We’ve taken guesswork out of finding the best car insurance companies by analyzing important factors that will affect your customer experience.
We evaluated large auto insurance companies based on average rates for a variety of drivers, coverage features available, levels of complaints, grades for collision claims from auto body repair professionals and how understandable the insurers’ websites are. See our top picks below.
Why Do People Shop for New Car Insurance?
Shopping around for car insurance can result in savings, but many car owners renew their policies each year without checking prices from other insurance companies.
A March 2022 Forbes Advisor survey of 2,000 drivers asked what would motivate them to shop for a new car insurance policy. More than half said any of these three reasons would get them to shop around:
- A bad experience with a car insurance claim (55%)
- Looking for a better price (54%)
- Current company doesn’t have the coverage types I want (52%)
Older drivers (ages 58 to 76) chose price as the No. 1 reason to shop around, while bad claims experiences and coverage types were tops for younger drivers (ages 18 to 25).
Factors That Impact the Cost of Car Insurance
Your car insurance cost will vary depending on several factors that typically include:
- Your driving record
- Your age and years of driving experience
- Where you live
- Car insurance coverage selections
- Deductible amount (if you buy collision and comprehensive coverage)
- Vehicle model
- Your car insurance history, such as whether you’ve had continuous coverage or lapses
- Your credit-based insurance score (use of credit in calculating car insurance costs is banned in California, Hawaii, Massachusetts and Michigan)
How Can I Find the Best Price on Car Insurance?
Once you decide how much car insurance you need, it’s time to start shopping for a policy. Rates often vary widely among companies for the exact same coverage, so it’s smart to compare car insurance quotes from multiple insurers. For example, in California, rates for a good driver range from $1,668 (Wawanesa) to $3,940 (The Hartford)—a range of about $2,270 for the exact same driver.
Here’s what you should do to find the cheapest car insurance.
1. Shop around
If you don’t shop around, you won’t know if your rates are on the high end or the cheapest. Getting multiple quotes will help you find the most affordable car insurance company. You can find free quotes online or by working with an auto insurance agent. Independent insurance agents can provide quotes from multiple companies. Insurance quotes are always free.
2. Ask about discounts
Ask about car insurance discounts when you’re getting car insurance quotes. You can typically knock down your car insurance costs with discounts for:
- By “bundling” multiple insurance policies from the same company, such as auto and home insurance.
- Insuring more than one vehicle with the same company.
- Qualifying for a good driver discount.
- If you have a student on the policy, getting a discount if they’re a good student.
- If you have a college student on the policy, snagging a discount if they’re away at school without a car (usually must be at least 100 miles away).
- Taking a defensive driving class if you are age 55 or older.
- Paying your car insurance bill in full for the term rather than monthly.
3. Choose a higher deductible
Collision and comprehensive coverage have a deductible. The deductible is the amount of money a car insurance company deducts from an insurance claims check.
The higher your deductible, the less you’ll pay for insurance.
Here’s an example. Let’s say you get into an accident and your car suffers $2,000 worth of damage. If your collision deductible is $500, the insurer will deduct that from the settlement amount, so you’d get a $1,500 check to cover the repairs.
If you decide on a high deductible, try to set aside money for that deductible, so you have it available if you need to file a claim later.
4. Ask about pay-per-mile policy if you don’t drive much
If you own a car but take public transportation to work and don’t drive your vehicle much, check out pay-per-mile auto insurance policies.
These policies charge a monthly base rate and also a per-mile rate. They can be a more affordable option if you don’t spend much time behind the wheel.
Let’s say your pay-per-mile insurance has a base rate of $40 a month and a 5-cent per mile rate. If you drive 500 miles in a month, your monthly bill would be $65 ($40 plus 500 miles times $.05).
5. Ask about usage-based car insurance
Usage-based insurance (UBI), also called telematics, may sound like pay-per-mile, but it’s quite different. With a usage-based insurance policy, the car insurance company tracks your driving closely and creates a driving score.
For instance, a usage-based insurance program might track your speed, braking, acceleration, miles driven and time of day. The program will use a smartphone app or a device attached to the vehicle to track your driving.
These programs often come with an initial discount and then you may save more based on your driving. But not all drivers with UBI can save money. These programs are best suited for excellent drivers.
How Much Does Car Insurance Cost?
Car insurance shoppers often put the most importance on price. Here are average annual and monthly costs for good drivers.
|Company||Average annual car insurance cost for good drivers||Average monthly car insurance cost for good drivers|
Car Insurance Cost by Driving Profile
Here’s a look at car insurance rates based on averages nationwide among the largest insurance companies.
|Type of driver||Average annual car insurance cost|
|Driver who caused an accident with property damage||$2,272|
|Driver who caused an accident with an injury||$2,304|
|Driver with one DUI||$2,623|
|Driver with one speeding ticket||$1,947|
|Driver with poor credit||$2,876|
|Driver caught without insurance||$1,822|
|Rates are based on a female driver, age 30, insuring a Toyota RAV4 with liability coverage of 100/300/100 and collision and comprehensive insurance. Averages are based on rates from 11 large auto insurance companies.|
What Types of Car Insurance Are Required?
Here are types of car insurance that are generally required by states.
Liability insurance: Required in most states. Car liability insurance pays for injuries and property damage you cause to others. A good rule of thumb is to buy enough liability insurance to cover what can be taken from you in a lawsuit.
Uninsured motorist coverage (UM): Mandatory in some states and optional in others. Uninsured motorist insurance pays for you and your passengers’ medical bills and other expenses if someone crashes into you and they don’t have any liability insurance. A related coverage, underinsured motorist coverage, helps with you and your passengers’ medical bills when a driver with insufficient coverage causes an accident resulting in injuries.
Collision and comprehensive insurance: Required if you have a car loan or lease. These are two separate coverage types often sold together. Collision and comprehensive insurance pay for your vehicle repair bills due to problems such as car accidents, car theft, fires, floods, severe weather, falling objects, vandalism and collisions with animals.
Personal injury protection: Required in some states. Some states use a no-fault car insurance system. In these states you’ll make smaller injury claims on your own auto insurance no matter who was to blame. These claims fall under personal injury protection, which is required in no-fault states and available in some others.
Other Types of Auto Insurance to Consider
Sometimes getting the best car insurance means adding extra coverage in order to get more protection or guard against unexpected out-of-pocket expenses. Here are some other auto insurance types to consider.
Accident forgiveness. Raising your car insurance rates after you cause an accident is standard operating procedure for car insurance companies. If you get “accident forgiveness” coverage from your insurer, you can escape a rate increase after your first at-fault accident. Some insurers go a step further and also “forgive” a moving violation, such as a speeding ticket.
Gap insurance. Do you have a large car loan balance or lease? If your car is totaled, the insurance payout for the vehicle could be much less than your balance. Gap insurance pays the difference.
New car replacement. If you’re the unlikely driver who totals your new car, this coverage can help. It will pay to replace your car with a similar new car, rather than compensating you only for the depreciated value of your car. New car replacement coverage rules can vary among insurers for what qualifies as a “new” car so check the details.
Pay-per-mile insurance. If you drive very little, pay-per-mile auto insurance could be a good bet for you. Part of your premium hinges on exactly how many miles you drive each month. The other part, called the base rate, doesn’t change from month to month.
SR-22 insurance. An SR-22 is definitely not something you want, but you may need an insurer that provides it. Your state could require you to obtain an SR-22 form to prove that you have auto insurance. Your insurance company needs to send this form to the state to verify you have coverage, but not all insurers perform this service. You might end up with an SR-22 requirement if, for example, you rack up a lot of moving violations or you cause an accident while driving uninsured.
Usage-based insurance. This type of policy has the potential to reduce your car insurance bill if you’re a really good driver. This typically means no speeding, hard braking, hard cornering and other factors. Usage-based insurance (UBI) programs use either an app or a device that plugs into your car to track your driving habits.
But don’t count on savings from usage-based insurance. Less than half (48%) of drivers who opt into a usage-based insurance program actually see savings, according to TransUnion’s 2022 Insurance Trends and Outlook Report. Premiums stayed the same for 30% of drivers using UBI.
Vanishing deductibles. If you have a collision or comprehensive insurance claim, your insurance check will be reduced by your deductible. Some auto insurers take the sting out of deductibles by offering a vanishing deductible. Generally this means a set reduction (such as $100) for every year you don’t make a claim.
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