Having a good credit score does not guarantee a cheap car insurance rate, but it is a good indicator of how much you can expect to pay. Insurance companies give drivers with good credit a better rate because it shows that you will pay your premiums on time.
However, not all car insurance companies are created equal. Some insurance providers charge lower rates than others, even if you have a good credit score. To help you find the right provider, we identified the best car insurance for people with good credit.
Best companies for divers with good credit
We chose the best car insurance companies for good credit based on average rates, coverage options, discounts available, financial strength and third-party ratings. Here are the five companies that we recommend:
|Insurance company||Average annual premium for minimum coverage||Average annual premium for full coverage|
Amica is a highly-rated auto insurance company. It is known for its affordable rates, good customer service and reliable coverage. You may customize your policy with accident forgiveness, roadside assistance, full glass replacement coverage, gap insurance and more. Amica also offers a long list of generous discounts, in addition to dividend policies, where you can get back up to 20% of your premium at the end of your policy period.
Auto-Owners is a solid choice for any driver who has a good credit score. Not only will you enjoy low rates, but you can also get add-on policies for more protection. Auto-Owners sells a variety of endorsements, like gap insurance, diminished value coverage, roadside assistance and the Personal Automobile Plus package, which includes 10 additional coverages, like cell phone replacement insurance. Auto-Owners also offers a number of discounts.
Geico is well known for being one of the cheapest car insurance companies on the market. Geico’s car insurance coverage options are somewhat limited, but there are more than a dozen discounts available. Geico has potential savings for military personnel, federal employees, good students, employer/membership groups, bundling your policies, having a vehicle with safety features, wearing your seatbelt, taking a defensive driver course and more.
USAA sells car insurance to active duty and retired military service members. If you are affiliated with any branch of the military, you may take advantage of USAA’s highly-rated customer service, reliable coverage and generous discounts, like savings for good drivers, being claims-free, taking a defensive driver course and garaging your vehicle on base. The company claims that drivers save over $700 when they switch carriers and join USAA.
How credit affects your car insurance
Your credit score has a major impact on your car insurance rate. When you apply for a policy, most insurance companies will run a credit report to check your score. In most cases, the higher your credit score is, the lower your car insurance premium will be. Drivers with a poor credit score tend to pay the most expensive rates.
Insurance companies consider individuals with poor credit to be high-risk drivers, meaning they are more likely to file claims, pay their premium late, stop paying their premium altogether, etc. To offset the potential risk, insurance companies charge more for coverage. If your credit score increases or decreases significantly during your policy period, you will see the rate change when your policy renews.
However, if you have great credit and a poor driving history, having good credit is unlikely to save you as much money.
Providers that don’t factor credit into your insurance rate
It is standard practice for insurance providers to look into your credit score before they give you a quote. In most cases, insurance companies use a soft credit check, as opposed to a hard credit check, which means it will not impact your credit score.
However, some providers do not check your credit score when you apply for a policy. This is typically the case with non-standard insurance companies. Here are some insurance carriers that may not look at your credit score:
- CURE Insurance
- Dillo Insurance
- Dairyland Insurance
- United Auto Insurance
- GAINSCO Insurance
In some states, it is against the law for insurance companies to use your credit score to calculate your rate. Currently, insurance companies in California, Massachusetts, Michigan and Hawaii cannot look at your credit history before selling you a policy. But keep in mind that if you fail to make the payments, insurance companies in these states can still cancel your coverage.
Things besides credit that affect your insurance rate
Your credit score is only one factor that affects your car insurance rate. Even if you have great credit, you can still get stuck with an expensive rate based on other criteria. Here are some additional factors that could cause someone with good credit to have a high insurance rate:
- Age: Your age is one of the biggest factors that impacts your credit score. Younger drivers pay the highest rates because they lack experience. As you get older, your insurance rate will decrease, assuming you maintain good credit.
- Claims history: Drivers with a good credit score but a lengthy history of insurance claims are going to pay a higher rate. You can lower your rate by avoiding claims when possible.
- Driving record: Good drivers typically get the cheapest insurance rates. People who have good credit but a messy driving record are going to pay a much higher premium because of it. You can get a lower rate by practicing safe driving habits.
- State: Every state charges a different rate for car insurance. For instance, a driver with a 750 credit score in Florida is going to pay a much higher premium than a driver with the same credit score in Maine.
How much does car insurance cost?
In the United States, the average full coverage car insurance policy costs $1,674 per year and the average minimum coverage policy costs $565 per year. However, car insurance rates are personalized, and every driver pays a different rate based on a number of factors.
How much car insurance do I need?
Every state has its own minimum liability car insurance requirement that drivers must meet in order to legally drive. Many drivers choose to upgrade their insurance to a full coverage policy, which includes collision, comprehensive, liability and medical payments coverage. Uninsured/underinsured motorist coverage and Personal Injury Protection (PIP) might also be included in a full coverage policy depending on the state.
Bankrate utilizes Quadrant Information Services to analyze 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 coverages that meet each state’s requirements. Our sample drivers own a 2019 Toyota Camry, commute five days a week and drive 12,000 miles annually.
These are sample rates and should be used for comparative purposes only. Your quotes may be different.
Rates are determined based on 2021 Quadrant Information Services data.