can be suggested to students attending college more than one hundred miles away from home. They are intended to be used exclusively by those students who are not planning to drive the insured vehicle while at school but may use it while they are home for vacations.
Other Discounts to Consider
- Active-duty military and veterans discounts
- Car alarm systems or other safety equipment discounts
- Paid-in-full or prepay discounts
- Occupation and member discounts
- Low mileage discounts
One of the most significant things you can do while shopping is to ask the insurance company for a finish list of discounts because not all may be advertised.
Major Car Insurance Types
However companies suggest several more nuanced options and add-ons, the three major types of auto insurance boil down to:
- Liability coverage
- Collision coverage
- Comprehensive coverage
Liability Coverage
Liability coverage, required by law in most states, covers the other driver’s individual injury and property harm in a crash where you’re found to be at fault. It does not cover your own injuries or property harm. Buying only liability insurance is always going to be your cheapest option, however not necessarily the wisest. (Sometimes it makes sense to carry only liability coverage, and sometimes it doesn’t.)
You’ll most likely see your liability coverage written like this on your quote or car insurance policy: $50,000/$100,000/$50,000 (or 50/100/50). That means you have $50,000 in bodily injury coverage for each person, $100,000 in bodily injury coverage total, and $50,000 in coverage for property harm. Each state requires its own minimum amount of liability insurance.
Buying the nude minimum is tempting since it will keep your rates as low as possible. Unluckily, that’s a bad idea — a bad crash can mean your costs will lightly surpass low state minimums, and then you’ll have to pay up. In North Carolina for example, its minimum for bodily injury is $30,000, but the average cost of a non-fatal disabling auto-wreck injury is over $60,000. If you only have the state’s minimum coverage, you could wind up paying over $30,000 out of pocket. And if you don’t have that kind of money laying around, your other assets become vulnerable.
Collision coverage
Collision coverage covers the harm to your car sustained in a crash. This most commonly covers accidents when you’re found to be at fault, but it may also pay in certain circumstances when another driver is at fault, or in scripts not covered under your other policies.
The cost of your collision coverage will largely depend on your car’s value, but you do control the deductible — the amount you pay out of pocket before your insurance company picks up the rest of the tab.
Comprehensive coverage
True to its name, comprehensive car insurance covers almost any car-related calamity you can think of minus harm resulting from a crash. Instead, comprehensive policies pay for things like auto theft, harm from severe weather, or needed repairs after a late-night rendezvous with a disoriented deer.
Comprehensive coverage is meant to complement collision coverage, not substitute it. Like collision coverage, the cost will depend on your car, but you control your deductible.
What types of car insurance do I truly need?
Comprehensive and collision coverage seem like a wise choice, but they come with a much heftier price tag than liability-only insurance. If you took out a loan to pay for your car, you most likely don’t have a choice — your lender will require proof of comprehensive and collision coverage. Ripping off this coverage usually isn’t a good idea for anyone without the savings to pay for repairs out of pocket.
But, there are situations when opting only for liability makes sense. For example, if you drive an older, paid-off vehicle that you can lightly fix or substitute, keeping only liability coverage can mean significant savings. Comprehensive and collision coverage may also be overkill on any car you drive sparingly.
To see how much I would save on auto insurance by nixing all coverage but liability, I plugged a few stats into a quote generator. I used the persona of a married masculine in his early 30s driving a paid-off two thousand eleven Hyundai Sonata. I said he lives in a puny Southern city, has a clean driving record, and averages 12,000 miles a year. A policy with 50/100/50 in liability, as well as comprehensive and collision policies with $250 deductibles, would set him back $45 a month. Ripping off the comprehensive and collision policies would bring my bill down to just $24 a month — almost half the the cost.
Would I personally drop my comprehensive and collision policies? No, because my two thousand thirteen Jeep Patriot is still relatively fresh and would cost a significant sum to repair or substitute. My brother, however, drives a one thousand nine hundred eighty four Ford F150. At best, it’s worth around $Trio,000 — and his policy is only $Nineteen a month! For him, ripping off comprehensive and collision coverage made a lot more sense.
The bottom line: Liability coverage is your cheapest option and meets the legal requirement, but ripping off collision and comprehensive coverage might be a risky stir if it would be a major financial hardship to fix or substitute your car after an accident.
Add-Ons and Other Types of Coverages
There are a number of other coverage types and add-ons, some of which may be required in certain states. Of particular note is individual injury protection, which pays your medical expenses after a crash.
If you’re attempting to keep your bill low, private injury coverage very likely isn’t a brainy buy as long as you have a good health insurance plan — there would be too much overlap inbetween 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 immobile 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 a AAA membership is often a better deal than roadside assistance coverage if you have an older vehicle.
What car insurance is required in my state?
Each state has different requirements when it comes to car insurance. Many simply require liability insurance (both bodily injury and property harm). Others go a step or two further, requiring add-ons such as individual injury protection and uninsured or underinsured motorist coverage. Visit the table below and locate your state to find your state’s requirements.
According to the Insurance Information Institute, here are the kinds of insurance each state requires as of September 2015, as well as the minimum required amounts of liability insurance. The only state that does not require liability insurance is Fresh Hampshire; however, that state still mandates that you display you have sufficient funds to meet state requirements if you’re at fault in a crash.
Six Tips to Find Cheap Auto Insurance
Certain factors that affect your car insurance rates are largely beyond your control. These include basic demographics such as your age, gender, marital status, location, and job.
But other factors, including what and how you drive, are lighter to switch. So, comparison shop, exploit discounts, and consider bundling policies to find the cheapest car insurance companies, too.
It’s a no-brainer, but it always pays to shop around for cheaper car insurance. Instead of wasting time making endless phone calls or packing out the same information on dozens of websites, save time by using an online quote contraption. Online quote contraptions help you get a quick snapshot of potential rates from several auto-insurance companies at once.
More importantly, getting numerous auto insurance quotes helps you avoid becoming a victim to something called price optimization. Price optimization is the devious practice of of establishing rates based upon how much insurance companies think customers are comfy paying.
Earnix, a pricing analytics platform, found that 45% of larger insurance companies use this tactic to maximize their profits. These insurers mine and analyze a ton of private data, like credit scores and web shopping habits, to determine how likely you are to leave them for another auto insurance company. The bottom line is this: Auto insurance companies are going to charge you based upon how much money they believe they can conveniently squeeze from your pocket, not who you are as a driver.
Getting fresh quotes on the regular is the best way to avoid price optimization because, just like other private data, insurers can see how often you shop around. The more you do it, the less likely they are to risk upping your premium and lose you as a customer.
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Many car insurance companies will give you a discount if you have other policies with them. For example, you may get a break on car insurance if you use the same provider for life, home, or renter’s policies. Bundled policies are convenient, too; you’ll be dealing with only one bill and one company.
A note of caution: Don’t automatically assume bundles will save you money. Companies that suggest only auto insurance may suggest compelling discounts to keep your business. Sometimes that means you get cheaper car insurance if you keep policies with separate insurers.
Your deductible is what you pay out of pocket before your insurance covers the rest of the cost to fix or substitute your car. A plan with a $250 deductible will generally cost more than one with a $1,000 deductible.
For a real-world example, I plugged my mock persona into a quote generator from Progressive, switching only the deductible to see how it would affect my rate. As mentioned earlier, I used a married masculine in his early 30s driving a two thousand eleven Hyundai Sonata. He lives in a petite Southern city, has a clean driving record, and averages 12,000 miles a year.
With a $100 deductible on comprehensive and collision coverage, he would pay toughly $120 a month. Raising that deductible to $250 brought the bill down to about $100 a month. A $500 deductible diminished the monthly bill to $90, and a $1,000 deductible shoved it all the way down to $82. That means he could save $456 a year by choosing the $1,000 deductible instead of the $100 deductible — not a bad sum.
However, raising your deductible is only a good stir if you have cash stashed away to pay the higher deductible in case of a crash or other calamity. Also keep in mind that factors such as your age and driving record will affect how much raising your deductible will actually save you.
Luxury cars are always the most expensive to insure. These cars have the power to go utterly quick, and insurance companies know their drivers are more likely to get into trouble. These cars also cost a lot more to fix and are attractive targets for thieves — all situations your insurance company wants to avoid.
The most expensive two thousand fifteen car to insure, the 600-horsepower Nissan GT-R Nismo, will set you back about $Three,574 a year in car insurance, according to Insure.com. Right behind it are a slew of high-powered or luxury rails including the Mercedes-Benz SL65 AMG Convertible, Dodge SRT Viper, Porsche nine hundred eleven Carrera S Cabriolet, and Audi R8 Five.Two Spyder Quattro, all of which still top $Trio,000 a year.
If you don’t have six figures to drop on a car, here’s some good news: Family-friendly vehicles including minivans, sedans, and smaller SUVs cost the least to insure. Their drivers tend to be more careful, ultimately filing fewer claims. These vehicles are simpler to fix and they aren’t fairly as tempting for thieves.
The cheapest car to insure, the Jeep Wrangler Sport, will set you back only about $1,134 a year in premiums. The Jeep Patriot Sport, Honda CR-V LX, Dodge Journey SXT, and Honda Odyssey EX-L are similarly effortless on the wallet.
Ultimately, the choice is yours, but a less-glamorous rail can help you nab cheap auto insurance.
Switch Your Driving Habits
Insurance is all about risk. If you get a speeding ticket every month, your bill will skyrocket. If you’ve had a clean driving record for years, you will have cheaper car insurance. Unluckily, cleaning up a spotty driving record can take time.
Driving less is the simplest, easiest way to switch your driving habits. Consider your options cautiously: Can you carpool? Work from home? Use mass transit or even stir closer to your job? All of these options can help you save since less time behind the wheel means less chance of a claim. Be sure to tell your insurer about your fresh habits.
It may seem unfair, but the vast majority of car insurance companies look at your credit score to help determine your rate. If you have good credit, your insurer assumes you’ll be more responsible behind the wheel. Bad credit means you’re statistically more likely to file a claim, insurers say.
According to consumer advocacy group United Policyholders, a rock-bottom credit score could mean you’ll pay dual, triple, or even quadruple over someone with a ideal credit score. This controversial practice is illegal in four states: California, Hawaii, Maryland, and Massachusetts. If you don’t live in those states, you’ll want to work on your credit score in your quest for cheap auto insurance.
It’s Time to Save on Car Insurance
A little legwork now can save you big in the long run, so recall to re-evaluate your car insurance at least annually. Your own switching circumstances and old-fashioned competition inbetween insurers always has the potential to hook you a cheap car insurance policy.
Search Affordable Car Insurance Options Near You
Inject your ZIP code below and be sure to click at least 2-3 companies to find the very best rate.
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