Choosing the right car insurance for your vehicle can be confusing. It's difficult to compare rates when companies bundle coverage differently or offer various add-ons. You need to be a savvy shopper to find the right car insurance for you. Read on to find an overview of the different types of coverage available, how insurance companies determine their rates and the best auto insurance providers.
Major factors that influence auto insurance rates
Auto insurance companies consider various factors when calculating premiums, including the driver's age, location, type of vehicle, record and credit score.
Since young people technically have less experience at the wheel, some insurance companies consider them high-risk. This is why young drivers must often pay higher premiums than experienced adults. But some insurance companies also charge higher premiums for senior drivers due to a similar assumption of high-risk.
Location is also a deciding factor for insurance companies since some areas statistically have more accidents or thefts. Drivers living in areas with high rates of accidents or car theft are likely to pay more since they have a higher likelihood of making a claim. On the other hand, people living in low-risk areas can even qualify for discounts on their premiums.
Type of vehicle
Generally, if you have an expensive car, you will probably get a higher-than-average rate. This happens because such cars are more expensive to repair or replace in an accident. Expensive cars are also more likely to be stolen, making them a higher risk for insurers. However, cars with good safety features tend to get lower rates.
Drivers who have had previous accidents or traffic violations are also perceived by insurance companies to be riskier and may face higher premiums. Conversely, drivers with a clean record may be eligible for discounts or lower rates. Insurance companies may also consider the length of time since your last accident or violation when computing your car insurance rates.
If you have a DUI or speeding ticket on your record, or have been involved in an accident, it doesn't always mean you will have a high rate. Some companies mentioned in this guide offer competitive rates for drivers with less-than-desirable records.
Just as with other types of insurance, companies consider your credit score to determine your rates. A good credit score suggests that you are a responsible person who is likely to make on-time payments and manage your finances well. As a result, you can get lower rates. A bad credit score suggests the opposite. However, since car insurance is different from a loan, a credit score might not be the deciding factor for some insurance companies.
The top 5 car insurance providers
|Minimum coverage rates||$40 per month, on average.||$65 per month, on average.||$56 per month, on average.||$63 per month, on average.||$52 per month, on average.|
|Full coverage rates||$98 per month, on average.||$154 per month, on average.||$168 per month, on average.||$116 per month, on average.||$104 per month, on average.|
|Customer Service||24/7 customer support online or through the app. Other support channels are also available.||24/7 customer support via online chat. Other support channels are also available.||No 24/7 insurance assistance. However, they do offer 24-hour emergency roadside service.||Progressive offers 24/7 claims support and online service.||State Farm has a 24/7 phone line. However, this doesn't apply for claims.|
|New car replacement||No||Yes||Yes||No||No|
Geico's auto insurance rates are a major selling point. The company offers great rates to drivers with good and not-so-good histories. This includes people with speeding tickets or poor credit. Geico also offers competitive rates for seniors and young drivers, who are often considered risky. Geico offers some of the best auto insurance for high-risk drivers.
Another pro of Geico is that it offers accident forgiveness, which all insurance providers don't offer. With accident forgiveness, you don't have to worry about getting an increase in your rates after your first accident.
However, Geico's rates for drivers with a DUI are higher than average. Geico also doesn't offer rideshare insurance. This means that if you work for a rideshare app like Uber, you won't get coverage for any accident that occurs during your work.
When it comes to customer satisfaction, users gave Geico 1.14 out of 5 stars based on 968 reviews on the Better Business Bureau (BBB) website. It's worth noting that most car insurance providers have low online review scores, as you will see in this list. So this doesn't necessarily mean you will have a bad experience with any of the providers listed. But you might read through customer reviews in order to manage your expectations for each company's weaknesses.
Like Geico, Allstate offers accident forgiveness. With the Gold level, your rates won't increase if you have one accident every three years. With the Platinum level, accidents don't increase your rates at all. In addition, Allstate offers new car replacements. This means that if you have an accident and total your new car — the model cannot be more than two years old — you can get a new one. Plus, they have a safe-driving bonus every six months for drivers who maintain a clean driving record. Unlike Geico, Allstate provides rideshare insurance. If ridesharing is a source of income for you, then Allstate may be a great option.
However, Allstate's high prices can be a drawback, especially for people who have a DUI or speeding ticket on their record, have caused an accident or have poor credit. Another point to consider is that Allstate customers gave it 1.08 out of 5 stars based on 721 reviews on the BBB website.
Nationwide has some great benefits for safe and responsible drivers, giving you more opportunities to save. For example, you can get charged a usage-based rate. This means the more you drive safely, the less you'll pay. If you consider yourself a safe driver, this can be a great way to save money. Nationwide also offers pay-per-mile insurance, which is perfect if you don't drive very often. Finally, Nationwide provides accident forgiveness and new car replacement.
However, Nationwide might not be the best choice if you have caused accidents resulting in injuries or have a DUI. Their rates are on the higher end for drivers who fall in this category. This means that if you have a history of such incidents, you might be better off with a different insurance provider. Another drawback of Nationwide is that it doesn't offer rideshare insurance coverage.
Nationwide has a 1.16 out of 5 score on the BBB site based on 238 user reviews.
Progressive is one of the most popular car insurance providers thanks to its great range of features and many years in the market. They offer gap insurance for new car owners, which is a feature that is not often offered. It provides coverage for the difference between what you owe on your car loan and what the car is worth at the moment.
Progressive also offers other great features like accident forgiveness, vanishing deductibles and non-owner car insurance. Vanishing deductibles mean that your deductibles can become smaller as time goes on. Non-owner insurance covers people who don't currently own a car but have occasional driving needs.
However, Progressive is more expensive than other car insurance companies for young and senior drivers. Also, if you have been in an accident, have poor credit or a bad record, then you will probably get high rates compared to other insurers. Progressive also lacks new car replacement, which may be a deal-breaker if you have a new car.
Another detail that may be of note is that Progressive has a 1.08 out of 5 score based on 882 user reviews on the BBB website.
State Farm is a popular choice for car insurance thanks to its many discounts, including two programs for safe drivers and young drivers. Additionally, the company provides generous rental car and travel expenses coverage. If you stay with State Farm for at least three consecutive years, you can receive a good renewal discount of 14% on average, which can save you a lot of money. All of this makes State Farm a solid option.
That said, State Farm also has some disadvantages. For example, the company tends to charge higher annual rates for drivers with poor credit. State Farm also doesn't offer gap insurance, accident forgiveness, new car replacement or vanishing deductibles. So features are limited compared to other providers.
According to the BBB, State Farm has a rating of 1.17 out of 5 based on 750 reviews, which doesn't speak well of State Farm's customer satisfaction. However, the company is over 100 years old and serves a high volume of customers, so they are likely to have a higher-than-average number of complaints.
What to consider when comparing car insurance quotes
Here are some key factors you need to consider when comparing quotes for car insurance:
How much insurance coverage is required
Look at your car's value and identify how much you need to be covered. Maybe your car is relatively new, has a high value or you have a loan or lease on it. If so, you may want to get full coverage to ensure you are fully protected in case of an accident or theft. You can also become a customer of an insurer that offers gap insurance and new car replacement. But if your car is older and has a lower value, you may want liability coverage only, which can help cover the costs of damages and injuries to others in an accident you caused.
Additional coverage options
Insurance companies generally offer additional coverage options for people in specific situations. For example, non-owner car insurance covers you in case you don't own a car but regularly drive for any reason. You may also want to consider gap insurance, new car replacement and accident forgiveness. These coverage options can help you if you own a new car or don't want rates increasing after an accident.
The cost of the insurance premium
All insurance companies have different systems to determine customers' premiums, so it's important to consider different options. Some insurers have competitive rates for people with bad records, and others do not. With that in mind, you can expect an annual premium of $1,500 to several thousand for full coverage. Some online publications estimate the average cost for full coverage car insurance to be around $2,000.
Start comparing car insurance quotes online today
Now that you know the options for coverage and providers, it's time to compare quotes. Most providers allow you to get a quote online. So consider the coverage you want, check if it is available from the providers in this list and request a quote. Make sure to provide correct information about yourself, your car and your driving history to get an accurate idea of how much car insurance is for you.
When you compare car insurance quotes, be sure to also consider all the features outside of coverage. You should also look at the customer reviews. As you can see from this list, most providers have low scores, so reading them yourself will help you make a more informed decision.
One more detail to consider is that if you choose a provider and discover you're not happy with it, you can always switch. To learn how to switch car insurance, check out our guide on the subject.