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The Cheapest Car Insurance

/Updated /10 Comments/in , /by Mary Hunt

Want to make certain the company with the cheapest rates insures your automobile? Me, too! To discover the answer, we went straight to the source looking at drivers in all zip codes in all 50 states and Wash D.C. to discover the lowest average rates.

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NerdWallet, a reputable personal finance company, has recently released an exhaustive study to discover the companies with the lowest average car insurance rates in a number of categories.

The most affordable car insurance is generally the minimum coverage required by your state. This type of insurance, also known as liability insurance, covers property damage and medical expenses for other people in an accident you caused—where you were found to be at fault.

As you peruse what follows, understand that your car insurance premiums will vary depending on your location and driving history, among other factors. The best way to find cheap car insurance is to shop around and compare quotes from at least three insurers. With that, let’s get right into the cheapest car insurance out there.

  • Geico: This company offers an average rate of $29 per month for the minimum coverage.
  • Central Insurance: This regional company has an average rate of $21 per month for the minimum coverage.
  • Geico: If you have had an accident, this company offers an average rate of $48 per month for the minimum coverage.
  • American Family: If you have a DUI, this company offers an average rate of $60 per month for the minimum coverage.
  • Geico: If you have poor credit, this company offers an average rate of $42 per month for the minimum coverage.

Cheapest Overall: Geico

According to NerdWallet’s analysis, Geico is the cheapest car insurance company in the country. On average, their annual rate is $354, or around $29 per month.

Additionally, NerdWallet in another rating report gives Geico a 4.5 rating (on a scale of 1 to 5). Geico enjoys an A++ (Superior) rating for financial strength from AM Best, the company’s highest ranking. Geico offers a wide range of discounts available for auto insurance to help lower rates. Finally, Geico holds the top spot on J.D. Power’s 2021 U.S. Insurance Digital Experience Study.

 

Cheapest Regional: Central Insurance

Central Insurance offers even cheaper rates than Geico, but only in a number of states. It’s also worth noting that smaller insurers may have excellent customer service. This company’s average annual rate is $257, or about $21 per month.

Keep in mind that the availability of coverage through Central Insurance and other small regional companies like MMG and Secura may be limited.

 

Cheapest after an Accident: Geico

Depending on your driving record, the most affordable car insurance company varies. The subject analysis found that Geico has on average the lowest average rate for drivers with one at-fault accident, at $577 per year, or $48 per month.

 

Cheapest after a DUI: American Family

If you have a DUI on your driving record, your car insurance premiums are likely to be significantly higher. However, it is still possible to find affordable options. NerdWallet’s analysis found that American Family Insurance is the cheapest car insurance company for drivers with a DUI, with an average annual rate of $716, or approximately $60 per month.

 

Cheapest for Poor Credit: Geico

If you have poor credit, your car insurance premiums will be higher than good credit drivers. On average, drivers with poor credit can expect to pay around $400 more annually for auto insurance than those with good credit.

When shopping around for car insurance, consider Geico as an option—the analysis reveals they have the lowest average rates for drivers with bad credit at approximately $42 per month and $501 yearly. Nonetheless, it is essential to research different options before deciding on a provider as rates may vary significantly.

A credit-based score considers factors such as debt and payment history but assigns different weights than a traditional credit score.

It is worth noting that California, Hawaii, Massachusetts, and Michigan do not allow insurance companies to use credit when determining car insurance rates.

How to get cheap car insurance

Consider these tips to reduce your auto insurance rates.

  1. Ask for discounts. There could be savings from car insurance discounts you’re not taking advantage of, but you need to ask. Example: You are driving fewer miles each year because you ow work from home. Mention that when it’s time to renew, you might be eligible for a low-mileage discount.

  2. Accept a higher deductible. A higher collision and comprehensive deductible might make sense if you are willing to take on a larger financial risk. That is a surefire way to get cheaper car insurance. Just know you will owe more out of pocket if you have to file a comprehensive or collision claim. 

  3. Know when to cut coverage. Don’t strip away coverage just for the sake of cheap auto insurance. But if you drive an older car, consider dropping comprehensive and collision coverage. Typically these coverage types pay out but only up to your car’s current value, minus the deductible.

  4. Report life changes. Certain life events, such as getting married, your youthful driver just made the Dean’s List for outstanding grades, you added a security system to your vehicles, you moved to a less expensive area for car insurance, or other such changes in your life. Many companies offer a lower rate for such life events. That means shopping around for insurance could help you get cheaper coverage. 

  5. Get quotes every three years. That is about the time it takes for accidents and tickets to fall off your driving records. It makes sense to shop for cheap car insurance quotes  three to five years after any accidents, tickets, or other moving violations. 

 

Methodology: NerdWallet averaged rates based on public filings obtained by pricing analytics company Quadrant Information Services, examining rates for 40-year-old men and women for all ZIP codes in all 50 states and Washington, D.C. Although it’s one of the largest insurers in the country, Liberty Mutual has not included in its rates analysis due to a lack of publicly available information.

 

 

 

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10 replies
  2. Donna Tolson Edmundson says:

    We used e-surance and were directed to Kemper Direct which was much cheaper than our name brand insurance. Our claims have been seemless and excellent. We too keep our deductible at $1000. and save it through our freedom account along with our auto insurance savings

    Reply
  3. Jennifer says:

    We got Geico for our car some years ago after taking 15 minutes to save 15%, and later added our home. But the rate kept creeping up and my husband decided to shop around this year. He got way better rates from Liberty Mutual, on both car & house (we saved $500 on the house and a significant percentage on the cars). Before we switched he called Geico again to see if they would match their competitor’s price, but they couldn’t/wouldn’t do it. Moral of the story: Don’t assume that because Company X is cheapest today, they will always be cheapest.

    Reply
  5. DANNA MURDEN says:

    Geico may by far be the cheapest but pray you don’t have an accident and need parts for your car. They have very cheap parts made that don’t fit correctly. Ask any reputable body shop how badly they hate dealing with Geico Insurance. It’s not because the can’t get them to pay the bill but because they have to use their parts that don’t fit properly and are cheaply made. That’s why the insurance is so cheap. One of those old sayings you only get what you pay for. I know of some body shops that won’t take a car in with Geico insurance because their employees have complained so much about the aggravation of trying to make the parts fit.

    Reply
  7. Bill says:

    We switched from Geico to Safeco 6 months ago. When I called Geico to cancel the agent admitted that; “we do not do a good job in Kentucky.” Safeco came in about half of what Geico was charging us.

    Reply
  8. Charlyn Jensen says:

    While this info is good to know, I don’t think that carrying just the state minimum is a good idea for anyone with assets that could be taken in a lawsuit that exceeds the small liability coverages states require as minimums. Also, you didn’t fully explain that this type of insurance leaves your own vehicle unprotected. There are times when cheapest is not the best choice!

    Reply

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