Who Has the Best Cheap Car Insurance?

If you own a car, car insurance is a required expense in 48 of the 50 states. If you don't shop around for your car insurance, you could end up with a hefty monthly premium and a headache when you need to file a claim. We researched and explored quotes from 51 companies in thousands of 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 claims processing.

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Table of contents

What is the cheapest car insurance company?

After our analysis, we found that Erie was the most affordable major insurer in the country, with an average yearly rate of $1,521 based on our sample driver — about 46% cheaper than the national average across all 50 states and the District of Columbia.

Graph shows the five cheapest car insurance companies in the United States
Graph shows the five cheapest car insurance companies in the United States

In the table below, you can see how the average annual rates for the 13 most affordable large auto insurers in the country compared based on online quotes we obtained for a sample 30-year-old driver.

Rank

CompanyAnnual Rate
1Erie$1,521
2State Farm$1,737
3Farm Bureau Mutual (IA Group)$1,781
4American Family$2,041
5Auto-Owners Insurance$2,112
6GEICO$2,158
7Nationwide$2,293
8Progressive$2,393
9Metropolitan$2,447
10Travelers$3,017
11Allstate$3,545
12Farmers$4,280
NA*USAA$1,307

* USAA only provides insurance coverage to current and former military members as well as their families, and was therefore excluded from our overall rankings.

The three cheapest car insurance companies

  • Erie

    Erie is the 12th largest insurer in the U.S., even though it's only available in 12 states and Washington, D.C. Overall, it was frequently the cheapest insurer for drivers in its market, beating state averages by 19%. In Pennsylvania, drivers who choose Erie could save 32% compared to the state mean.

  • State Farm

    State Farm is the largest auto insurance company in the country, providing policies nationwide and rates that beat the average in 46 states and D.C. Additionally, this company boasts an enormous network of local agents, meaning there is likely a State Farm agent who can help you with a policy in your city.

  • Farm Bureau Mutual

    Offering coverage to eight states, mostly in the Midwest and West regions, Farm Bureau Mutual's rates regularly beat out those offered by larger insurers. In Utah, this insurer's rate for our profile driver was 36% cheaper than the state average and nearly half the price of Allstate's.

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 for you. 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 you should make sure you're also 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 policyholders' satisfaction, customer service and claim filing process.

The Best Car Insurance Companies

  • Erie: Best overall company
  • State Farm: Best company after getting into an accident
  • USAA: Best company for military families
  • Metromile: Best company for low-mileage drivers
  • Auto-Owners: Best company for handling claims

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Best overall car insurance company: Erie

Erie is the cheapest insurance company—and reliable to boot. Customers can start their quotes online, which we found to be a streamlined process. Erie also scored high marks for policy options: It offers pet coverage, free accident forgiveness, free vanishing deductibles and roadside assistance, giving its customers a degree of flexibility not even found among the largest insurers.

Erie customers who are eligible for its rate lock program, can avoid premium hikes that could cause rates to creep up over the years. 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 remove a car.

Additionally, despite its smaller size, Erie offers the same types of discounts that larger national insurers provide. These include premium reductions for having multiple policies, a vehicle equipped with anti-lock brakes or anti-theft equipment as well as for savings for young and senior drivers.

If you want to buy cheap car insurance online without speaking to an agent, 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 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. Erie will be ideal for any customers within its market who do not mind putting in some extra effort to get quality auto insurance that won't break their budget.

The biggest downside to Erie is that it is only available in the following areas:

  • District of Columbia
  • Illinois
  • Indiana
  • Kentucky
  • Maryland
  • New York
  • North Carolina
  • Ohio
  • Pennsylvania
  • Tennessee
  • Virginia
  • West Virginia
  • Wisconsin

Best auto insurance company after an accident: State Farm

We found State Farm has the most affordable car insurance rates after a recent accident, compared to the many auto insurance companies we surveyed. Their rates after an accident increased by 19%, from $1,737 to $2,075. While that may still seem high, it was the smallest rate increase we saw of any company. On average, insurers increased rates by 41%.

How insurance rates increase after an accident

RankInsurance companyStarting rateAfter-accident ratePercentage change
1State Farm$1,737$2,07519%
2Erie$1,521$1,92426%
3Travelers$3,017$3,85828%
4Auto-Owners Insurance Co$2,112$2,74230%
5USAA$1,307$1,76635%
6Nationwide$2,293$3,13237%
7Farmers$4,280$6,02241%
8American Family$2,041$2,96245%
9GEICO$2,158$3,14046%
10Farm Bureau Mutual (IA Group)$1,781$2,67550%
11Allstate$3,545$5,36051%
12Progressive$2,393$3,81359%
13Metropolitan$2,447$3,95962%

Other pros of State Farm include its positive marks for its customer service and claims handling. Our survey of current customers revealed that most customers are happy with the way they are treated by State Farm, as it earned a rating that was above the average across the insurers we surveyed. Furthermore, 73% of respondents reported they were extremely satisfied with their most recent claims process with State Farm.

Best car insurance company for military members: USAA

If you're a service member, a veteran or a family member of one, then you could be eligible for USAA auto insurance. USAA scored 4.43 out of 5.00 in our survey's customer service rating — the highest of any insurance company with significant results. Additionally, 38% of USAA respondents reportedly stuck with the insurer for more than 10 years. For more information, read about USAA's insurance offerings 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 such as 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? Generally, for Metromile to be a good deal, drivers should only drive fewer than 7,500 miles per year. The biggest downsides to Metromile is that it is only available in eight states: California, Illinois, New Jersey, Pennsylvania, Virginia, Washington, Arizona and Oregon.

Best auto insurance for handling claims: Auto-Owners

Auto-Owners ranks as the best insurance company for claims handling. Of the auto insurance companies we considered in our survey, customers of Auto-Owners were the most satisfied with the claims process. For those who think a smooth claims process is the most important factor for car insurance, Auto-Owners should definitely be considered.

Chart comparing the percentage of customers that were extremely satisfied with their most recent car insurance claim.

The best car insurance coverage for you

Determining 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. Buying car insurance is inevitable if you own a car, so you'll need to get the right coverage for your needs and your budget. The following table gives a quick summary of the types of insurance you should have.

Type of coverageShould you have it?
Bodily injury liabilityRequired in every state except Florida
Property damage liabilityRequired in every state
Uninsured motoristRequired in 22 states and/or you do not have PIP or collision insurance
Collision and comprehensiveRecommended only if your car is worth more than $2,000
Personal injury protection/Medical paymentsRequired 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. Read more about how much coverage you need.

It's likely you're overpaying for your insurance policy. Here's how to find cheap car insurance

ValuePenguin analyzed nationwide insurance rates and found that a driver looking for a state-mandated insurance policy — the minimum coverage required — overpays by an average of $330 per year. Extrapolated across the country as a whole, this means Americans are overpaying for car insurance by almost $37 billion per year.

The best way to find cheap car insurance is to compare quotes from multiple companies. This can be done online, as most companies have quote tools that can be used to get car insurance rates. Additionally, if you prefer to work with an actual person when looking for car insurance, you could talk to an independent insurance agent who can help you compare rates from multiple companies.

Younger drivers feel more loyal to their insurance providers, yet are least happy with their current service

Despite feeling dissatisfied with their insurance experience, younger drivers feel the most loyalty to their insurers, according to ValuePenguin’s consumer survey. The findings indicate young drivers may not always be aware of the financial upside shopping between insurance companies, a fact that could eventually hurt insurance companies should policyholders realize cheaper rates may be available elsewhere.

While Gen Z drivers were found to be the least happy with their insurance provider of any age group, they are also the most loyal age group to their providers: 79% of Gen Z drivers report feeling loyal to their insurance provider, compared to just 66% of Boomers. Despite their loyalty, Gen Z was also the most savings-driven age group: they were the most likely to spend time looking for a deal if they knew they could save $100.

QueryGen ZMillennialsGen XBoomersSilent Generation
Happiness with your current provider would keep them from comparing auto insurance quotes51%59%67%69%70%
Would spend an hour each year comparing quotes to save $10070%70%62%46%52%
Feels loyalty to their insurance provider79%72%74%66%63%

In fact, all age groups looking for cheaper car insurance could benefit from comparing quotes. 70% of drivers would be willing to switch insurance companies if they can save $25 to $200 per year. The difference between our second cheapest insurer in our analysis (State Farm) and our cheapest insurer (Erie) is over $200, showing how even switching between two comparably affordable insurers can result in big savings.

Methodology: How we got our info

We collected quotes for thousands of ZIP codes in the U.S. for 51 insurance companies. Our sample driver was a single 30-year-old man who drove a 2015 Honda Civic EX and had a clean driving record. The only parameter that changed was the ZIP code where he lived in the U.S. These rates are for this specific driver profile and your results may vary. The amount of coverage we opted for gave our driver a bit more than what is required of state minimums:

Coverage typeStudy limits
Bodily liability$50,000 per person/$100,000 per accident
Property damage$25,000 per accident
Uninsured/underinsured motorist BI$50,000 per person/$100,000 per accident
Comprehensive and collision$500 deductible
Personal injury protectionMinimum when required by state

ValuePenguin's analysis used insurance rate data from Quadrant Information Services. These rates were publicly sourced from insurer filings and should be used for comparative purposes only — your own quotes may be different.

For its consumer survey, ValuePenguin commissioned Qualtrics to conduct an online survey of 866 Americans who have home and/or auto insurance, with the sample base proportioned to represent the general population.

ValuePenguin calculated the average amount drivers overpay for car insurance by calculating the difference between:

  • The average cost of a minimum coverage policy across all sample insurers in each state
  • The average cost of the cheapest sampled insurers in that state

These figures were then averaged across all 50 states and Washington D.C. to find a national average. This average was multiplied by the Federal Highway Administration's latest figure for the number of registered automobiles in the country to find aggregate amount drivers overpay for insurance.

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Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.