Who Has the Cheapest Car Insurance?
If you don't shop around for your car insurance, you could be paying a much higher monthly premium than you need to be..
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What is the cheapest car insurance company?
Our analysis found that USAA and State Farm are the most affordable major insurers in the country. USAA cost an average of $215 for a six-month policy, 55% below the national average. State Farm cost $356 (24% below the national average) for a six-month policy. Although USAA is easily the cheapest option among major insurers, only active military members, veterans or their families will qualify for a policy. Among insurers that have a smaller national footprint, Farm Bureau Insurance, at $218 for a six-month policy, and Erie, at $226, rank as the cheapest. These insurers don't have the same name recognition as some of the companies you may recognize from national television campaigns, but could help you find savings if you're looking for the cheapest rate.
The cheapest insurers by state
The price of car insurance can vary greatly between states. One company may be expensive in Utah but inexpensive in New York. Although State Farm did not rank as our cheapest car insurance company overall, it was the cheapest widely available and accessible insurer, meaning it operates in more than 40 states and there are no eligibility requirements.
USAA was often the cheapest option in any given state, but its eligibility requirements make it restrictive. If you are eligible, you should get a quote with USAA as it is available across the country.
In some states, a small, local company or affiliate could even offer you the best price. For example, the cheapest insurers on average in Georgia, Nebraska, Virginia and Utah are their Farm Bureau affiliates.
Here, we've provided a list of the cheapest insurers in each state — on average — based on our research. Click on your state to see a deeper analysis on the least expensive car insurance in your area.
Finding the cheapest car insurance coverage for you
Broadly speaking, you should take two key steps to find the cheapest car insurance for you.
- Ensure you're shopping for the appropriate level of car insurance coverage.
- Shop for quotes between multiple insurers, including our top recommendations. When shopping, be sure to take advantage of all available discounts.
Taking the first step — knowing how much car insurance you need — is important for finding appropriately cheap car insurance because:
- You don't want to overpay for unnecessary coverage.
- But you do want to purchase enough coverage to fulfill legal requirements and to appropriately cover your risk.
- Finally, you'll have to define your appropriate coverage limits to make fair price comparisons across insurers.
Now that you've determined how much car insurance you need, shop around between insurers and apply all discounts possible
Once you know how much coverage to buy, it's time to compare car insurance companies. Even when you opt for the exact same coverage levels with two different insurers, one company could be much cheaper for you than another based on how it calculates its rates.
It's easier than ever to compare insurance quotes using online quote tools. But you may want to talk to an insurance agent to ensure you get the most accurate quote possible
By talking to an agent, you can see if you qualify for discounts that may not be applied in the online quote tool process. Car insurance discounts are generally broken into four categories:
- Driver safety discount: Cheaper rates for having a safe driver history or taking defensive driving courses.
- Driver status discount: Discounts lifestyle elements that insurers reward with cheaper rates. These can range from incentives — such as a student getting savings for obtaining good grades — to elements you can't control, such as a senior discount for those of a certain age.
- Policy discount: Savings offered for buying more products or coverage from a particular insurer. The most common discount of this type is a home and auto bundle, in which you get big savings from buying home and auto insurance with the same company.
- Vehicle discount: If features of your vehicle increase its safety, such as anti-theft technology, you may qualify for a discount.
Younger drivers feel more loyal to their insurance providers, yet are least happy with their current service
Despite feeling dissatisfied with their insurance experience, younger drivers feel the most loyalty to their insurers, according to ValuePenguin’s consumer survey. The findings indicate that young drivers may not always be aware of the financial upside of shopping between insurance companies, a fact that could eventually hurt insurance companies should policyholders realize cheaper rates may be available elsewhere.
While Gen Z drivers were found to be the least happy with their insurance provider of any age group, they are also the most loyal age group to their providers: 79% of Gen Z drivers report feeling loyal to their insurance provider, compared to just 66% of Boomers. Despite their loyalty, Gen Z was also the most savings-driven age group: They were the most likely to spend time looking for a deal if they knew they could save $100.
In fact, all age groups looking for cheaper car insurance could benefit from comparing quotes. Seventy percent of drivers would be willing to switch insurance companies if they can save $25 to $200 per year. The difference between our second cheapest insurer in our analysis (State Farm) and our cheapest insurer (Erie) is over $200 annually, showing how even switching between two comparably affordable insurers can result in big savings.