Cheapest car insurance companies of 2021
Fact-checked with HomeInsurance.com
The average American driver pays $1,555 per year for full coverage car insurance. That rate reflects a good credit score and a spotless driving record. However, car insurance rates can increase significantly after an accident, or even a speeding ticket. To help you find a competitive car insurance rate, we put together a guide of the cheapest car insurance companies.
- Cheapest car insurance company overall: Erie
- Cheapest car insurance company for those with poor credit: GEICO
- Cheapest car insurance company after a speeding ticket: American Family
- Cheapest car insurance company after an accident: Travelers
Erie: Cheapest car insurance company overall
Besides your state, one of the most significant factors that impacts your car insurance rate is your driving record. If you’ve never been involved in an accident or received a speeding ticket, you’re automatically set up for a lower rate. The three providers and rates in the following table represent the lowest averages for good drivers.
Cheapest car insurance for full coverage
|Company||Average annual full coverage rate for good drivers|
Erie offers the cheapest rates for full coverage insurance — just $1,141 per year, on average. American Family and GEICO also offer cheap rates if you’re looking for the full lineup of collision, comprehensive, liability and uninsured/underinsured motorist coverage.
Cheapest car insurance for minimum coverage
|Company||Average annual minimum coverage rate for good drivers|
Looking at minimum coverage insurance, Erie once again took the top spot for cheapest rates. However, Auto-Owners was a close second, with an average rate of $398 — just $26 more than Erie. GEICO’s minimum coverage policies cost $416 on average, which is still a very reasonable price.
American Family: Cheapest car insurance company for drivers with a speeding ticket
|Company||Average annual rate with a speeding ticket||% increase|
Of all the providers, American family sees the least increase to average rates with one speeding ticket on your record (although Erie offers the lowest overall rates for all factors among providers). The next cheapest company was Amica at $546 per year on average, followed by GEICO. Amica is a standout choice if you’re looking for top-tier customer satisfaction.
Travelers: Cheapest car insurance company for drivers after an accident
|Company||Average annual rate with an accident||% Increase|
Of all providers, rates with Travelers increase the least amount if you have one accident on record. Erie’s average rate for a driver with one accident is just $486 per year—which is pretty cheap considering accidents have a significant impact on insurance premiums. Auto-Owners and AAA are also affordable carriers if you’ve had one accident.
GEICO: Cheapest car insurance company for drivers with a poor credit history
Your credit score is another important factor that most insurance companies look at when calculating your car insurance rate. Drivers with good credit are typically given a lower rate, and drivers with poor credit usually see a much higher rate. For the purposes of this analysis, a poor credit score is considered anything under 579.
|Company||Average annual rate with poor credit|
GEICO was the cheapest car insurance provider for drivers with a poor credit score. For minimum coverage insurance, drivers with bad credit only pay about $221 more than drivers with good credit. Erie was the second runner up, followed by Nationwide and Amica, which were tied at $733 for drivers with poor credit. Credit is evaluated very differently by provider, so the actual rate increases by percentage can vary significantly.
How to get cheap car insurance quotes
Finding cheap car insurance is very possible, even if you have a lower credit score or a history of accidents. However, it does take careful consideration and research. Here’s a look at how to find the cheapest car insurance quotes.
Every driver who is looking for cheap car insurance should be shopping around and comparing quotes from multiple companies. It’s unlikely that the first company you come across will offer the best rate. Get quotes from a few different providers for the type and amount of coverage you need, and compare them to determine if you’re getting the lowest rate for your needs.
Look for discounts
Almost every car insurance company offers discounts that can help lower your rate. The specific discounts vary by company, but some of the common ones include bundling your policies, taking a defensive driving course, being claims-free, being a good student and having common safety features installed in your car.
Raise your deductible
Another way to lower your car insurance rate is to choose a higher deductible. A deductible is the amount of money you have to pay out-of-pocket towards a covered loss before the insurance company will reimburse you. Raising your deductible will lower your monthly rate, but it may not make a significant difference. Plus, you still need to be able to afford the higher deductible up-front in the event of a claim.
Pay in full
If you can afford to pay your annual premium in full, this is a great way to save extra money. Most insurance companies will lower your yearly premium if you can pay in one lump sum, rather than in monthly installments. While you’re shopping for insurance, check for companies that offer this discount, and what the average savings could be.
Other ways to save money on car insurance
Ultimately, your driving habits can help you or hurt you when it comes to car insurance costs. Safe drivers get a lower rate because they pose less risk to their insurance company. Consider taking a driver safety or defensive driving course to reduce the likelihood that you’ll file a claim. Most insurance companies offer a separate discount for taking an approved course. You can also sign up for a driver safety program, like Progressive’s Snapshot or State Farm’s Drive Safe & Save.
If you live in an area with a high risk of severe weather or a high rate of car theft, consider keeping your car in a garage to avoid damage or theft. Parking your car on the street or exposed in your driveway means there’s a higher likelihood of sustaining damage. It’s also much easier for someone to break in, which would result in a theft claim. These types of claims would be covered by insurance if you have comprehensive coverage, but it would also increase your premium for the few years following.
Coverage Utilizes Quadrant Information Services to analyze quoted rates from thousands of zip codes across all 50 states, using the top 15 carriers by premiums written by state. Quoted rates are based around the profiles of a 30 year male and female with a clean driving record, good credit and the following full coverage details:
- $100k bodily injury liability per person
- $300k bodily injury liability coverage per crash
- $100k property damage liability coverage per crash
- $500 collision coverage deductible
- $500 comprehensive coverage deductible
Minimum coverages were applied to match state requirements. Both drivers used a new, financed 2018 Toyota Camry, commuting 5 days a week and driving 12,000 miles per year.
Minimum coverage rates were utilized to determine average rates after an at-fault accident, with one speeding ticket and for drivers with poor credit.
An accident was defined as an at-fault accident with $3k in property damage. A speeding incident was defined as speeding 16-20 MPH over the limit. Poor credit is defined as scores between 524-577, and good credit is defined as scores between 769-794.
These rates were publicly sourced from insurer filings and should be used for comparative purposes only – your own quotes may be different.