Which Companies Offer the Best Auto Insurance Rates?

Which Companies Offer the Best Auto Insurance Rates? article image.

Comparing auto insurance rates is a good way to find a policy that fits your budget and needs. Insurance companies weigh factors differently and some may focus on customers within a specific demographic, such as younger drivers. As a result, the company that offers your family members or friends the lowest rate—or that gave you the lowest rate a few years ago—won't necessarily be the best company for you now.

There are, however, some common criteria that insurance companies use to determine how much to charge in premiums, including your driving history, age and how much you drive. Knowing how various insurers weight these factors can help you refine your search.

The Zebra compared quotes from all U.S. ZIP codes for a 30-year-old single male driving a Honda Accord. Then, they adjusted common price factors to see which companies gave the lowest quotes. We've included the three lowest-priced companies for each category based on the results.

Best Auto Insurance Rates Based on Your Driving Records

Your driving record will likely have a direct impact on your insurance premiums. Getting into an accident, especially if you're at fault, will likely lead to higher rates in the future. Some companies, such as Allstate and Farmers, may offer accident forgiveness that prevents an accident from increasing your rates.

USAA, GEICO and State Farm may offer the lowest rates if you haven't been in an accident or have been in one at-fault accident. USAA, State Farm and Progressive had the lowest rates for a driver with a DUI or DWI in their driving records.

Best Auto Insurance Rates for Young Drivers

As anyone who's added a teen to their auto insurance can tell you, young drivers tend to be expensive to insure. Prices drop as you get older, and can level out once a driver is in their mid-20s. If you're a young adult (or someone covered by your policy is), you may want to shop for new quotes after every birthday.

For drivers who are 20 to 25, GEICO, State Farm and Liberty Mutual may offer low rates. Teenage drivers may save with Esurance, USAA and Nationwide.

Best Auto Insurance Rates Based on How Much You Drive

The less you drive, the less likely you are to get into an accident. Companies may offer low-mileage discounts or a lower premium if you drive less than 12,000 a year, which is the national average. You could also look for quotes from pay-per-mile insurance companies, which charge a low base rate plus a per-mile rate, or companies like Root Insurance, which track your driving during a test period and base your rate largely on when and how you drove.

Among the more traditional insurance companies, USAA, State Farm and GEICO may offer the lowest rates. But often, there won't be a big difference unless you go with a usage-based policy.

Best Auto Insurance Rates Based on Your Credit

In most states, credit-based insurance scores can be a factor in determining your auto insurance premiums. Since poor credit has been shown to correlate with higher costs for insurance companies, insurance companies may charge you more in premiums to cover their expected expenses. Having good credit can help you lower your premium.

USAA, GEICO and Nationwide had the lowest rates for a driver with very poor credit—a score in the 300 to 579 range. However, a driver with excellent credit (a score of 800 or higher, in The Zebra's survey) got the lowest rates with USAA, GEICO and State Farm.

How to Know What Kind of Auto Insurance Policy You Need

Determining which types of auto insurance you need is an important part of the decisions regardless of the company you go with.

At a minimum, most states require drivers to have liability coverage, which pays for others' medical bills and damage to their property. You may also have to purchase medical coverage or personal injury protection, which can help pay for your (and your passengers') medical care.

If you want coverage in case your vehicle is damaged or stolen, you'll need collision coverage (for damage from accidents) and comprehensive coverage (for theft and damage caused by something other than a collision, such as a storm). The coverage is optional if you own a vehicle, but you may be required to have full coverage—collision and comprehensive—if you have an auto loan or lease.

There may be additional options as well, such as a roadside assistance plan. Or, if you have a lease or loan, gap insurance can make up the difference if your vehicle is totaled and the current value is less than your outstanding loan.

You can also decide how much coverage you want and the deductibles for your policy's different coverages. Higher limits can help protect your personal assets, and lower deductibles mean insurance will kick in sooner. However, it's a tradeoff as more coverage and lower deductibles also lead to higher premiums.

How to Get the Best Rates on Your Car Insurance

No matter which types of coverage, limits and deductibles you choose, there are a few ways to save money on auto insurance:

  • Shop around. There's no insurance company that offers the best price for everyone. Shopping for auto insurance can help you determine which company will offer you the best price.
  • Ask about discounts. Insurance companies may be able to automatically include some discounts based on your age, relationship with the company and driving record. Installing an anti-theft device, cutting back on your driving or making another change could also qualify you for a discount, so be sure to contact your insurance company and ask them what you can do.
  • Improve your credit. In most states, your credit history and credit-based insurance scores can affect your auto insurance rates. As a result, improving your credit could help you qualify for better rates.
  • Get online quotes. Some insurance companies, such as Liberty Mutual, offer a discount if you buy your coverage online. Progressive and Elephant Insurance even give you a discount if you get a quote online and buy the policy with an insurance agent.

Periodically Get New Auto Insurance Quotes

In addition to looking for new quotes after big changes—such as buying a new vehicle or moving to a different area—you may want to shop around every six months to a year. You won't always find a savings opportunity, but the factors that determine your rates, your insurance needs and the companies' offering and preferences can all change over time.

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