Car insurance is a necessity, but it can be expensive. Thankfully, there are ways to save money on premiums.
GEICO offers the lowest average premium for all age groups. However, it’s hard to find affordable full coverage car insurance. So, we rounded up the cheapest regional providers that offer full coverage in every state.
1. Pay-as-you-go
Pay-as-you-go car insurance is a type of usage-based coverage that calculates your premium based on how much you drive each month. Typically, you will install a device in your vehicle or use a mobile app to track driving habits and record distances traveled. This data is used to determine your risk profile and reward you for safe driving habits, which in turn leads to a lower rate.
For example, Travelers’ IntelliDrive program uses a mobile app to monitor your driving behavior and rewards you for good driving habits by giving you up to 20 percent in savings on your car insurance. Other insurers also offer similar programs, including Allstate’s Drive Safe & Save and State Farm’s SmartDrive. These programs are a good option for people who don’t drive very often, such as students and seasonal workers.
Another variation on this type of policy is called pay-per-mile. These policies are a bit more expensive, but they may be cheaper than traditional car insurance if you don’t drive very much. For instance, some major insurers such as Metromile offer pay-per-mile coverage that costs less than a traditional policy if you drive fewer than 10,000 miles each year.
This kind of car insurance can help reduce traffic congestion, road and parking facility costs, crashes, uninsured driving, and environmental impacts. In addition, it can make vehicles more affordable for low-income households. Moreover, it makes it more cost-effective for households to purchase an extra vehicle that might not be driven very often, such as a second car for errands or a recreational vehicle.
The best part about pay-as-you-go coverage is that it can be customized to fit your specific needs and budget. For instance, some companies allow you to switch on and off your own damage (OD) cover on a daily basis – for example, if you drive during the day but not at night, you can choose to keep your OD cover switched off.
In the future, we may see even more ways to customize a car insurance policy to fit your needs. For instance, some insurers are exploring the idea of letting drivers choose a certain type of vehicle in exchange for a discount on their premium. Others might allow you to select a higher or lower level of collision and comprehensive coverage.
2. Liability-only
If you’re a safe driver with a clean driving record, a low credit score and no history of accidents or traffic violations, you may qualify for cheap liability-only car insurance. In fact, some insurers even offer rates that are lower than the national average. The best cheap liability-only car insurance depends on your specific driving needs, so you should compare quotes from several providers to find the best deal. Other important factors to consider include company customer satisfaction ratings, financial strength ratings, coverage options and discounts.
In general, insurance companies look at the following when determining premiums:
Age: Young drivers tend to have higher rates, as they’re inexperienced and less likely to be careful behind the wheel. In addition, older drivers are more likely to experience health-related issues that can affect their reaction times. Driving history: traffic tickets, accidents, DUIs and more can significantly raise rates. Credit score: A low credit score can also make it more difficult to find affordable car insurance. However, some states have laws that prohibit using credit scores to determine premiums.
Vehicle: The type and model of your vehicle can influence how much you’ll pay for liability-only car insurance. For example, smaller cars like the Honda Civic and Volkswagen Beetle are cheaper to insure than larger vehicles such as the Mercedes-Benz CLA and BMW 3 Series. Vehicle safety features can also help reduce your costs, such as anti-lock brakes and daytime running lights.
There are several companies that offer some of the cheapest liability-only car insurance, including Auto-Owners, USAA, GEICO, Travelers and State Farm. All of these companies have minimum coverage rates below the national average. Other companies with reasonable rates include Nationwide, Progressive and American Family. However, keep in mind that not all of these insurance providers are available nationwide. For example, GEICO is only available in certain states and Country Financial only offers low study rates in 19 states. Lastly, USAA only covers current and former members of the military and their families. The bottom line is that it’s worth paying a little more for a comprehensive policy if you can afford it.
3. Comprehensive
A comprehensive car insurance policy protects your vehicle against damage from weather, accidents, and other incidents, such as hitting a deer. While a comprehensive policy adds to the total cost of your auto insurance, it can be worth it if you want the peace of mind that comes with knowing you’ll likely be covered for major issues that arise. It’s also a must if you lease or finance your car, as car dealerships and banks will often require it as a condition of the loan or lease.
Comprehensive car insurance is typically cheapest if you have good credit and purchase the coverage with a low deductible. However, because different companies set their rates based on specific driver profiles, the company with the cheapest premiums overall may not be the best choice for you. For example, GEICO offers the lowest rates on average, but Auto-Owners and USAA offer lower premiums in certain states.
When it comes to finding the cheapest car insurance, there are many things that can affect your rates, including age, driving record, and credit score. You can also try to slash your rate by purchasing a safer, less expensive car, checking for available discounts, and even opting for a usage-based plan from companies like Metromile.
However, the most important factor is your driving record. Getting tickets or wrecks on your record can significantly raise your car insurance rates. The good news is that most drivers can lower their rates by proving they are safe drivers and taking defensive driving classes.
We analyzed average car insurance rates from national providers and determined the five cheapest large insurers for liability-only and full-coverage policies in all 50 states. Our list includes the cheapest companies for each type of coverage and takes into account driving records, policy options, customer service, and financial strength. Keep in mind that a company’s cheap rates can change at any time, so it’s important to shop around and get quotes regularly. You can do this by using a tool like Bankrate’s auto insurance comparison calculator.
4. Collision
When it comes to collision car insurance, you can find a variety of options at different prices. The cheapest premiums are usually available to drivers over the age of 25, with clean driving records and high credit scores. Drivers who live in cities with lower theft and accident rates may also see cheaper rates. State insurance regulations, including which coverage is required, can also impact rates. Policy discounts, such as those for safe-driving features and paperless billing, can also reduce rates.
The value of your vehicle and the size of your deductible will influence the cost of your collision coverage. Collision insurance is typically pricier for vehicles that are worth a lot or that have high repair costs. Vehicles that are commonly stolen, such as luxury cars, will also be more expensive to insure.
Aside from collision coverage, other factors that can affect your premium include your driving history and the type of car you drive. Some states have laws that require you to carry specific minimum liability coverage amounts. NerdWallet’s analysis of car insurance providers found that State Farm and Geico offer the cheapest rates for minimum coverage, though availability can vary by state.
Depending on your situation, it might be worthwhile to add collision and comprehensive coverage to your policy. It can help cover the cost of repairs or replacements for your car after an accident, and it can also reimburse you if your vehicle is declared a total loss. In that case, you can use the payout to buy a new vehicle or pay off your auto loan.
Generally, the most affordable car insurance is minimum liability coverage with a large deductible. You can get these rates from national insurers such as State Farm, Geico and Travelers or from regional providers like Erie and Clearcover. Drivers under the age of 25 will typically pay more for car insurance, but rates begin to decrease as you gain experience and a clean driving record. Other factors that can affect your car insurance rates are the vehicle model, your driving history and the available discounts.
