Learn how to shop for car insurance by gathering the right information, choosing whether or not to use an agent and comparing different companies
Discover if you are overpaying for car insurance below
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Learn how to shop for car insurance by gathering the right information, choosing whether or not to use an agent and comparing different companies
Discover if you are overpaying for car insurance below
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The first step is to gather the information you’ll need to get a quote. Most insurance companies ask for the same things, which include your:
You may need to gather some of this information from other people or physically locate your car’s VIN. Doing this ahead of time can make it much easier to shop for car insurance.
Source: Automoblog
Figure out what type and amount of coverage you need. Each state requires a basic level of bodily injury and property damage liability coverage that compensates other drivers when you cause an accident.
In most states, you won’t be able to get less coverage than that, but you could increase your liability coverage amounts (which we recommend). Here’s a basic list of different coverage types that may be available to you:
If you have an auto loan, your lender will require you to carry full-coverage insurance on the vehicle. In fact, your car insurance policy will list the lender as a lienholder so the lender is compensated in the case of a total loss.
Full-coverage insurance includes liability coverage plus comprehensive and collision coverage. Consult your loan documentation or reach out to your lender to see what insurance is required if you want to make a change in coverage. Otherwise, keep everything the same as your current policy and give the lender’s name and address to your new insurer.
You may also want to have gap insurance if you owe more than your car is worth. Gap insurance pays the difference between the value of your car and what you owe on the loan in the event of a total loss.
Most car insurance companies also offer roadside assistance as an add-on. Depending on the company, this can cover:
If your car is under factory warranty, you may have roadside assistance from the manufacturer. Extended warranty plans often come with roadside assistance as well.
There are multiple ways to get car insurance quotes, each with its own pros and cons.
One of the simplest ways of shopping for car insurance is to get a quote from an agent at an insurance company. Also called captive agents, these representatives only work for a single company like Geico or Allstate. They won’t compare other options for you, but they’ll know the ins and outs of their company’s coverage options.
Independent agents and brokers both work with multiple insurance companies, which means they can help you comparison shop. An insurance agency in your town might offer coverage from Geico, Progressive and State Farm along with a few local options. However, brokers and independent agents make more money if you buy more coverage, so they have the incentive to sell you more.
You can also go to company websites and get auto insurance quotes online (unless a company only operates through agents).
Using an online quote comparison tool is an easy and fast way to get prices from many companies at once. Similar to using a company’s website, special situations like rideshare insurance or classic car insurance may require an agent’s help.
Always give correct information when filling out a car insurance quote. Car insurance companies can change your rate or even cancel your coverage if they discover something important was missing from the quote, like specific details of your driving history.
Once you’ve decided how you want to get a quote, the next step is to compare your car insurance quotes. Whether you use a broker, a comparison tool or a handful of individual company websites, you’ll find the best rates this way. You can also see which companies offer the best discounts for your situation.
Most car insurance companies offer a variety of discounts that can help you save money. Comparison shopping is important because different companies offer different discounts. For example, State Farm offers a discount of up to 25% for good students, while Geico’s good student discount is up to 15%. Some companies don’t offer good student discounts at all.
Below are some common car insurance discounts you’ll find when shopping around.
Some companies also offer telematics insurance programs that reward good drivers with discounts. These programs use an app, plug-in device or both to track things like your average speed, mileage, acceleration, cornering, braking and late-night driving.
Examples include:
If you don’t drive much, you can also find pay-per-mile insurance from a few companies. With a pay-per-mile program, your bill will usually have a base monthly or daily rate plus a rate for every mile you drive. You could save a significant amount if you work from home or only drive occasionally. Examples of pay-per-mile programs include:
The last step in shopping for car insurance is to purchase your policy. Many car insurance companies offer same-day coverage as long as you sign up and make the first payment. You can also choose to pay for the policy in full up front.
When switching car insurance companies, overlap your old and new policies by at least a full day. In other words, don’t cancel your current coverage until the new coverage kicks in. You can do this by scheduling the cancellation in advance. A lapse in coverage of even a single day can make you riskier to car insurance companies and increase your insurance premiums.
Auto insurance policy costs vary widely depending on the driver and company. In this section, we’ll look at full coverage and state minimum average costs.
According to our rate averages, 35-year-old drivers with good driving histories pay $2,008 per year or $167 per month on average for full-coverage car insurance. Below, you can see 10 popular car insurance companies ranked according to annual cost averages.
Car Insurance Company | Average Monthly Rate Estimate | Average Annual Rate Estimate |
---|---|---|
Nationwide | $119 | $1,433 |
Erie Insurance | $122 | $1,458 |
USAA | $126 | $1,512 |
Travelers | $133 | $1,595 |
Geico | $133 | $1,596 |
Auto-Owners Insurance | $135 | $1,619 |
State Farm | $138 | $1,657 |
American Family Insurance | $154 | $1,851 |
Progressive | $169 | $2,030 |
Allstate | $217 | $2,598 |
Minimum coverage is the cheapest option for car insurance. According to our averages, good drivers pay about $627 per year or $52 per month on average for minimum-liability coverage.
Car Insurance Company | Average Monthly Rate Estimate | Average Annual Rate Estimate |
---|---|---|
Auto-Owners Insurance | $30 | $358 |
USAA | $32 | $387 |
Erie Insurance | $33 | $390 |
Geico | $38 | $461 |
State Farm | $44 | $523 |
Nationwide | $44 | $531 |
Progressive | $58 | $697 |
Auto Club Enterprises (AAA) | $63 | $754 |
American Family Insurance | $68 | $810 |
Allstate | $71 | $854 |
Car insurance rates are based on a variety of factors, but there are a few things you can do to find cheaper quotes. As you shop for car insurance, consider the following:
There are multiple ways to shop for car insurance, but the best thing to do is to compare multiple companies at once. Gather your information, choose what types of coverage you need, decide how you want to get a quote and then compare car insurance quotes to find the best option for you.
You may have dozens of car insurance companies available to you, but not all offer the best coverage, service or rates. Travelers and State Farm are among our top picks for excellent cheap car insurance.
Travelers is a widely known insurer in the U.S. and is known for its affordable prices and flexible add-on coverage. The company provides drivers with the standard types of coverage in addition to roadside assistance, rental car coverage, loan/lease payoff and rideshare coverage.
Keep reading: Travelers insurance review
State Farm is our top recommendation for its affordable average rates, good selection of discounts and many coverage options. The company’s average rates are about 15% cheaper than the national average and it offers numerous ways for students and good drivers to get lower rates. State Farm also has an A++ financial strength rating from AM Best.
Read more: State Farm insurance review
Below are frequently asked questions about how to shop for car insurance.
Do the following when shopping for car insurance:
Yes, it’s a good practice to shop around for car insurance and compare coverage and rates from three to five providers. If you just shop from one company, you won’t know if it’s offering you the best coverage options or the best price.
We recommend shopping around for new car insurance every time your policy is up for renewal. This could be once or twice per year. You can always stay with your current company, but shopping around would help you find out if a better option became available.
The top 10 picks for car insurance from our MarketWatch Guides Team are:
Because consumers rely on us to provide objective and accurate information, we created a comprehensive rating system to formulate our rankings of the best car insurance companies. We collected data on dozens of auto insurance providers to grade the companies on a wide range of ranking factors. The end result was an overall rating for each provider, with the insurers that scored the most points topping the list.
Here are the factors our ratings take into account:
Our credentials:
*Data accurate at time of publication.