Best Car Insurance Companies

The cheapest type of car insurance is state-minimum liability coverage. Liability car insurance costs $716 per year on average, and it is cheaper than a full coverage car insurance policy since it does not include comprehensive and collision coverage. Also known as third-party insurance, liability insurance pays for other drivers' expenses when the policyholder causes an accident.

Liability insurance tends to be the cheapest type of insurance because it offers the most minimal coverage. Other types of coverage like gap insurance and roadside assistance do cost less than liability insurance, but they generally cannot be purchased on their own and the cost will be on top of your liability insurance premiums.

Cheapest Car Insurance Types

Note: Data is from Quadrant Information Services, insurance company websites, and third-party sources. Individual pricing may vary.

The cheapest liability insurance is offered by companies that have competitive rates across the board, as well as a variety of discounts to help keep premiums low. Depending on your state and driving history, some companies offer even cheaper insurance premiums than the national average liability insurance cost of $716.

Cheapest Liability Car Insurance from Popular Companies

• Geico: $506
• AAA: $576
• USAA: $633
• Progressive: $649
• Mercury: $675
• Travelers: $691
• Esurance: $719
• Liberty Mutual: $879
• MetLife: $915
• State Farm: $919

Annual premiums for the cheapest car insurance companies are representative of a 45-year-old male driver with a good driving history in California. Individual premiums may vary.

To learn more, check out WalletHub's guide to cheap car insurance. 

The five types of car insurance are liability, comprehensive, collision, uninsured/underinsured motorist, and personal injury protection/medical payments. These are the most common types of car insurance, though many insurance companies sell other types of coverage as well, like gap insurance and rental reimbursement.

The 5 Types of Car Insurance

1. Liability

Covers other people's expenses after an accident caused by the policyholder.

2. Comprehensive

Repairs or replaces the policyholder's car if it's damaged by something other than an accident, like vandalism or a natural disaster.

3. Collision

Pays to repair or replace the policyholder's car after any accident, regardless of fault.

4. Uninsured/underinsured motorist

Covers the policyholder's repair and medical expenses if they're hit by a driver without insurance or without sufficient liability limits.

5. Personal injury protection (PIP) and medical payments (MedPay)

Cover the policyholder's medical expenses after an accident, regardless of fault.

Liability insurance is required in nearly every state, and some states also require additional coverage like PIP and uninsured/underinsured motorist insurance. There are no states that require comprehensive or collision insurance, but those types of insurance are usually mandatory for vehicles that are leased or financed.

To learn more, check out WalletHub's guide to the different types of car insurance.

You can get the best car insurance rates by comparing quotes from several companies, taking advantage of discounts, and rethinking how much coverage you really need. To start shopping for the best car insurance rates, check out WalletHub's picks for the best car insurance companies in your state.

How to Get the Best Car Insurance Rates 

1. Compare Quotes

Since every car insurance company calculates premiums differently, the easiest way to ensure you're getting the best rate possible is by comparing quotes from several insurers. Additionally, you should compare quotes every time you go to renew your policy so you can make sure you're not overpaying.

2. Consider Smaller Insurers

While the big car insurance companies may have great ads, they may not always offer the best rates. Be sure to consider smaller insurers when shopping for coverage. WalletHub's list of the cheapest car insurance companies is a good place to start shopping for the best rates.

3. Look Into Discounts

Car insurance discounts can help you save up to 35% on your premiums. Most insurance companies offer a wide variety of discounts, such as multi-policy discounts and discounts for being a safe driver.

4. Check Your Coverage

At the very least, you will need to have your state's minimum required amount of coverage and any coverage your lender or lessor requires, if applicable. Beyond that, you can determine whether optional types of coverage are worth the cost.

5. Improve Your Credit

In most states, car insurance companies use “insurance scores” to help determine rates. Insurance scores are based on credit report information and indicate a driver's likelihood of filing a claim. By raising your credit score, which is based on the same information, you may be able to find better car insurance rates.

6. Change Your Deductibles

Higher deductibles result in cheaper premiums, but remember to only choose a deductible that you can afford to pay out of pocket in an emergency. 

7. Practice Save Driving

The easiest way to make sure you can get the best car insurance rates possible is by being a safe driver. Speeding tickets, DUIs, and at-fault accidents can cause car insurance premiums to skyrocket. If you already have some moving violations on your driving record, remember that they only affect your rates for a few years. Taking a defensive driving course could help minimize the impact on your premiums in the meantime, too.  

Car Insurance Companies with the Best Rates

• Geico
• USAA
• Erie
• Auto Owners
• State Farm

To learn more, check out WalletHub's guide to lowering car insurance costs.

The best way to compare car insurance coverage is to get online quotes from multiple companies in order to determine which offers the cheapest premiums for your chosen coverage types and limits. Also, make sure to compare car insurance discounts and read reviews to get a feel for potential customer service issues.

All of that may be easier said than done, however. With that in mind, we'll keep things as simple as possible below, as we guide you through the car insurance comparison process step by step.

Steps to Compare Car Insurance Coverage 

Step One: Understand Your Options

Knowing what types of coverage exist and what your state requires drivers to carry is the first step to being able to confidently compare car insurance coverage. Pay attention to your state's requirements for liability insurance and if they mandate additional coverage like personal injury protection (PIP).

The most common coverage options are: 

• Liability
• Collision
• Comprehensive
• PIP/MedPay
• Uninsured/Underinsured Motorist
• Gap Insurance  
• New Car Replacement

Lenders may require you to have collision and comprehensive insurance even though they are not required by any state laws. Collision and comprehensive are also key components of full coverage insurance.

Step Two: Collect Your Information

In order to request quotes, you'll need specific details about any drivers and vehicles you intend to have on the plan. This includes:

• Driver names, dates of birth, license numbers, and relevant driving history such as recent violations, claims, or accidents
• Vehicle identification numbers (VIN), makes, models and years of all vehicles

Step Three: Pick Companies to Compare

Start with the best or the cheapest insurers in your state. Not all types of coverage are offered by every insurer so be sure to check that they offer the types you're considering buying.

Step Four: Get Quotes 

Once you've found a few companies you might be interested in, determine whether to get quotes online, through a captive agent, or through an independent agent or broker. Don't forget to also look into what discounts are offered by each company.

• Online

Using your driver and vehicle information, request quotes from different companies and see how their coverage options and costs compare. To better understand how coverage options and limits can affect premiums, you can also try requesting several quotes from the same company.

• Captive Agent

Captive agents work for one specific insurance company, but they can guide you through all the details of the coverage options for their company and get you quotes in person or over the phone. They'll be able to answer any questions you may have about policy limits and deductibles to help you compare your options.

• Independent Agent or Broker

Since they don't work for one specific company, independent agents and brokers can discuss coverage options from a variety of companies and give you quotes for each. Like a captive agent, they can answer any questions you may have about specific policy limits and deductible choices to help you compare your options.

Step Five: Consider Reviews

When choosing an insurer, it is important to read reviews from other consumers to understand whether or not the company has good customer service and claims processes. Even if a company has great rates and great coverage options, if they seem difficult to work with, the rates and coverage probably aren't worth it. 

Final Thoughts

It is generally best to purchase as much insurance as you can comfortably afford. That way, you know you'll be financially covered in the event of an accident.

To learn more, check out WalletHub's guides to getting car insurance and comparing car insurance rates.

Geico is the insurance company with the highest customer satisfaction, according to WalletHub's analysis of factors such as J.D. Power customer satisfaction ratings and the NAIC complaint index. Geico also is one of the cheapest major insurance companies. 

Car Insurance Companies With High Customer Satisfaction

Ratings based on WalletHub Editor Review, NAIC complaint index and J.D. Power score.

Just remember that customer service isn't everything. Affordable rates, coverage options, and available discounts are also factors to consider when shopping for car insurance. They will affect your overall satisfaction, too.

To learn more, check out WalletHub's picks for the best car insurance companies.

The most popular car insurance companies are State Farm, Geico and Progressive, which service more than 120 million policies and have a combined market share of 43.1%. These companies are available in all 50 states and the District of Columbia.

Most Popular Car Insurance Companies

1. State Farm
2. Geico
3. Progressive
4. Allstate
5. USAA
6. Liberty Mutual
7. Farmers
8. Nationwide
9. American Family
10. Travelers

Together, these insurance providers were responsible for auto policies totaling nearly $185 billion in premiums during 2019, according to the Insurance Information Institute. They have been among the most used car insurance companies for at least the past five years.

The best way to get cheaper car insurance is to compare quotes from multiple companies and then switch to whichever insurer offers the coverage you want at the cheapest rate. Other ways to get cheaper car insurance include taking advantage of discounts, improving your driving record, and raising your credit score.

10 Ways to Get Cheaper Car Insurance

1. Compare quotes every 6-12 months.

Every car insurance company calculates premiums slightly differently, so the quote you get from one company can easily be hundreds of dollars more expensive than another company's quote. Getting quotes from multiple insurers every time you need to renew your policy can help you realize if you're overpaying for the same amount of coverage. 

2. Take advantage of discounts.

All major car insurance companies offer a variety of discounts, which can save drivers as much as 35% in some cases. For instance, many insurers offer multi-policy and multi-car discounts, as well as good student and good driver discounts, and more.

3. Increase your deductible.

Raising your deductible will lower your premium, though it's important to choose a deductible amount that you can afford in an emergency. A car insurance deductible is an amount that you have to pay out of pocket before your insurer will cover the rest. Deductibles apply to several types of coverage, including collision and comprehensive insurance.

4. Improve your credit score.

Insurance companies use credit-based insurance scores, where allowed by state law since studies have shown that these scores effectively indicate a driver's likelihood of filing a claim. Given that insurance scores are based on credit report information, raising your credit score can help reduce your rate over time.

5. Consider usage-based insurance.

Usage-based insurance is a type of car insurance that calculates your premium based on your driving habits. Each company's usage-based program varies, but most consider your total mileage, braking, acceleration, and speed. These programs are ideal for safe drivers, especially those who do not use their cars for long commutes or frequent trips. 

6. Choose a car that is inexpensive to insure.

Cars that are particularly fast, powerful, and/or costly to repair are among the most expensive to insure. Insurers also charge higher premiums for cars that are more likely to be stolen. The next time you go car shopping, compare insurance quotes for different models in advance with this in mind. And if your premiums are prohibitively expensive now, consider trading in your vehicle for a car that is cheap to insure.

7. Take a defensive driving course.

In some states, insurance companies are required to give you a discount for completing a defensive driving course. Even where it isn't mandatory, insurers will sometimes provide a discount to encourage customers to improve their driving techniques.

If your insurer does not lower your premium just for taking a course, working on your driving skills will still pay off in the long run and help you keep your record clean. On that note, certain states also allow you to take a course in order to prevent driver's license points from affecting your car insurance rates.

8. Consider your coverage types and amounts.

All the different types of car insurance can make it difficult to determine what exactly is worth paying for. At a minimum, you need to fulfill your state's requirements and also purchase any coverage your lender or lessor requires. But beyond that, you can weigh whether each add-on coverage option is worth the price.

For instance, maybe you should drop uninsured motorist property damage insurance from your policy if you already have collision insurance. Or maybe you don't need rental reimbursement coverage anymore because you could borrow a family member's car if needed.

9. Practice good driving habits.

Moving violations like speeding tickets signal to your insurer that you are a risky driver, as do serious convictions like reckless driving. By driving safely, you can keep yourself safe and your premium low. If you have tickets or at-fault accidents on your driving record already, work on driving carefully from now on, since they will only affect your rate for a few years.

10. Check out local and regional companies.

Large car insurance companies spend billions on advertising every year, but smaller insurers may be able to provide the cheapest premiums in some cases. So, when you're shopping around, make sure to compare quotes from companies of all sizes. You can use WalletHub's cheap car insurance guide as a starting point. Just click on your state to compare the cheapest insurers.

Car insurance premiums are based on drivers' individual risk factors as well as the coverage types and limits they choose. Check out WalletHub's full guide on the factors that affect car insurance rates for more information.

The best car insurance for new drivers under 25 years old is from companies like Allstate, Geico, Progressive, and Safeco. They are among the cheapest car insurance companies for drivers of all ages, both under 25 and older, according to WalletHub's Cheap Car Insurance Report. These companies provide a variety of coverage choices at affordable prices, along with numerous discounts applicable to drivers under 25.

Best Car Insurance For New Drivers Under 25

• Allstate
• Esurance
• Liberty Mutual
• Mercury
• Metromile
• Progressive
• Safeco
• State Farm
• Travelers
• USAA

Drivers under 25 typically pay higher insurance premiums than older drivers, so options for reducing those high costs are especially important. When shopping for auto insurance, new drivers under 25 should consider their state's car insurance requirements, as well as what coverage they will need to be fully protected on the road. Then, they should look into opportunities for discounts.

Many major insurance providers offer discounts that can help reduce the cost of premiums for young drivers. Companies like Geico and Allstate provide good student discounts for drivers under 25 years old who maintain at least a B grade-point average. Young drivers who take a driver's education course or a defensive driving course are eligible for savings, too.

Finally, some companies, like Metromile and Esurance, offer usage-based auto insurance policies that calculate premiums based on how much you drive. These policies can offer an affordable alternative for young drivers who don't drive frequently.

Once a driver turns 25, they are considered to be more experienced and less likely to be involved in an accident, thus their insurance premiums are likely to decrease. Estimates show that premiums decrease by approximately 10% for people with a good driving history once they turn 25.

The best car insurance companies for first time drivers over 25 years old are Erie Insurance, American Family Insurance and State Farm. When shopping for car insurance, first time drivers over 25 should look for the highest quality coverage at the lowest price, but they should also expect to pay more for coverage than other drivers their age. Although car insurance costs the most for new teen drivers, lacking experience at any age means that you're considered high-risk and will pay a higher premium.

Best Car Insurance Companies for First Time Drivers Over 25

• Erie Insurance
• American Family Insurance
• State Farm
• Geico
• Progressive
• Allstate
• Nationwide
• Liberty Mutual
• USAA

While most of these companies operate nationwide, Erie Insurance and American Family Insurance only operate in 12 and 17 states, respectively. Additionally, USAA is only available to military servicemembers and their families.

No matter which insurance company you choose, time is the best tool for new drivers over 25 who want to save money on their car insurance. Costs will usually begin to lower after three years of good driving, and the biggest drop in your premium will come after nine years of driving. Aside from your driving record, age is also going to help long-term costs. Insurance rates gradually decrease as drivers get older, until they reach senior status. 

The NAIC number is a five-digit code assigned by the National Association of Insurance Commissioners to each insurance company. NAIC numbers can be used to find the number of complaints filed against a company, financial and legal information, or if a company has a valid license to operate in your state.

 NAIC Numbers Are Used To:

• Find and/or file consumer reports and complaints
• Find fraud allegations previously filed against insurance companies
• Find information about insurance companies' finances
• Find insurance companies' licenses

Consumers can search an insurer's NAIC number on the National Association of Insurance Commissioners website to file complaints or to find licensing reports, consumer complaint reports, and finance overview reports.

Consumers should be careful when looking for a company's NAIC number because larger companies will have a main NAIC number as well as a unique NAIC number for each type of policy they offer (e.g. auto insurance, life insurance, household insurance). Below, you can see the main NAIC numbers for some of the country's largest insurance companies.

NAIC Numbers for Major Insurance Companies