The Best Cheapest Car Insurance Companies in U.S. 2020

0
65
cheapest car insurance
cheapest car insurance

One of the best ways to get cheap car insurance is by comparing car insurance quotes — and the companies offering them. But when it comes to auto insurance, you want more than just the cheapest rates. The best cheap car insurance companies provide affordable rates without giving up quality customer service.

TBEN sliced the data in several ways to help you find the best cheap car insurance, depending on what that means for you.

  • The cheapest among the best companies. First, we took our best car insurance companies for 2020 and ranked them by average annual rate.
  • Best cheap car insurance from the largest companies. We looked at the largest companies in the U.S. and compared their average rates and best features. Although the largest insurers aren’t always the cheapest, they’re widely available to drivers across the nation.
  • The cheapest car insurance, period. We looked at prices from dozens of companies across the country to determine who has the cheapest car insurance. We varied policy details to see rates for different credit and driving histories, ages and household sizes.

Cheapest Car Insurance Companies

  1. USAA is the cheapest car insurance company, and it offers the lowest car insurance rates in the country, according to our analysis. This insurer has a low representative rate of just $885 per year, which is nearly $300 less than the next cheapest insurance company in our study. USAA has the lowest study premiums for nearly every driver profile we analyzed, and even when it wasn’t the absolute cheapest, it wasn’t much more expensive than its cheaper rival.
  2. Geico is the second-cheapest car insurance company, with a study rate of $1,168 annually. That’s quite a bit more expensive than USAA’s representative rate, but it’s still around 17% cheaper than the national average in our analysis. Geico offers some of the lowest study rates for nearly every driver profile, except the one with a DUI. This insurance company really stands out from its competitors when we look at our 25-year-old driver profiles. Geico’s representative rates for these profiles are hundreds of dollars cheaper than what nearly every other insurer offers.
  3. State Farm is the third-cheapest car insurance company in our study. With an annual representative rate of $1,234, State Farm is cheaper than the national average. According to our analysis, this insurer is a great option for representative profiles with less-than-stellar driving records. State Farm’s study rates are well below the national average for the profiles with a speeding ticket or an accident. This insurer was the cheapest of all for the profile with a DUI.
  4. Travelers is the fourth-cheapest car insurance company in our ranking of the cheapest insurers. It’s still within striking distance of State Farm and Geico, however, with a representative premium of $1,267 per year. Across the range of our driver profiles, regardless of age, gender, credit score, or driving history, Travelers had study rates that were a bit below average.
  5. Progressive is the fifth-cheapest car insurance company. Its representative rate is still a bit below the average among all the companies, with a study premium of $1,373. The same is true across most of our driver profiles, with Progressive’s rates hovering close to or just below the average. Progressive is a great option for the driver profile with a DUI, with a study rate much lower than average. However, it is among the most expensive for the profile with an accident.
  6. American Family is the sixth-cheapest car insurance company, with a study premium of $1,391. This is the last auto insurance company with a representative rate that is lower than the national average. Like Progressive, American Family stayed right around the average among the nine insurers for most of our driver profiles, but it strayed toward the cheaper end for the profiles with poor driving histories.
  7. Farmers is the seventh-cheapest car insurance company. Its study rate of $1,682 annually is about 20% higher than American Family’s representative premium. It’s also a couple of hundred dollars more expensive than the national average. Farmers’ study rates are consistently on the expensive side for all of our driver profiles (though it is never the most expensive).
  8. Nationwide is the eighth-cheapest car insurance company, and its annual study rate of $1,864 is about $200 more expensive than Farmers’ representative rate, and more than $400 higher than the national average. More damningly: Nationwide is more than twice as expensive as USAA. This car insurance company is particularly expensive for our 25-year-old driver profiles, as well as those with poor driving histories. For the profile with a DUI, Nationwide has a study rate of more than $4,000 per year, or nearly $350 per month.
  9. Allstate is the most expensive car insurance company in our study, though just by a hair. This company’s study rate of $1,880 only costs about $1 more per month than Nationwide’s. Still, Allstate ultimately takes the dubious crown as the most expensive auto insurer in our analysis, with especially high rates for our 35- and 60-year-old driver profiles. Allstate also heavily penalizes driver profiles with fair or poor credit.
ALSO READ  National General Insurance – 2020 Review

It’s important to note that our data may not include all states in which each of these companies operate. Study rates for Allstate, Geico, and State Farm are based on data reported in all 50 states and the District of Columbia, while USAA is based on data from 48 states, Progressive on data from 47 states, Nationwide on data from 43, Farmers on data from 31, Travelers on data from 24, and American Family on data from 19.

The cheapest car insurance rates from the best companies

Looking for a cheap car insurance company that puts customers first? TBEN compared rates among the best car insurance companies in 2020 for those where we have complete pricing data. We looked at average rates in every ZIP code in all 50 states and Washington, D.C. Not all companies offer insurance in every state.

Here are the best car insurance companies according to our 2020 reviews, ranked by average car insurance premium per year.

CompanyAnnual insurance premiumStar rating
Erie$8355.0
Texas Farm Bureau Insurance$1,0415.0
Country Financial$1,1364.0
Amica$1,1835.0
Geico$1,1985.0
American Family$1,2334.5
NJM$1,3015.0
Safeco$1,3174.0
Nationwide$1,3494.0
Auto-Owners$1,3574.5
State Farm$1,5114.5
Travelers$1,5284.5
AAA$1,6104.5
Progressive$1,7664.5
Liberty Mutual$1,7784.0
Shelter$1,8255.0
Allstate$1,8344.5
Farmers$1,8654.5
Esurance$1,9514.5
USAA*$1,0235.0
*USAA is available only to military, veterans and their families.

Erie has the most affordable car insurance rates on average among companies we analyzed, but it’s available in only 12 states and Washington, D.C. Geico has the cheapest rates on average among the nation’s largest insurers.

Cheapest Car Insurance for Good Drivers

The cheapest car insurance company for a driver profile with a clean record is USAA, at just $885 per year. USAA is limited to people with a military affiliation, however, so for driver profiles that don’t qualify, Geico comes in second, with a study rate of $1,168. You may read this and think that these rates sound a lot like the overall average rates mentioned above, and you would be correct. That is because we used good drivers as our baseline profiles to get the average representative rates. This makes it possible to see how the study premiums change as we add a speeding ticket or accident, or give the profile a lower credit score.

Being a safe, experienced driver with no accidents or citations on your record is the best way to get cheap car insurance. Safe drivers are the kinds of clients car insurance companies want to have on their books because safe drivers are unlikely to make a car insurance claim. As a result, they get charged lower rates than drivers with speeding tickets or accidents in their recent past. 

To find these representative rates, we made driving profiles with a clean record. These driving record representative profiles were based on 25-, 35-, and 60-year-old males and females with 12,000 miles per year, a medium level of insurance coverage, and a good credit score. Vehicles used in the analysis are the 2015 Honda Civic, 2015 Toyota RAV4, and 2015 Ford F-150. 

COMPANYCLEAN RECORD
USAA$885
Geico$1,168
State Farm$1,234
Travelers$1,267
Progressive$1,373
American Family$1,391
Farmers$1,682
Nationwide$1,864
Allstate$1,880

What Happens to Car Insurance After a Speeding Ticket?

When you get a speeding ticket, your car insurance rates will probably go up. In our study, we found that a single speeding ticket raised representative premiums by about 22%, from an average of $1,416 with a clean driving record to $1,724 with a speeding ticket.

Cheapest auto insurance rates by driving record

Depending on your driving record, the most affordable car insurance company varies. The table below shows average auto insurance rates for additional driver profiles from the largest companies.

What Happens to Car Insurance After a DUI?

Getting a DUI is just about the worst thing you can do if you want to keep your auto insurance premiums low. Our analysis of representative rates found an increase of 75% for our driver profile with a DUI over the one with a clean record. In absolute terms, the average increase was more than $1,000 per year, or almost $85 per month.

Cheapest Car Insurance for Drivers With a DUI

With a DUI added to our driver profile, State Farm comes in as the cheapest option, at $1,681. USAA isn’t far behind, however, at $1,683. American Family had the smallest increase in study rates for this profile, charging only $335 more (about 24%). 

Nationwide was the most expensive of all, with a representative premium of $4,011 (an increase of $2,147). By percentage, however, Geico had the largest comparative rise in study rates, with an increase of 153% from $1,168 for the profile with a clean record to $2,958 for the one with a DUI.

ALSO READ  Geico vs Progressive Car Insurance: Which Is Better in 2020?

To find the average study rates for a profile with a DUI, we made profiles for males and females in each of the following ages: 25 years, 35 years, and 60 years. The profiles have insurance coverage for 12,000 miles per year, a medium level of insurance coverage, and a good credit score. We used three vehicles for our driver profiles: the 2015 Honda Civic, 2015 Toyota RAV4, and 2015 Ford F-150.

Cheapest Car Insurance For Drivers With DUI

COMPANYPOOR
USAA$1,653
Geico$1,855
Travelers$2,095
American Family$2,277
Progressive$2,308
Nationwide$2,549
Farmers$2,669
State Farm$2,745
Allstate$3,025

Cheapest auto insurance rates for a couple with a teen driver

Adding a teen driver to an auto insurance policy isn’t cheap. To get an idea of how much a policy with a teen costs, TBEN compared insurance rates for a married couple with rates for a married couple with a teen driver.

Geico offers the cheapest rates on average for teen drivers, costing an additional $1,367 a year. While this might seem steep, it’s far better than other insurer rates. For instance, Liberty Mutual tacks on an additional $3,313 on average.

Why the sharp increase? Teenagers are inexperienced, posing a big risk for insurers.

CompanyMarried coupleMarried couple with teen driverAnnual cost difference
Allstate$2,524$4,682$2,158
Farmers$2,853$5,851$2,998
Geico$1,821$3,188$1,367
Liberty Mutual$2,736$6,049$3,313
Progressive$2,270$4,380$2,110
State Farm$2,487$4,540$2,053
USAA*$1,577$2,763$1,185
*USAA is available only to military, veterans and their families.

These sample rates give only an idea of the cheapest car insurance — the lowest rates for you may come from a different company.

The best car insurance from the largest companies

It’s easy to find the cheapest auto insurance quote and think you’ve found the insurer for you. But to find the best cheap insurance, consider factors like a company’s customer complaints, available coverage options and customer satisfaction ratings.

Best cheap car insurance overall: Geico

Geico not only offers the best rates in our analysis for 40-year-old drivers with a clean driving record, but also has the lowest average rates for:

  • Good drivers with poor credit.
  • Drivers with one at-fault accident.
  • Drivers with one speeding ticket.
  • A 50-year-old married couple with a teen driver.

On top of that, the company ranked the best for tech and apps (more on this later) and was the only large insurer to earn a 5-star rating in our 2020 insurance reviews.

But no company is best for every customer. If you’re looking for a lot of add-on coverages, you might want to look elsewhere. Based on our analysis, Geico had few coverage options compared to other large auto insurers. And if you have a DUI on your record, our analysis showed lower rates from Progressive and State Farm, on average.

Cheapest car insurance for a DUI: Progressive

Although Geico has the best average rate for almost every driver profile we analyzed, Progressive was cheapest, on average, for drivers with a DUI. Rates vary depending on many personal factors, so compare car insurance quotes from at least three insurers to find the best rates for you.

Fewest consumer complaints: Farmers

Relative to its size, Farmers had the fewest complaints reported to state regulators for private passenger auto insurance, according to three years’ worth of data from the National Association of Insurance Commissioners.

But Farmers wasn’t the only large insurer with good behavior: Progressive and Allstate also had fewer complaints than expected relative to their size, which is measured by premiums written.

Best for customer satisfaction: State Farm

State Farm’s customers report better overall satisfaction than the others’, according to J.D. Power and Consumer Reports data. Satisfaction surveys include pricing, claims and customer service questions.

Geico was a close second place; in Consumer Reports surveys, it ranked the same as State Farm.

Best for coverage options: Allstate

Out of 11 optional coverage types we looked for — such as gap insurance and accident forgiveness — Allstate offered 10. Progressive and Liberty Mutual followed closely, offering eight each.

Here are some differences:

  • Allstate and Liberty Mutual offer both gap insurance and new-car replacement, while Progressive offers only gap insurance. Because the coverage is similar, insurers commonly offer only one or the other, if at all. Farmers offers new-car replacement, while State Farm and Geico offer neither.
  • Of the six insurers, only Geico offers mechanical breakdown insurance.

Best for discounts: Liberty Mutual

Liberty Mutual’s rates for a good driver in our analysis were $580 higher per year, on average, than Geico’s. Despite this, with 17 discounts available, Liberty Mutual offers the most savings opportunities. Geico follows closely with 16 discounts, while Progressive and State Farm tie with 13 discounts each. Some insurers, like Farmers, offer different discounts depending on your state.

ALSO READ  Geico Insurance Review for 2020

Best for tech and apps: Geico

Consumers expect smooth online experiences and slick apps for many services, and insurance is no exception. Geico stands out for having:

  • An in-app vehicle-care feature to monitor your car’s maintenance.
  • Locators in the app for gas, parking and nearby attractions.
  • A voice-activated resource for Amazon Alexa and Google Assistant plus an in-app virtual assistant.

The other big insurers have some similar tech features, but Geico has the most.

Average Insurance Rates By Coverage Type

COMPANYLOWMEDIUMHIGH
Allstate$1,772$1,880$1,983
American Family$1,329$1,391$1,413
Farmers$1,582$1,682$1,787
Geico$1,088$1,168$1,255
Nationwide$1,861$1,864$1,892
Progressive$1,274$1,373$1,489
State Farm$1,143$1,234$1,326
Travelers$1,192$1,267$1,335
USAA$830$885$940

Saving around $150 a year is nothing to sneeze at, especially if you’re on a tight budget. With the potential costs of a car accident, however, that short-term savings can cost you quite a bit if you have an accident. Say, for example, you get a low coverage policy that only offers $15,000 in coverage for medical costs, and you’re at fault for an accident that injures someone and results in $30,000 worth of medical bills. Once your insurance pays out the $15,000, you can be sued for the rest of the money. That can result in the loss of assets, like your house or savings. When choosing insurance coverage, think about the assets you’ll want to protect in the event of an accident, not just your monthly premiums.

Most major insurers offer car insurance coverage in three general tiers: low, medium, and high (even if they don’t necessarily advertise it as such). We created identical profiles in our study to represent drivers, then found out how rates changed with the three levels of coverage. The profiles were assigned a clean driving record, a good credit score, and 12,000 miles of annual driving. We used both males and females with the ages of 25, 35, and 60. The 2015 Honda Civic, 2015 Toyota RAV4, and 2015 Ford F-150 are the vehicles used in our analysis. 

How to Save Money on Car Insurance

You probably can’t morph from a 25-year-old driver to a 60-year-old one (not right away, anyway), and you can’t suddenly get married (unless you find a willing partner) to save money on car insurance. You also probably can’t move from the suburbs of Boston to Iowa just to save money on your auto insurance premiums. However, you can take some steps to save on car insurance and get the cheapest car insurance possible. 

Getting car insurance discounts can cut your auto insurance premiums down. Common car insurance discounts include good student discounts for teen drivers and college students, bundling discounts for multiple policies, paperless billing discounts, and good driver discounts. Learn more about car insurance discounts to save on your car insurance premiums.

Improving your driving record can save you a ton on car insurance. Take steps to be a safe driver. Respect the speed limit and always leave adequate following distance. Never drive while under the influence of any substance, and do not drive distracted by any device, particularly your phone. 

Fixing your credit will do more than save you on interest rates, it can save you when it comes to your car insurance premiums. Take steps to improve your credit, like refinancing your car loan, making all other debt payments on time, and paying down other outstanding debts. As your credit score rises, contact your insurance company or shop around and compare rates to start seeing savings.

The most important thing you can do to save on car insurance is to shop around. Get car insurance rate quotes and compare them. As you can see from the cheapest car insurance rankings, there is a huge variation in what different companies charge. By getting multiple car insurance rate quotes, you’ll see which company can save you the most money.

How to get cheap car insurance quotes

If you’re looking for the cheapest car insurance you can get, it’s essential to shop around and compare quotes. You may find that your current insurer is cheapest, but that can change, so check roughly once a year.

No matter who your insurer is, these tips could help you save on your policy:

  1. Look for discounts — even ask for them. There could be discounts you’re not taking advantage of. For instance, maybe you retired and are driving less than when you bought your policy. Mention that and you might get a low-mileage discount. Ask for all available discounts when you’re getting auto insurance quotes.
  2. Rethink your deductible. A higher collision and comprehensive deductible might make sense if you rarely drive or are comfortable with the financial risk. Raising your deductible means you’d owe more out of pocket if you had to file a comprehensive or collision claim, but it’s a surefire way to get cheaper car insurance.
  3. Know when to cut coverage. Don’t strip away coverage just for the sake of cheaper insurance. You’ll need full coverage car insurance to satisfy the terms of an auto loan, and you’ll want it as long as your car would be a financial burden to replace. But for older cars, you can drop comprehensive and collision coverage, which pay out only up to your car’s current value, minus the deductible.
  4. Cash in on major life changes. Certain life events could translate to cheaper car insurance, so shop for quotes whenever something major changes in your life. For instance, many companies offer a lower rate for married couples or domestic partners. Or perhaps you moved to a suburb with lower accident and crime rates. If your risk for accidents goes down, your rates just might, too.
  5. Revisit quotes after your driving record improves. Shop for car insurance quotes just after the three- and five-year anniversaries of any accidents, tickets or moving violations, after which they may be dropped from your driving record.

The Cheapest Car Insurance Companies in 2020

Average Annual Rates:

  • USAA: $885
  • Geico: $1,168
  • State Farm: $1,234
  • Travelers: $1,267
  • Progressive: $1,373
  • American Family: $1,391
  • Farmers: $1,682
  • Nationwide: $1,864
  • Allstate: $1,880