Auto Insurance May Sometimes Seem Like An Unwelcome Expense But Its Purpose Is A Good One It Can Shield You From Financial Loss Due To Injuries Or Property Damage Related To A Traffic Accident Auto Theft Natural Disaster Or Some Other Event
But you shouldnt have to break the bank to get dependable coverage. There are many auto insurance companies out there you just need to take time to look for coverage thats right for you, compare quotes and take advantage of whatever discounts might be available.
Here are seven ways to help find cheap car insurance that meets your needs.
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 youre 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, doesnt change from month to month.
How Do Car Insurance Companies Pay Out Claims
In case of an accident, you can file a claim with your insurance company by calling the claims department. Major insurance companies have mobile apps that allow you to file a claim quickly and upload all the necessary documents in one place.
Car insurance companies pay out claims after investigating and reviewing all related documents. Be sure to consult your policy for any limitations regarding your coverage.
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Should You Get The Cheapest Car Insurance
We dont recommend it. While its tempting to search for the absolute cheapest car insurance you can find, its often not a good idea for most drivers.
The cheapest insurance you can get is a policy that only includes the minimum amount of liability required in your state . It doesnt include comprehensive or collision coverage.
Minimum coverage costs more than $1,000 less per year than full-coverage, but getting just the minimum amount of coverage required by your state means that if youre at fault in an accident and the damage you cause is more than your liability limits, youll be on the hook for the rest yourself.
That could mean owing tens of thousands of dollars to an injured driver or having to pay out of pocket for their totaled car.
Not having full-coverage also means damage to your own car isnt covered by your policy, so if you crash into a telephone pole or a tree branch falls on the hood of your car, youll have to foot the bill.
Is shopping for car insurance all about price?
“Shopping for insurance is not all about price, but price is useful as a significant, concrete factor thats also easy to understand. Claims handling and scope of coverage are also both important.” – Peter Kochenberger, Executive Director of the Insurance LLM Program and Deputy Director of the Insurance Law Center at UConn
How Does Telematics Work
Telematics or black box insurance uses technology to monitor the way you drive and transmits the data to your insurance provider. If you drive safely, it could lead to cheaper car insurance.
Telematics works either through a GPS device a black box fitted in your car or a smartphone app. It records how you corner, brake, your speed, the time of day and how far you drive, for example.
Black box insurance provides evidence that youre a safe driver and could reduce your premiums, making it particularly useful for young and inexperienced drivers. But older drivers with low mileage may also find it can help save them money.
Cheapest Car Insurance By Age
Age plays a key role in determining car insurance rates. In the sections below, we highlight the cheapest car insurance rates for young drivers and seniors.
Cheap First-Time Car Insurance
Below, we highlight the cheapest car insurance rates for young drivers, broken down by age.
Cheapest Car Insurance for 16-Year-Olds
Sixteen-year-olds pay around $6,912 for individual full-coverage policies on average. Erie, Auto-Owners and State Farm offer the cheapest full-coveragecar insurance for 16-year-olds:
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Read more:Car Insurance for Teens
Cheapest Car Insurance for 18-Year-Olds
Our estimates show that 18-year-olds pay about $4,958 per year for insurance on average. The cheapest full-coverage car insurance rates for 18-year-olds are offered by Erie, Auto-Owners and Geico:
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Read more: Car Insurance For 18-Year-Olds
Cheapest Car Insurance for 21-Year-Olds
Full-coverage car insurance rates for 21-year-olds decline to $2,786 per year on average. The cheapest car insurance rates for 21-year olds are offered by Geico, Auto-Owners and Erie:
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Read more: Car Insurance for 21-Year-Olds
Cheapest Car Insurance for 25-Year-Olds
Our estimates show that full-coverage car insurance costs about $2,019 per year on average for 25-year-olds, which is only slightly more than middle-aged drivers. However, Geico and Erie offer the cheapest auto insurance rates for 25-year-old drivers:
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Cheapest Car Insurance for Seniors
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How To Compare Affordable Car Insurance Companies
There are several factors to consider when comparing affordable car insurance companies.
- Coverage: Insurance companies can vary in the coverage they offer. While some stick to just the traditional forms like collision and comprehensive insurance, others may go the extra mile with additional options like gap insurance and rideshare insurance.
- Cost: Budget can be a determining factor when determining which car insurance company is best for your needs. Weve picked the most affordable providers for our list.
- Discounts: Many insurance companies offer a variety of discounts that can help you save money, such as savings for setting up autopay, being a safe driver, or being a college student.
- Quotes: Certain companies make it quick and easy to get a quote online others are not so convenient.
- Claim submittal: If you get in an accident, how easy is it to submit a claim? Can you submit it online, or do you need to call?
- Policy management: Some companies have better online interfaces than others, or allow you to speak with a local agent to discuss your policy and claims. Some even have mobile apps.
- Ratings: From AM Best for financial stability to J.D. Power for customer service, industry ratings can help you determine what to expect from an insurance company.
Do I Need Full Coverage Car Insurance
If you leased or financed the purchase of your vehicle, your lender will probably require that you buy a full coverage policy. If you fully own your car, you arenât required to buy comprehensive and collision insurance, but we recommend it if you have a valuable vehicle. Those with older vehicles may be best served by dropping the coverages. If youâre paying hundreds of dollars per year â plus the deductible â to cover the risk your car is totaled, youâll want to make sure your car has enough value to justify that expense.
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Related Topics & Resources
Products underwritten by Nationwide Mutual Insurance Company and Affiliated Companies. Not all Nationwide affiliated companies are mutual companies, and not all Nationwide members are insured by a mutual company. Subject to underwriting guidelines, review and approval. Products and discounts not available to all persons in all states. Nationwide Investment Services Corporation, member FINRA. Home Office: One Nationwide Plaza, Columbus, OH. Nationwide, the Nationwide N and Eagle and other marks displayed on this page are service marks of Nationwide Mutual Insurance Company, unless otherwise disclosed. ©. Nationwide Mutual Insurance Company.
What Car Insurance Discounts Should I Look For
Discounts on vehicle safety equipment, such as airbags, are easy to get. Make sure to get a bundling discount by buying from the same company if you need more than one type of insurance policy.
Good driver car insurance discounts are common. If you have a teen or young adult driver, you may be able to get a good student discount. And you may be able to get a small discount for things you would do anyway, like going paperless by receiving insurance bills and policies electronically.
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Full List Of The Best Cheap Auto Insurance Companies
We evaluated the average price, customer service quality, and coverage offerings from top companies to find the best car cheap car insurance.
GEICO is our overall pick for the best and cheapest car insurance, but there are other options that may be the best pick for you. Check out our longer list of the best cheap car insurance companies:
Our picks are a starting place, but theres no guarantee that the cheapest car insurance company for one driver will also be your cheapest option.
Thats because rates vary by everything from your location to your age to your driving history. Before you start looking for coverage, take a look at some of the cheapest companies for drivers in your area or with your profile..
Then, compare quotes from at least a few companies. We estimate that drivers who dont compare before buying what they think is the cheapest insurance can overpay by $279 each month.
Cheapest Car Insurance Company Overall
Progressive is the cheapest major car insurance company for full coverage policies, providing savings of $850 compared to the national average. Progressive is also the cheapest insurance company for liability and state minimum coverage levels.
Geico is the second-cheapest car insurance company overall and has the cheapest rates for drivers who have speeding tickets, accidents or bad credit. Readers should note that Liberty Mutual, one of the biggest auto insurers in the U.S., is not included in the list of cheap car insurance companies because of a lack of public rate information from the company.
Please note: The data in this report is from our analysis of various driver profiles from dozens of major carriers. The rates reported here are averages that give you an idea of coverage costs for different scenarios.
However, exactly what you pay will depend on your own personal circumstances. Car insurance quotes vary based on your age, location, driving record, credit-based insurance score, driving habits and the type of vehicle you drive.
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Cheap Car Insurance With Good Reviews
Ideally, youll find cheap car insurance from a company with good customer service.
Most of the 10 companies in our analysis have complaint levels that are lower than the industry average. Complaint numbers from the National Association of Insurance Commissioners show a companys level of complaint relative to its size of business, with complaint numbers above 1.0 being higher than the industry average.
In Forbes Advisors ratings of the best car insurance companies, Geico, Nationwide, Travelers and USAA came out on top, when weighing rates, coverage options, complaints and collision claims.
Cheap Car Insurance Companies By City
Car insurance rates dont just differ from state to state. They vary sometimes greatly from city to city and even by ZIP code. Thats because your location is an important factor in how insurers calculate rates. But you can find cheap rates in your city by using CarInsurance.coms car insurance ZIP code calculator.
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Best For Cheap Coverage: Geico Auto Insurance
With its infamous GEICO gecko, most people in the United States have at least heard the name GEICO. GEICO has insurance agents, but agents do not actively seek out customers. Instead, potential customers run quotes through its online system and sign up, manage plans, and more with assistance as needed from customer service agents.
Best For Heroes: California Casualty Auto Insurance
The celebration of heroes has never been higher, but not all insurance companies are equipped to offer coverage or competitive rates to teachers, firefighters, nurses, and peace officers. Despite the name, California Casualty offers coverage in most states for the listed professionals at discounted rates.
California Casualty is not currently offering coverage in Alaska, Hawai’i, Massachusetts, Michigan, New York, or Wisconsin. In the states it does cover, California Casualty offers discounted rates on homeowners and auto insurance with additional coverages like reduced deductibles for nurses when the damage occurs within 500 feet of their workplace.
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Best For Military Families: Usaa
- Purchasing Options: Online, phone, agent
- Available Discounts: 12
USAA is a membership-based insurance provider for active-duty and veteran military members and their families. There are several military-specific resources available to help with everything from car buying to auto insurance.
No local agent network
USAA was founded in 1922 and is headquartered in San Antonio, Texas. It provides a full menu of insurance coverage to the military community in all 50 states.
USAA offers the following types of car insurance coverage:
- Rental reimbursement
- Rideshare insurance
In addition to auto insurance, USAA provides other policies including homeowners, life, property, and even health insurance. If you bundle multiple policies with USAA, you can save money with added discounts. Online quotes are available or you can contact an agent for more assistance.
In all, USAA has 12 car insurance discounts. This includes discounts for student drivers, good students, and safe drivers. If your parents are USAA policyholders, you can apply a legacy discount to your premium. There are also military-specific discounts, such as a discount when you store your car on a military base and discounts while on deployment, plus savings for low annual mileage.
Read our full USAA auto insurance review.
If You Have An Older Vehicle Consider Skipping Comprehensive And Collision Coverage
Collision coverage can protect you if youre in a single-car accident or get hit by another car or object. Comprehensive coverage can protect you if your car is stolen or damaged due to noncollision events like theft, natural disaster or contact with an animal. Together, these coverage options are designed to cover repairs or reimburse you for the value of your vehicle.
Comprehensive and collision coverage are optional unless you lease or finance your car, in which case your auto loan lender may require it.
If you have an older car with low value thats paid off, you might be able to get less expensive coverage for comprehensive and collision, or you may be able to opt out of comprehensive and collision coverage altogether whats best for you depends on your specific situation.
To decide if this makes sense for you, take a look at whats called the book value of your car and weigh this against both the comprehensive and collision deductible and the annual cost of this coverage noted in your insurance quote. Kelley Blue Book and Edmunds.com offer tools you can use to help estimate your cars value.
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Choices That Affect Car Insurance Rates
Some decisions a driver makes can influence the cost of their car insurance. Heres a look at a few of those factors:
- Coverage level: Minimum coverage on your vehicle will cost less than full coverage car insurance. However, youll receive very little protection for your car in the event of an accident if you opt for the state minimum coverage limit.
- Deductible amount: Those with high deductibles receive lower rates for auto insurance, but they also pay more out of pocket when damages occur.
- Bundled policies: You could pay a lower price if you put other types of insurance, such as homeowners or renters coverage, under the same policy as your car coverage.
- Annual mileage: Insurance companies typically charge lower rates for policyholders who dont drive as much since spending less time on the road makes them less likely to get into accidents.