Key Takeaways
- When shopping for car insurance, the best way to find an affordable rate is by comparing providers.
- Good drivers pay an average of $2,433 per year for full coverage or $736 per year for minimum coverage in the U.S.
- The best car insurance companies for coverage and affordability include Travelers and Geico.
How To Shop For Car Insurance
Shopping for the best car insurance isn’t exactly a thrill ride, but finding the right policy at the right price can feel like a win. Whether you’re a seasoned driver or a first-time car owner, comparing quotes and coverage options is the key to saving money and getting the protection you need. Buckle up — the MarketWatch Guides team will lead you through the process step by step.
Below are the steps for the best way to find and shop for car insurance:
- Gather Your Personal Information
- Decide What Coverage You Need
- Decide How You’ll Shop for a Car Insurance Quote
- Compare Car Insurance Quotes
- Buy a Car Insurance Policy
1. Gather Your Personal Information
The first step is to gather the information you’ll need to get a quote. Most insurance companies ask for the same personal details, including:
- Personal data: Your name, birth date, address and years at that address
- Vehicle details: Your car’s vehicle identification number, make, model, year, mileage and safety features
- Driving history: Your driving record from the past three to five years, including any tickets and at-fault accidents
- Current insurance information: The company you’re insured with at the moment and any coverage levels and birth dates of people listed on the policy
- Additional information: Your driver’s license number and the names of any other household members excluded from your policy
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.
2. Decide What Coverage You Need
Next, figure out what type and amount of coverage you need. Most states require a basic level of bodily injury and property damage liability coverage that compensates other drivers and their passengers when you cause an accident.
In most states, you won’t be able to get less coverage than that. But you can definitely get more liability coverage (which we recommend). Here’s a basic list of coverage types:
- Liability insurance: Liability insurance covers medical bills and repair costs for other drivers when you cause an accident, and it’s required by law in most states.
- Collision insurance: Collision insurance covers damage to your car in an accident, no matter who was at fault.
- Comprehensive insurance: Comprehensive insurance covers environmental damage (such as hail damage to your car), vandalism and theft.
- Underinsured/uninsured motorist coverage: Underinsured and uninsured motorist insurance cover your injuries and property damage when a driver without enough insurance causes an accident.
- Medical payments coverage: MedPay insurance helps cover medical bills for you and your passengers after an accident.
- Personal injury protection: PIP insurance covers your medical bills, lost wages and death benefits, and it’s often required by law in no-fault states.
Consider Lender Requirements
If you have an auto loan or lease, your lender or lessor 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. Check your loan documents or reach out to your lender to see what insurance is required if you want to change your coverage. Otherwise, keep everything the same as your current policy and give the lender’s name and address to your new insurer.
Gap Insurance
You may also want to have gap insurance if you owe more than your car is worth. If your car is totaled, gap insurance pays the difference between the value of your car and what you owe on the loan.
Roadside Assistance
Most car insurance companies offer roadside assistance as an add-on. Depending on the company, this can cover:
- Towing services
- Fuel deliveries
- Spare tire changes
- Battery jump-starts
- Lockout services
Before you add roadside assistance coverage, see if you already have it. 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.
3. Decide How You’ll Shop for a Car Insurance Quote
There are multiple ways to get car insurance quotes, and each comes with its own pros and cons. The main idea is to compare quotes when you shop for car insurance so you can find the best price for your unique situation.
MarketWatch Guides Tip
Always give correct information when getting 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, such as details of your driving history.
Contact an Insurance Company’s Agent
One of the simplest ways to shop 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, such as Geico or Allstate. They won’t compare other providers’ options for you, but they’ll know the ins and outs of their company’s coverage options.
Pros
The agent can ensure you’re getting all of the discounts you’re eligible for.
The agent has detailed knowledge of the company’s coverage options and policies in your state.
Cons
Using individual agents is a slow way to compare companies.
Use an Insurance Broker or Independent Insurance Agent
Independent agents and brokers 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. Brokers and independent agents make more money if you buy more coverage, so they have an incentive to sell you more.
Pros
You can compare national and local insurers with one application.
Brokers and independent agents are knowledgeable about the companies they work with.
Agencies and brokers can help you find the best coverage for your situation.
Cons
Agencies and brokers have the incentive to sell you more coverage than you may need.
Get a Quote From a Company’s Website
You can also go to company websites and get auto insurance quotes online (unless a company only operates through agents).
Pros
You can get an instant price after filling out a quote form.
You don’t have to talk with an agent if you know what you need.
Some companies give discounts for shopping online.
Cons
To compare companies, you’ll need to fill out multiple quote forms.
Use an Online Comparison Tool To Shop for Car Insurance
Using an online quote comparison tool is an easy and fast way to get prices from many companies at once. As with using a company’s website, special options such as ride-share insurance or classic car insurance may require an agent’s help.
Pros
You can fill out one form and compare prices from many companies.
You can get a quote and start coverage on the same day.
There’s no pressure from agents or brokers to get specific car insurance coverage.
Cons
This method doesn’t offer extra help if you don’t know the level of coverage you want.
Quotes might not apply to special situations such as classic car coverage.
You might get marketing emails or phone calls from the companies you didn’t choose.
4. Compare Car Insurance Quotes
Once you’ve decided how you want to get a quote, the next step is to compare car insurance quotes. Whether you use a broker, a comparison tool or company websites, you’ll find the best rates through comparison. You can also see which companies offer the best discounts for your situation.
Find the Right Car Insurance Discounts
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.
Here are some common car insurance discounts you may find when shopping around:
- Multi-car
- Multi-policy or bundling
- Teen driver
- Driver education
- Defensive-driving course
- Good student
- Student-away-at-school
- Military
- Safety features
Consider Which Companies Offer Usage-Based Insurance
Some companies offer telematics insurance programs that reward good drivers with discounts. These programs use an app, plug-in device or both to track factors such as your mileage, acceleration, cornering, braking, late-night driving and average speed.
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. Some examples of pay-per-mile programs are Allstate Milewise and Nationwide SmartMiles.
5. Buy a Car Insurance Policy
The last step in shopping for car insurance is buying 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, which could get you a discount.
Avoid a Lapse in Coverage
When switching car insurance companies, make sure your old and new policies overlap 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. A lapse in coverage of even a single day can make you riskier to car insurance companies and increase your insurance premiums.
How Much Does Car Insurance Cost?
The costs of auto insurance policies vary widely depending on the driver and company. This is why you should compare quotes when shopping for car insurance. You might find one company costs $50 less per month than another.
All rates in this section are for a 35-year-old driver who has good credit and no driving violations and is insuring a 2023 Toyota Camry.
“Selecting lower deductibles and higher coverage limits can result in more expensive premiums, as it exposes the insurer to greater potential payouts in the event of a claim.”
Average Full-Coverage Car Insurance Cost
According to data from Quadrant Information Services, 35-year-old drivers with good driving histories and good credit pay $2,433 per year or $203 per month on average for full-coverage car insurance.
| Car Insurance Company | Average Monthly Full-Coverage Rate | Average Annual Full-Coverage Rate |
|---|---|---|
| USAA* | $143 | $1,722 |
| Travelers | $161 | $1,937 |
| Geico | $162 | $1,939 |
| NJM Insurance | $162 | $1,948 |
| Erie Insurance | $169 | $2,024 |
| Auto-Owners Insurance | $180 | $2,157 |
| American Family Insurance | $183 | $2,196 |
| Nationwide | $204 | $2,447 |
| Progressive | $204 | $2,452 |
| Farm Bureau | $221 | $2,649 |
Average Minimum-Coverage Car Insurance Cost
Minimum coverage is the cheapest option for car insurance. According to our rate data, good drivers pay about $736 per year or $61 per month on average for minimum liability coverage. As with full coverage, minimum-coverage rates vary by provider significantly.
| Car Insurance Company | Average Monthly Minimum-Coverage Rate | Average Annual Minimum-Coverage Rate |
|---|---|---|
| IMT Insurance | $28 | $332 |
| West Bend Mutual | $34 | $406 |
| USAA* | $36 | $433 |
| Geico | $43 | $519 |
| Auto-Owners Insurance | $44 | $523 |
| Erie Insurance | $44 | $529 |
| Farm Bureau | $47 | $562 |
| Travelers | $57 | $684 |
| Progressive | $60 | $718 |
| State Farm | $65 | $778 |
How To Save on Car Insurance
Car insurance rates are based on a variety of factors (such as your age, driving history and location), but there are a few things you can do to find cheaper quotes. As you shop for car insurance, consider these tips:
- Avoid hard credit checks: Most states allow car insurers to use credit scores in determining rates. If possible, try to avoid anything that would bring your score down.
- Set a higher deductible: You can reduce your car insurance costs by raising your deductible. Be sure you can afford to pay the deductible if you get into an accident, though.
- Lower your coverage limits: If you can get by with less coverage, you can save money on car insurance. You could also get minimum coverage if you own your car outright, but you’d be financially liable for repairing it if you’re at fault.
- Bundle policies: Most companies offer discounts for bundling more than one vehicle or type of policy together, such as auto with renters or homeowners insurance.
- Compare providers: You may find one company charges hundreds less than another. You won’t know you have the cheapest car insurance until you compare more than one provider.
- Shop often: To be sure you have the best option, shop for car insurance each time your policy is up for renewal. You can also switch providers at any time, even if your policy term isn’t about to end.
FAQ: How To Shop for Car Insurance
When shopping for car insurance, make sure you have your personal information, vehicle details and current insurance information ready. Then, decide what level of coverage you need. After that, figure out how you want to get a quote (such as from an agent or online) and compare quotes from providers. You should compare at least a few insurance companies before buying a policy.
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.
Since rates change frequently, it’s good to shop for new car insurance every time your policy is up for renewal, which could be once or twice per year. You can switch insurers at any time, so you can also shop around even if your policy isn’t expiring soon. You can always stay with your current company, but shopping around may help you find better rates or coverage.
The best car insurance depends on your needs, driver profile and vehicle information. Some of our top picks for car insurance are Travelers, USAA, Erie Insurance and Progressive.
Our Methodology:
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:
- Coverage (30% of total score): Companies that offer a variety of choices for insurance coverage are more likely to meet consumer needs.
- Cost and Discounts (25% of total score): Auto insurance rate estimates generated by Quadrant Information Services and discount opportunities are both taken into consideration.
- Industry Standing (20% of total score): Our research team considers market share, ratings from industry experts and years in business when giving this score.
- Customer Experience (15% of total score): This score is based on volume of complaints reported by the National Association of Insurance Commissioners (NAIC) and customer satisfaction ratings reported by J.D. Power. We also consider the responsiveness, friendliness and helpfulness of each insurance company’s customer service team based on our own shopper analysis.
- Availability (10% of total score): Auto insurance companies with greater state availability and few eligibility requirements score highest in this category.
Our credentials:
- 800+ hours researched
- 130+ companies reviewed
- 8,500+ consumers surveyed
Studies and Ratings We Cite
-
Our provider reviews cite several key industry studies and ratings, including:
- J.D. Power 2024 U.S. Insurance Shopping Study
- J.D. Power 2024 U.S. Auto Claims Satisfaction Study
- NAIC Complaint Index
The annual J.D. Power U.S. Insurance Shopping Study measures customer satisfaction and purchase experience with auto insurance providers based on five categories: brand, price, distribution channel, quote process and policy offerings. The study average score is 676/1,000.
The annual J.D. Power U.S. Auto Claims Study rates the claims experience customers have with different providers based on eight categories: trust, fairness of settlement, time to settle a claim, people, communication, ease of resolving a claim, ease of starting a claim and digital channels. Car insurance providers are assessed at the national level. The study average score is 697/1,000.
The National Association of Insurance Commissioners Complaint Index is a representation of the number of complaints auto insurance providers receive relative to the average number of complaints for the industry based on their size. A score of 1 represents the average number of complaints for the industry.
*Data accurate at time of publication.
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