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Shopping For Car Insurance

Learn how to shop for car insurance and find the best rates.

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09/20/2023 02:41 PM

Compare Car Insurance Rates

Answer a few simple questions to save money on your policy


Shopping for car insurance can be difficult if you don’t know where to start. Each state sets its own laws regarding auto insurance, and quotes can vary from provider to provider. One sure way to know you’re getting the best price when shopping for car insurance is to reach out to companies to compare rates.

Each insurer calculates insurance premiums differently, meaning the cheapest auto insurance provider for you may not be the cheapest option for someone else. This article will explain how to shop for car insurance, when you should consider looking for a new provider, and how to save money on your policy. We’ll also recommend affordable options from the best car insurance companies.

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5 Steps For Shopping For Car Insurance

Shopping for car insurance can be broken down into these five simple steps, which we go into more detail about below:

  1. Gather the necessary information
  2. Determine your coverage needs
  3. Request car insurance quotes
  4. Compare rates
  5. Purchase a policy

1. Gather Information

The first step in shopping for car insurance is to gather the information you’ll need to get a quote. Besides the standard information like your name, address, and date of birth, you should have the following handy:

  • Vehicle information including year, make, model, mileage, and vehicle identification number (VIN)
  • Your driver’s license information
  • Information for any other drivers who will be on the insurance policy
  • Your education and profession
  • Your auto insurance history
  • Your accident history
  • Current coverage information

2. Determine Your Coverage Needs

The next step to shopping for car insurance is deciding the type and amount of insurance coverage you’ll need. Except for Virginia and New Hampshire, all states require drivers to have bodily injury and property damage liability coverage. However, most people purchase more than the minimum coverage required by law to protect themselves financially in case of an accident.

Here’s a breakdown of the standard types of coverage you’ll come across when shopping for car insurance:

Liability Liability coverage incorporates both bodily injury liability (BI) and property damage liability (PD). BI covers other drivers and their passengers in accidents you cause, and PD covers other vehicles in accidents you cause.
Collision Collision coverage covers your vehicle in an accident no matter who is at fault.
Comprehensive Comprehensive coverage protects your vehicle against environmental factors such as floods, fires, and fallen tree branches, as well as things like theft and vandalism.
Personal Injury Protection Personal injury protection (PIP) covers medical expenses, lost wages, and death benefits for you and your passengers, no matter who is at fault.
Medical Payments Medical payments (MedPay) covers medical expenses for both you and your passengers in the event of an accident.
Underinsured/Uninsured Motorist Underinsured/uninsured motorist coverage protects you when you are in an accident with a driver with no insurance or too little insurance.

In addition to standard insurance, you may see add-on coverage options from insurers for things such as:

  • Roadside assistance plans
  • Accident forgiveness
  • Gap insurance
  • Mechanical breakdown insurance
  • Rental car reimbursement

Note that no reputable insurance company will sell you a policy that doesn’t meet your state’s minimum insurance requirements.

3. Request Car Insurance Quotes

You should begin reaching out to car insurance companies for quotes once you have your information ready and know what coverage you want. There are several ways to request a quote when shopping for car insurance, including:

  • Using an online comparison tool: This allows you to compare car insurance quotes from providers in your area. It’s generally a quick process if you have all the necessary information handy.
  • Getting a direct quote online: Most insurance providers allow you to receive instant car insurance quotes online. The only downside is that you will have to visit each provider’s website and input your information multiple times, which can be time-consuming.
  • Receiving a quote by phone: Calling an insurance company to get quotes from providers allows you to get any questions answered and gauge the company’s customer service.
  • Reaching out to a car insurance agent: This can be a good idea if you still have questions about coverage options or need assistance. Local agents can help you find the cheapest coverage for your situation and ensure you get all the discounts you qualify for. An agent may work for one company or work as a broker and connect you with several insurance providers.

4. Compare Rates

Before you begin comparing rates from providers, it’s important to understand how prices are calculated. Providers calculate car insurance rates using a range of factors based on your driver profile and the vehicle being insured.

Here are some common factors that car insurance companies consider when calculating rates:

  • Age: Young drivers typically pay the most for auto insurance. Drivers will see rates begin to decrease after the age of 25.
  • Credit score: If you have a good credit score, you will pay less for coverage. However, some states, including California, Hawaii, Massachusetts, Michigan, and Washington, have banned using credit scores to calculate car insurance rates.
  • Driving history: Drivers without accidents or violations on their driving records typically receive the lowest rates.
  • Gender: In some states, car insurance companies charge men more for car insurance while others charge women more than men. California, Hawaii, Massachusetts, Montana, North Carolina, and Pennsylvania have banned using gender to set car insurance rates.
  • Marital status: Married drivers will typically pay less for car insurance than single drivers.
  • Location: Each state has its own car insurance requirements, so you may pay more depending on the state you live in. Rates can also be influenced by the city you live in, especially if there is a high number of accidents or a high theft rate.
  • Vehicle: If you own an expensive car, you will pay more for car insurance coverage since it costs more to replace and repair.

Cheapest Car Insurance Rates By State

To provide you with a better picture of how location can impact insurance costs, our experts have compiled the cheapest car insurance estimates by state for a full coverage policy. The table below shows average annual cost estimates for a 35-year-old driver with a clean driving record and good credit history.

State Cheapest Provider Average Annual Cost Estimate
Alabama USAA $809
Alaska USAA $893
Arizona Geico $1,099
Arkansas USAA $869
California USAA $1,425
Colorado USAA $1,070
Connecticut Geico $972
Delaware State Farm $1,094
District of Columbia USAA $812
Florida Geico $1,565
Georgia USAA $1,107
Hawaii Geico $851
Idaho USAA $657
Illinois Country Financial $1,044
Indiana USAA $695
Iowa State Farm $740
Kansas USAA $776
Kentucky Geico $922
Louisiana Farm Bureau $1,482
Maine Auto-Owners $535
Maryland USAA $845
Massachusetts Geico $1,589
Michigan Progressive $1,682
Minnesota USAA $942
Mississippi USAA $825
Missouri USAA $719
Montana USAA $813
Nebraska Nationwide $929
Nevada USAA $1,357
New Hampshire Auto-Owners $602
New Jersey Progressive $1,326
New Mexico USAA $874
New York Progressive $1,310
North Carolina Erie Insurance $927
North Dakota USAA $671
Ohio USAA $662
Oklahoma USAA $893
Oregon State Farm $961
Pennsylvania Geico $1,135
Rhode Island USAA $1,057
South Carolina USAA $1,016
South Dakota Nationwide $968
Tennessee USAA $755
Texas Texas Farm Bureau $1,010
Utah USAA $872
Vermont USAA $782
Virginia USAA $782
Washington USAA $760
West Virginia USAA $903
Wisconsin USAA $602
Wyoming American National $809

5. Purchase A Policy

Once you’ve decided on an insurance provider, all that’s left to do is purchase your car insurance policy. You can buy insurance online or by calling your local agent, and you’ll receive your insurance card in the mail after you make your initial payment.

How Much Does Car Insurance Cost?

According to our rate estimates, good drivers pay an average of $1,732 per year (or $144 per month) for full coverage car insurance. What you pay can vary greatly depending on a variety of factors. Below, we’ve ranked car insurance companies by cost for different types of drivers.

Cheapest Car Insurance Estimates For Good Drivers

Car Insurance CompanyAnnual Rate Estimate
State Farm$1,339

Cheapest Car Insurance Estimates For Young Drivers

Car Insurance CompanyAnnual Rate Estimate
State Farm$1,765

Cheapest Car Insurance Estimates For Poor Credit

Car Insurance CompanyAnnual Rate Estimate
State Farm$3,616

Cheapest Car Insurance Estimates For Having An At Fault Accident

Car Insurance CompanyAnnual Rate Estimate
State Farm$1,671

How Often Should You Shop For Car Insurance?

You can shop around for car insurance any time you want. However, we recommend reaching out to companies for car insurance quotes each time your policy is up for renewal or if you experience a significant life event.

Significant life events will typically impact your insurance rate. You should shop for car insurance if any of the following events occur:

  • You move to a new location
  • You get married or divorced
  • You raise your credit score
  • You combine policies with other family members
  • Three years have passed since your last traffic violation or at-fault accident

There’s never any obligation to switch insurance providers. Your current insurer may still be the best option for you, but shopping around helps guarantee you are getting the cheapest coverage possible.

We surveyed 1,000 car insurance customers on their experiences. About 27 percent of respondents said they shop for car insurance every six months, while 25 percent said they shop once a year. Another 28 percent said they shop less frequently than once a year.

Tips For Getting The Best Auto Insurance Rates

While you can’t control every factor that affects your car insurance rates, there are a few ways to get a better price as you shop for car insurance.

  • Shop around for coverage: You should get as many car insurance quotes from companies as possible when you shop around for coverage. This will allow you to compare options and get a realistic idea of what you should be paying for coverage.
  • Improve your driving: Auto insurance companies take your driving record into account when determining your insurance rate. You are likely to be offered a lower rate if you prove you are a responsible driver and have little to no at-fault claims or speeding tickets.
  • Build your credit score up: Most states, excluding California, Hawaii, Massachusetts, Michigan, and Washington, factor your credit score in when offering you an insurance rate. If you have a good credit score, you will likely receive a cheaper rate.
  • Increase your deductible: To lower the cost of car insurance, choose an insurance policy with a higher deductible. However, make sure you can afford the deductible before signing on the dotted line.
  • Look for car insurance discounts: All the best car insurance companies offer discounts. You can typically save money by insuring multiple vehicles on the same plan or bundling your auto insurance and homeowners or renters policies with most providers. You may also qualify for savings if you are a new driver, complete a defensive driving course, have a student on your plan, or have a clean driving record.

Our Recommendations For Car Insurance

When you’re ready to shop for car insurance, the best way to find the right coverage and price for your situation is to request auto insurance quotes from companies. To help you get started, we recommend reaching out to Geico and USAA for quotes.

Geico: Best Overall Provider

As the second-largest auto insurer in the U.S., Geico offers affordable pricing and a wide range of coverage options for drivers. The company provides six types of standard insurance as well as mechanical breakdown insurance, rental reimbursement, and emergency road service.

Our cost estimate research shows that the average 35-year-old driver pays $1,352 per year for full coverage car insurance with Geico, which is far below the national average of $1,732. Geico offers low average costs for teen drivers and those with poor credit, but it may not offer the best rates for drivers with a DUI.

The insurer ranked high in overall customer satisfaction in the J.D. Power 2021 U.S. Insurance Shopping Study℠. Geico also received an A++ financial strength rating from AM Best, highlighting its financial stability and ability to pay out claims to drivers on time.

You can learn more about the provider in our Geico insurance review.

USAA: Best For Military Members

USAA car insurance coverage is only available to military members, veterans, and their families. The organization offers some of the lowest auto insurance premiums in the industry and provides a great customer experience.

The insurer offers standard car insurance in addition to roadside assistance and rental reimbursement coverage. USAA also provides a wide range of discount opportunities that help drive the cost of auto insurance policies down even further.

USAA has an A++ rating from AM Best, which highlights the insurer’s financial stability. While the company does not meet the criteria to rank in J.D. Power studies, it consistently scores high in overall customer satisfaction across the U.S.

You can read more about the insurance company in our USAA insurance review.

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Frequently Asked Questions

What factors determine the cost of auto insurance?

Your car insurance rate will be influenced by factors including the vehicle you drive, where you live, and your driving record, age, gender, marital status, and credit score.

Is it cheaper to have business car insurance than personal car insurance?

It is usually more expensive to have business car insurance than personal car insurance. However, you will need business car insurance if a business entity owns the car or if you are a sole proprietor and use your car primarily for business.

Is Insurify any good?

Insurify is a highly-rated car insurance comparison website. You can compare coverage from dozens of companies on the site to find the cheapest car insurance for your situation.

Who has the best car insurance app?

Allstate, Geico, and State Farm all have apps that are rated 4.8 or above by hundreds of thousands of users on the App Store. You can view your insurance ID card, get in touch with an agent, start a claim, or summon roadside assistance with any of these apps.

How much auto insurance do I need?

Car insurance coverage is required in every state except New Hampshire and Virginia. The minimum amount of coverage required varies by state, but most states require that drivers purchase liability coverage at a minimum.

What auto insurance company offers the cheapest rates?

According to our experts’ research, USAA tends to offer the cheapest auto insurance rates. The average 35-year-old married driver pays $1,013 per year for comprehensive coverage.

How We Rate Insurers

Our review process aims to deliver consistent and unbiased assessments of car insurance providers. While there are multiple qualities that make a car insurance company successful, our review team focuses on those we believe are the most important for consumers:

  • Cost: Cost can be difficult to compare between insurers because so many factors impact annual premiums. The cheapest insurer for one driver may not be the cheapest for another. To determine our cost score, we look at insurance rate estimates generated by Quadrant Information Services, discount opportunities, and consumer reports.
  • Coverage: To determine our coverage score, we look at the number of coverage options available as well as coverage limits and deductible options. Our ratings also take into account additional services and benefits like roadside assistance.
  • Reliability: It’s important that an auto insurer is able to meet its claims obligations. Companies with a strong financial strength rating from AM Best score best in this category. Established insurers with a long history of reliable service also receive positive marks.
  • Service: We comb through customer reviews on sites like the Better Business Bureau (BBB) to learn about customer experiences. Insurers with a low volume of complaints score well in this area. We also consider the claims process, giving higher ratings to car insurance providers that offer easy-to-use claims apps.

 *Data accurate at time of publication.