Cheapest car insurance companies in 2021
Finding the cheapest auto insurance company can be a great way to lower your monthly expenses. Bankrate obtained current premium information from Quadrant Information Services and analyzed the data to help you find low-cost auto insurance. Auto-Owners and USAA offer the cheapest minimum coverage car insurance on our list, with affordable rates at $382 and $384 per year, respectively.
In the U.S., the average cost of minimum coverage car insurance is $565 per year, while full coverage costs $1,674 per year, on average. Choosing an auto insurer that offers the cheapest insurance coverage for your situation can help you feel more in control of your finances. We feature average rates for minimum coverage here because minimum limits tend to be the cheapest option. However, minimum coverage provides relatively little financial protection, so you may want to consider full coverage car insurance.
- Auto-Owners offers the cheapest average minimum coverage from a major insurer at $382 per year.
- You can expect to pay about $34 per month for minimum coverage based on the major auto insurers Bankrate reviewed.
- Smaller providers, such as Union Mutual and EMC, offer competitive rates at $14 per month for minimum coverage.
What is the cheapest car insurance company?
Auto-Owners offers the cheapest average auto insurance rates, based on our analysis of minimum coverage premiums obtained from Quadrant Information Services. USAA, Amica, Erie and Geico round out the top five cheapest companies on our list.
To decide which cheap car insurance companies to feature, Bankrate’s insurance editorial team evaluated each company based on quoted average premiums, coverage options, discounts, policy features and third-party rankings for customer satisfaction from J.D. Power and financial strength from AM Best. We combined these metrics into a Bankrate Score. The companies each received a score on a scale of 0.0 to 5.0. The higher the Bankrate Score, the more highly a company ranked in various rating categories.
|Insurance company||Average annual premium for minimum coverage||Average monthly premium (rounded to the nearest dollar)||Bankrate Score|
If you prefer working with a local agent over using a mobile app, Auto-Owners has independent representatives in the 26 states it serves. The company ranks near the top of the 2020 J.D. Power U.S. Auto Claims Satisfaction Study, indicating that its customers are generally very satisfied with its claims process. Auto-Owners offers numerous policy add-ons as well, so you can build a policy that fits your needs. However, Auto-Owners isn’t available nationally, so it may not be an option in your area.
Learn more: Auto-Owners Insurance review
If you are active or retired military or an immediate family member of someone who is, USAA is a great company to consider for cheap auto insurance rates and good coverage. The major insurer routinely receives exceptional customer satisfaction feedback from J.D. Power, although it is not officially ranked due to its eligibility restrictions. USAA has military-focused discounts like savings for storing your car while you are deployed and garaging your car on a military base, as well as a few endorsements, including accident forgiveness and ridesharing coverage, to help you tailor your policy to your needs. Although USAA is available nationwide, it isn’t an option for all drivers. If you aren’t eligible, you’ll have to look elsewhere for cheap coverage.
Learn more: USAA Insurance review
Although only available in 12 states and Washington D.C., Erie consistently performs well with its prices and customer service. Options like accident forgiveness, rental reimbursement, travel expenses and pet injury coverage are available in addition to the standard coverage options. Erie also has a unique Rate Lock feature that allows the policyholder to lock in their premium and coverage, although your rate will change if you make certain updates to your policy, like adding a new vehicle or driver. Just like Auto-Owners, Erie is a regional provider. If you live in a state where coverage isn’t offered, the company won’t be an option for auto insurance.
Learn more: Erie Insurance review
Farm Bureau has a relatively cheap average rate, but the company also offers robust coverage options. You could personalize your policy with roadside assistance, replacement cost coverage or the Driveology telematics program, which can help you earn discounts based on your driving habits. You might also lower your premium with savings opportunities like good student, low mileage and multi-car. Farm Bureau does have smaller subsections of its company in various regions around the country — Southern Farm Bureau and Iowa Farm Bureau, for example — and rates are likely to vary based on your region.
Learn more: Farm Bureau Insurance review
With one of the largest menu of discounts in the industry, it is no surprise that Geico made our list of affordable auto insurance carriers. You may save for being a federal employee, military member, good student, safe driver or a member of certain organizations. Geico might also be a great choice for you if you like to handle your insurance digitally. The company earned the top spot in the 2021 J.D. Power U.S. Insurance Digital Experience Study for the Service category. However, if you want a well-rounded policy, Geico might not be the best fit. The company only offers a few endorsement options, so you might not be able to add coverage options to fit your needs.
Learn more: Geico Insurance review
Cheapest car insurance rates from smaller companies
Although large companies might offer more discount programs, you might want to get an insurance quote from companies with a smaller market share in your search for cheap coverage. Smaller insurers may offer more affordable car insurance and personalized coverage than larger, national insurers.
|Insurance company||Average annual premium for minimum coverage||Average monthly premium (rounded to the nearest dollar)|
|Nodak Insurance Company||$164||$14|
Due to less advertising and lower overhead costs, many smaller companies may offer more competitive premiums than their larger counterparts. Although these carriers might not sound as familiar as the larger companies, getting quotes from these lesser-known insurance providers might help you find a lower premium if they offer car insurance in your area.
Cheap car insurance by driving history
Although maintaining a clean driving record is one of the best ways to keep your car insurance premiums low, accidents happen. Most car insurance companies will surcharge your policy for at-fault accidents, tickets and DUI convictions. Multiple incidents on your driving record might mean that you will have to search for high-risk or non-standard coverage.
Because of the increase in perceived risk, auto insurers will typically charge more for high-risk drivers. However, getting quotes from several providers can still help you find the cheapest auto insurance company for your situation. Drivers with incidents on their record may want to consider full coverage because of the increased risk of vehicle damage. Because of this, we have included each company’s average monthly rates for full coverage car insurance, rather than minimum coverage, for a driver with a clean record and after one speeding ticket, at-fault accident or a DUI conviction.
Average monthly full coverage premium by driving history
|Insurance company||Clean driving record||One speeding ticket||One at-fault accident||One DUI|
Cheap car insurance rates by state
Each state has its own insurance regulations, which affect the coverage you need to purchase and how much you will pay. And because each company has its own rating algorithm, the cheapest company for one driver might not be the cheapest for another. Getting quotes from several companies can help you compare premiums, but, on average, these are the cheapest companies in each state.
USAA offers cheaper average premiums for minimum coverage in many states than the company we listed, but since eligibility is limited, we have left the company off this list. Taking that into consideration, Geico offers the cheapest average minimum coverage car insurance in more states than any other provider on our list.
|State||Cheapest car insurance company||Average annual minimum coverage premium|
|Arkansas||Southern Farm Bureau||$316|
|Kansas||Iowa Farm Bureau||$325|
|Missouri||Missouri Farm Bureau||$335|
|New York||Main Street America||$304|
|Rhode Island||State Farm||$329|
|South Carolina||American National||$227|
|South Dakota||Farmers Mutual of Nebraska||$172|
How to find cheap car insurance
Insurance helps protect your finances. Although your premium is an important factor, buying minimum coverage levels could cost you more in out-of-pocket expenses if you cause an accident. Keeping your coverage needs in mind while looking for a cheap auto insurance policy can help you protect your financial health. Here are some ways to find the best cheap car insurance for you:
- Shop around. Every company has its unique way of rating your policy, so the cost for the same coverage can vary between providers.
- Take advantage of discounts. Most companies offer auto insurance discounts to help lower your premium. Insurers that offer usage-based telematics programs or safe driving discounts may have a larger impact on reducing your rates.
- Understand your coverage needs. Full coverage car insurance provides more financial protection, but it may not be the right coverage for everyone. Licensed insurance agents don’t generally recommend buying less coverage just to save money, but knowing what coverage you need can help you only buy what applies to your situation. Speak with a licensed agent if you have questions about how much coverage is right for you.
- Consider your deductibles. If you have full coverage, you have comprehensive coverage and collision coverage on your policy. Increasing one or both deductibles can lower your premium, but make sure you can afford to pay the deductible if you file a claim for damage to your vehicle.
- Reevaluate your auto insurance occasionally. Staying with the same company for several years can help you earn loyalty discounts. But if you have recently experienced a life event like buying a home, getting married or having a child, you might want to think about your coverage needs and shop around.
Frequently asked questions
Who has the cheapest car insurance?
No single company offers the cheapest rates for everyone. Car insurance rates vary from one driver to another depending on factors like location, age (except in Hawaii) and driving record. Shopping around and comparing quotes based on your needs is usually the best way to find the most affordable car insurance for you. Many of the providers in this article offer affordable coverage for various types of drivers. Still, you may be able to find cheaper car insurance from providers not mentioned on our list.
Is the minimum required insurance in my state enough coverage?
Your state’s minimum required levels of coverage are all you need to drive legally in your state, but most insurance experts recommend opting for additional coverage to offer more financial protection in case of an accident. Determining how much coverage you need involves a review of your broader financial picture. Additionally, if you have a loan or lease on your car, you’ll likely have to carry full coverage as a condition of your financing. If you are not sure how much you need, consider speaking with a licensed insurance agent or licensed financial planner.
Does age affect car insurance rates?
Your ability to find cheap car insurance might depend on your age. Car insurance rates typically peak and drop at certain ages. Generally, premiums are more expensive the younger you are — especially for inexperienced teen drivers — and then begin decreasing between the ages of 25 and 60. However, senior drivers may start to see rate increases around age 70 due to an increased likelihood of accidents and insured risk. Hawaii does not allow auto insurers to use age as a rating factor.
Bankrate utilizes Quadrant Information Services to analyze 2021 rates for all ZIP codes and carriers in all 50 states and Washington, D.C. Quoted rates are based on a 40-year-old male and female driver with a clean driving record, good credit and the following full coverage limits:
- $100,000 bodily injury liability per person
- $300,000 bodily injury liability per accident
- $50,000 property damage liability per accident
- $100,000 uninsured motorist bodily injury per person
- $300,000 uninsured motorist bodily injury per accident
- $500 collision deductible
- $500 comprehensive deductible
To determine minimum coverage limits, Bankrate used minimum coverage that meets each state’s requirements. Our base profile drivers own a 2019 Toyota Camry, commute five days a week and drive 12,000 miles annually.
These are sample rates and should only be used for comparative purposes.
Incident: Rates were calculated by evaluating our base profile with the following incidents applied: clean record (base), at-fault accident, single speeding ticket, single DUI conviction and lapse in coverage.
Bankrate Scores primarily reflect a weighted rank of industry-standard ratings for financial strength and customer experience in addition to analysis of quoted annual premiums from Quadrant Information Services, spanning all 50 states and Washington, D.C. We know it is important for drivers to be confident their financial protection covers the likeliest risks, is priced competitively and is provided by a financially-sound company with a history of positive customer support.
To determine how well the best car insurance companies satisfy these priorities, third-party agency ratings from J.D. Power, AM Best, S&P, NAIC, and Moodys had the most impact on the companies’ Bankrate Scores. As price is a common consideration for drivers, we analyzed quoted premiums based on 40-year-old male and female drivers with a 2019 Toyota Camry. This profile, assessed across more than 35,000 ZIP codes in the U.S., provided a basis on which drivers may compare each provider.
While coverage options, insurer availability, affordability and customer experience are often the top priorities, Bankrate also analyzed each insurer’s online and mobile resources for policy management and claims handling. Insurance is rapidly evolving to keep pace with our digital world, so these aspects also carried weight in determining Bankrate Scores.