State Farm is cheap because the company's stellar reputation for customer service and claims support earns them more customers than any other provider. For example, State Farm captured 16% of the market in 2019, writing nearly 40.9 million premiums that year. This volume allows State Farm to offer more competitive rates. State Farm ranked 3rd overall in WalletHub’s cheap car insurance review partly because it offers discounts like Drive Safe and Save and Good Student. Plus, State Farm rewards customer loyalty with discounts for insuring more than one car or bundling multiple policies, such as home and auto.
State Farm is especially cheap for safe drivers in particular. That’s because State Farm has special savings opportunities for drivers in this category, such as discounts for drivers who are accident-free or who take driver's education courses. But even though State Farm is among the cheapest car insurance companies, the only way to confirm you’ve found the lowest price is to compare quotes from multiple companies. Your final premium is based on a variety of factors, like your driving record, insurance history, the type of car you drive, and more, and all insurance companies can’t offer the same rate.
To get a personalized quote from State Farm, you can speak to a representative by calling 1 (800) 782-8332.
Your car insurance is likely so high because your driving record is poor, your car is costly to insure, you live in a high-risk location, you’re carrying too much coverage, or you’re not taking full advantage of discounts. The average car insurance premium has also increased by more than 50% in the past 10 years.… read full answer
8 Reasons Why Your Car Insurance Is So Expensive
1. Poor Driving Record
Your driving record is probably the most important factor in determining your car insurance rates. If your record is poor, with accidents and driving violations, and you have a history of claims, your rates will be high. You will also pay more than average if you’re bad with credit, young (especially young and male), or unmarried.
2. Expensive-to-Insure Vehicle
Insurance companies like safe, boring cars that nobody wants to steal for joy-riding or parts. If you choose to drive something large, fast, luxurious, statistically unsafe on the road, or popular with thieves, you will pay more.
3. High-Risk Location
Where you live has a large impact on your premiums. Some areas of the country have much higher insurance costs than others. A number of factors go into this, such as the history of accidents in the area, population density, the number of uninsured drivers, crime statistics, bad weather patterns, etc. Also, if you live far from work and have a long daily commute, the high annual mileage could raise your rate.
4. High Coverage Amounts
If your coverage limits are high and your deductibles are low, you will be happy if you need to make a claim, but not as happy when you’re paying your premiums. If the insurance company risks having to pay out more in the future, you will have to pay more now.
5. Too Few Discounts
Insurers offer a very wide variety of discounts. Valued customer discounts offer savings for things like loyalty, multiple cars and policies, and paying online. Driver discounts may apply if you are a good driver, good student, belong to a certain profession or organization, are married, or more. Your car may also qualify for a discount if it has equipment that makes it safer to drive or harder to steal. Discounts are available to nearly everyone, and you may qualify for some that you aren’t getting credit for yet.
6. Too Young or Too Old
Teens are statistically more likely to cause car accidents than the average driver, so insurance companies charge them the highest premiums. Drivers who get their license at 16 years old usually see their premiums decrease with every year of experience, however, and age 25 is generally considered a turning point when premiums become considerably lower.
Experienced drivers in their 40s and 50s are often the cheapest to insure. But rates begin to rise again after age 65.
7. Low Insurance Score
Every major insurance company uses a credit-based insurance score to calculate premiums where allowed by law. Like credit scores, insurance scores are based on credit report information, only they are used to predict a driver’s likelihood of filing a claim. The rationale is that individuals who are careful with their money tend to be careful drivers, too. However, insurance scores are controversial, so they are banned in Massachusetts, Hawaii, and California. Most other states also have restrictions on their use, which can be found on the state insurance regulator’s website.
8. Costs Increasing Overall
Record-setting natural disasters, more phone-related car accidents, high rates of insurance fraud, and expensive-to-repair car technology have all increased costs for insurance companies. As a result, insurers have been raising their prices to cover their expenses.
From 2010 to 2019, the average cost of car insurance increased by more than 50%. Prices have gone up every year. This steady rise in insurance costs has outstripped other consumer costs. Even skyrocketing hospital costs lag slightly behind car insurance.
Overall Cost Increases from 2010 to 2019
Car Insurance: 52.2%
Hospital Services: 49.1%
Cost of Living: 17.2%
Physician’s Fees: 15.7%
You can’t reverse this industry-wide inflation. But if you want to lower your own insurance costs, address as many of your personal factors as you can. Then get quotes from multiple insurance companies and compare.
No, you cannot negotiate car insurance rates because the industry and prices are heavily regulated by each state. An insurance company can’t change its range of rates, once it is approved, without a new state review and evidence that the change is financially necessary. If your insurance company gave you a significantly different rate from the first one it quoted you, the insurer could face large fines or lose its insurance license.… read full answer
Although you can’t negotiate insurance rates, you can strategically negotiate the insurance shopping experience to get the lowest price possible for the coverage you need. While every insurer’s rates are approved by the state, they aren’t all the same. Comparing car insurance quotes from multiple companies is one of the most important strategies for finding the best deal. Taking full advantage of discounts is another. Discounts don’t change the base rates; they offer a percentage off the total premium. Companies often have many discounts that you may not know about. For example, GEICO has affiliation discounts for belonging to, or working for, more than 800 organizations. It is worth a call to a customer service representative to see if there’s a discount or two that could help lower your premium.
You also have the options of lowering your coverage or raising your deductibles to get your premiums down. You must have the minimum coverage mandated by your state, but anything above that is your decision. Think carefully about what you need. If you have an older car, for example, you may not even need collision/comprehensive coverage. Also consider your deductibles carefully. Raising them can reduce your premium, but you don’t want to make them so high that you can’t afford to pay them in case of a claim.
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