If you own a car, car insurance is a required expense in 48 of the 50 states. A lack of diligence when shopping for your car insurance could lead to a hefty monthly bill, as well as headaches if you actually need to file a claim. We researched and explored quotes from over 128 companies in 2,700 cities to determine which insurers had the lowest costs, nationally and in each state. Our team also evaluated which companies had the best track record for customer service and the claims process.
What is the Cheapest Car Insurance Company?
After our analysis of 2,700 cities and 128 companies, we found that Erie was the most affordable major insurer in the country with an average yearly rate of $1,052 based on our sample driver — about 31% cheaper than the national average across every insurer. The very largest of the five is GEICO, the second largest auto insurer in the U.S. by market share.
The Three Cheapest Car Insurance Companies
Erie is the United States’ 13th largest insurer despite being found in only nine states. Overall, it was frequently the cheapest insurer for drivers in its market, beating state averages by 28%. In states like Virginia and Pennsylvania, drivers could find Erie for 40% less than the state average.
The nation’s second largest insurer is the second least expensive one as well. Though found in every state, drivers in New York and Utah can save up to 50% by going with GEICO. On average, GEICO beat state averages by 28%.
Though not the most well known brand of auto insurance, we still found American Family in nearly 1,000 cities nationwide where it beat state averages by 14%. Drivers in Washington and Colorado can even reap premiums 32% and 29% under their state averages.
The Cheapest Insurers By State
The price of car insurance can vary greatly between states. One company may be expensive in Utah, but inexpensive in New York. In some states, a small, local company could even offer the best price. Below, click through to your state to see which company and cities have the least expensive car insurance based on the numerous studies we’ve conducted.
What Is The Best Car Insurance Company?
We identified the auto insurance companies with the cheapest rates, but, as with anything, you want to be sure you are getting high quality service from your insurance company. Reliable car insurance companies are critical in ensuring a smooth customer-insurer relationship. There are a few factors we deemed most important to evaluate a company on which affect policy holders’ satisfaction, such as, the average shopping experience, customer service, ability to resolve complaints, and quote filing process.
The Best Car Insurance Companies
Erie: Best Overall Company
State Farm: Best Large Company
Progressive: Best Company After Getting into an Accident
USAA: Best Company for Military Families
Metromile: Best Company for Low Mileage Drivers
The Hartford: Best Company for Handling Claims
Liberty Mutual: Best For the Shopping Experience
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Best Overall Car Insurance Company: Erie
Erie is the cheapest insurance company, and arguably the most reliable insurance company as well. They score points by allowing customers to start their quote online, which we personally found to be a streamlined and fast process. Erie also scored the highest marks from the number of policies they offer. Erie offers pet coverage, free accident forgiveness, free vanishing deductibles, roadside assistance, and many more, essentially giving its customers a degree of flexibility not even found amongst the largest insurers. Customers of Erie may also be eligible for its Rate Lock program. This is a unique program where customers won’t see their rates increase except for three reasons: you move to a different area, add or remove someone from your policy, or add or subtract a car. Lastly, despite its smaller size, Erie offers the same types of discounts larger national insurers provide such as bundling, anti-lock brakes, anti-theft, young driver and senior driver among others.
The biggest downside to Erie is that it is only available in Illinois, Indiana, Maryland, New York, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, and Wisconsin. As well, Erie still relies strongly on its agent network; which isn’t always a bad thing. A strong agent network is usually key to ensuring a smooth claims process. If you want to quickly buy car insurance without speaking to anyone though, Erie may not be the company for you. While you can start the process online, you ultimately will have to speak with an agent to finalize your quote. Erie will be ideal for any customers within its market, who do not mind putting in some extra effort to get quality and cheap auto insurance.
Best Large Car Insurance Company: State Farm
Of the biggest auto insurers in the U.S. — State Farm, GEICO, Allstate, Progressive and Farmers — State Farm ranks as the greatest overall. State Farm was rated 4/5 stars by customers and policyholders in a JD Power survey on companies shopping experience. State Farm is best known for its large agent network; they boast over 18,000 across the nation. It shouldn’t be surprising then that State Farm gets 5/5 stars for how its agents interact with customers. As well, State Farm is great when it comes to offering discounts. If you go with State Farm you will have up to 15 discounts to be eligible for which can equal hundreds of dollars worth of savings.
While State Farm’s shopping experience is well-reviewed, customers did not feel as strongly about it’s claims handling process. The company scored about the same as the other four large companies, but was still mediocre. A large national company may be expected to not be very efficient because of the various departments involved in handling individual claims. If you want the assurances guaranteed to you by a large, «legacy» carrier, then State Farm is the best to go with.
Best Auto Insurance Company after an Accident: Progressive
We found Progressive was the most affordable car insurance rates after a recent accident compared to the many auto insurance companies we surveyed. From the $1,241 average we state above, rates increased by 29% after an at-fault accident. While that may still seem high, it was the smallest rate increase we saw of any company including Erie, State Farm, GEICO and American Family.
Other pros of Progressive include it being an online company. You can get a quote directly from the Progressive website without having to speak to an agent. Cons of Progressive involve its customer service. Customers in the J.D. Power survey only gave mediocre remarks for Progressive for its buying experience and claims handling process. It isn’t the worst, but Progressive is far from the best in the field. Because of this, Progressive might be the best insurer ideally for customers prioritizing low rates, especially after an accident, and do not mind a bit more cumbersome claims handling process.
Rank Company Starting Rate After Accident Rate Percent Change
1 Progressive $1,241 $1,605 29%
2 Sentry $2,397 $3,220 35%
3 State Farm $1,372 $1,788 35%
4 Erie $1,052 $1,489 41%
5 Safe Auto $1,855 $2,634 42%
Best Car Insurance Company for Military Members: USAA
If you are or were in the military, or if your parents, parent-in-law, or spouse was in the military you are eligible for USAA auto insurance, and they may just be the best company for you. USAA scores 5/5 stars for the both shopping experience, and claims handling process in the J.D. Power study. They do particularly well on how you can report your claims to the company. You should also be highly satisfied with their final settlement claims. For more information, read here.
Best Car Insurance for Low-Mileage Drivers: Metromile
If you find yourself away from the wheel more times than not, a pay-per mile auto insurance company like Metromile may be the best company to go with. Metromile is one of the first companies in the U.S. where a bulk of a driver’s premium is determined by how much they drive. How much is too much? We found that generally for Metromile to be a good deal, drivers should only drive 7,500 miles or less per year. The biggest downsides to Metromile is a mediocre record of claims handling, in addition to the company only being available in seven states: CA, IL, NJ, OR, PA, VA, WA.
Best Auto Insurance for Handling Claims: The Hartford
Also known as AARP, The Hartford was the recipient of the 2016 J.D. Power study for car insurance companies ability to handle claims. The Hartford scored 5/5 stars for nearly every step of the claims process; from notifying them, to the repair process, and the final settlement. Those who think a smooth claims process is the most important factor for car insurance, The Hartford should definitely be considered.
Rank Company Initial Claims Process Service Appraisal Repair Process Settlement Overall
The Hartford 5 5 4 5 5 5
2 USAA 5 3 4 4 5 5
3 NJM Insurance Co. 5 5 5 3 5 5
4 Erie Insurance 5 5 5 5 5 5
5 Auto-Owners Insurance 5 5 4 4 5 5
Best Company for the Shopping Experience: Liberty Mutual
Liberty Mutual actually tied Erie insurance for this category, but since we already called Erie the best overall company, we’ll describe how Liberty Mutual is well known for a strong shopping experience. Customers of Liberty Mutual report in the study they were particularly satisfied with the flexibility of policies offered by Liberty Mutual, as well as their relationship with Liberty Mutual agents. If Erie is not located in your state, Liberty Mutual can be a good alternative if you can get a competitive rate.
Rank Company Policy Offerings Contentment w/ Pricing Local Agent Overall
1 Liberty Mutual 5 4 5 5
2 Erie 4 5 4 5
USAA 5 5 NA 5
4 The Hartford 5 5 3 5
5 American Family 4 4 4 4
The Best Car Insurance Coverage for You
To determine how much auto insurance is best for you comes down to understanding your current economic circumstances and how the different types of coverage work together. If you own a car, buying car insurance is inevitable, so it is really important you are getting the right amount for the right price. The following table gives a quick summary of what types of insurance you should have.
Type of Coverage Should You Have It?
Bodily Injury Liability
Required in mostly every state except FL
Property Damage Liability Required in every state
Uninsured Motorist Required in 22 states and/or you do not have PIP or Collision insurance
Collision and Comprehensive Recommended only if your car is worth more than $2,000
Person Injury Protection/Medical Payments Required in 15 states and/or you do not have health insurance
As to how much coverage you should have will depend on your economic situation. High net worth individuals should get high liability limits, as in those well above the minimum mandated by the state. In fact, they should have limits that equal their net worth. To read more in-depth about how much coverage you need, you should read on here.
Methodology: How We Got Our Info
We collected quotes from a variety of insurance companies across 2,700 towns and cities in the U.S, for 128 insurance companies. Our sample driver was a 30 year old male who drove a 2011 Toyota Camry. To obtain quotes, we kept parameters for getting coverage the same, such as that he was single, and had a clean driving record. The only parameter that changed was the zip code where he lived in the U.S. The amount of coverage we opted for gave our driver bit more than what is required of state minimums.
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