Not all car insurance quotes are created equal.
So how do you know if you’re being taken for a ride?
When it comes time to find a new policy, being armed with all the right information is the best way to save money on car insurance.
On Mar. 9, U.S. News & World Report released an analysis of car insurance rates from 50 states from most of the biggest names in car insurance to come up with a list of the cheapest providers in the country.
Here’s how your insurance company stacks up and what you can do to get even lower rates than the average.
The top 9 cheapest insurers
The national average annual insurance rate is $1,320, according to the U.S. News study.
Based on that figure, U.S. News looked at the major car insurance companies and compared quotes by age, gender and location demographics to come up with the below list of cheapest insurance providers for 2021.
USAA. With an average rate of just $875 per year (a savings of about $255 or 20% compared to the next cheapest company), this insurance company has the lowest premiums for nearly every driver demographic U.S. News looked at. And even when it wasn’t the cheapest, it was still fairly close in price to the cheapest. The caveat here? It’s just for people connected to the military.
Geico. Annual rates with Geico are around $1,099, which is still 17% cheaper than the national average. This insurance company offers some of the lowest rates for almost all of the demographics analyzed in the study, especially young drivers.
State Farm. Coming in at No. 3 on the list, State Farm’s average annual premium is $1,168, about 12% less than the overall national average.
Travelers. As the fourth cheapest insurance company on the list, the average premium with Travelers is $1,250 — about 5% lower than the national average. While most driver demographics will receive rates below the average, there are a few exceptions to that rule.
Nationwide. This insurance company is the last on the list that has average premiums below the national average, punching in at $1,284. With savings of about 3%, Nationwide’s rates are below or near the average for most drivers in the study — with one exception. For drivers with a DUI, it’s one of the most expensive options.
Progressive. With average premiums of $1,334, Progressive is about 1% more expensive than the national average. For most drivers, the company’s rates are fairly close to average. It’s more expensive for 25-year-old drivers and drivers with one accident. However, it’s the cheapest company in the study for drivers with a DUI.
American Family. The average rate at American Family is $1,451, which is both a considerable jump from the rates at Progressive and 10% more than the national average. Rates are higher across the board for almost all demographic groups U.S. News studied except for drivers with one accident or drivers with a DUI. For both those groups, American Family’s rates fall below the average.
Farmers. Average premiums at Farmers are $1,634, which is about 24% higher than the national average. Rates at Farmers were comparatively high for every driver demographic and archetype in the U.S. News study, often by several hundred dollars a year or more.
Allstate. As the most expensive car insurance company in this year’s annual rankings, the average rate at Allstate is $1,787. That’s 35% higher than the national average. Every demographic pays more for insurance through Allstate, but 25-year-old drivers will find it particularly expensive.
While different car insurance companies offer different rates, knowing the average rate at each company isn’t enough to be able to figure out what rate you’d qualify for.
How much you’ll pay for car insurance varies based on a whole range of other factors: what state or zip code you live in, your age, driving history, gender, experience and financial situation.
Here are the top three factors U.S. News found that influence car insurance premiums.
Being a good driver
Most car insurance companies will reward you for being a good driver. Being a safe, experienced driver is one of the best ways to get cheap car insurance.
Car insurance companies like having good drivers as customers because they’re less likely to make insurance claims. And so in exchange, they get access to lower rates than other drivers with more spotty records.
According to U.S. News, the cheapest car insurance for good drivers is USAA, followed by Geico and then State Farm.
Having a bad driving record
Just as being a good driver affects your insurance rating, having accidents, speeding tickets or DUIs are going to have a significant impact on what you pay.
Receiving a speeding ticket is likely to cause your rates to increase by about 21%, while accidents will move it up by about 42%. However, the worst thing you can add to your record is a DUI.
Speeding ticket: USAA, State Farm raises the least) Same for car accident
With a DUI, you can expect to see your premiums go up by about 60%.
As for which companies are the most affordable with speeding tickets and car accidents on your driving record, USAA comes in first with State Farm a solid second. With a DUI, it’s State Farm that is the most affordable with USAA close behind.
Your credit score
Drivers with bad credit face similar car insurance rates as those who have DUIs, based on U.S. News' analysis. When you have a poor credit score, you can expect average rates of $2,227 — which is 70% more than drivers with good credit, whose average rates are $1,310.
If you don’t know your score, you can check it for free.
For drivers with weak credit scores, the most affordable insurers were USAA, followed by Geico and Nationwide.
But if you have bad credit, that doesn’t mean you have to settle for high rates forever. By shopping for credit repair services can help you get your score up and lock in more affordable car insurance rates.
How to find the cheapest car insurance
Beyond your credit score and driving record, the single best way to find the lowest price on car insurance is to shop around for the best rates.
Experts like the Insurance Information Institute will recommend you review at least three quotes before settling on a single offer. Doing so can save you more than $1,000 a year.
If you’re happy with your insurer, but you still think you could save a few dollars, why not ask for a pandemic discount? With everyone sticking closer to home this past year, some insurers have already given rebates to customers — and they might do it again if you ask.
And once you’ve started to find savings on insurance, why stop with just your car? The same savings principle applies to help you save a cool $1K on homeowners insurance and find affordable life insurance, which has seen a huge surge in demand during the pandemic.
The only big choice you’ll have to make is what to do with the hundreds of dollars you’re going to save every month.