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Most states mandate that you carry a minimum amount of auto insurance coverage. Unfortunately, they don't offer any guidelines on how much you should spend for that coverage, and rates can vary tremendously among insurance providers, with everything from your car's age to your credit history impacting the premiums you pay. While you don't want to skimp, you don't want to spend a fortune either. Is there such a thing as cheap car insurance that provides adequate protection?
Yes, there is. And, luckily for you, we did our homework on the cheapest car insurance options out there. In compiling the data, we considered all the major components that influence car insurance rates, including driving records, credit scores, discounts, daily driving habits, and more. Based on our findings, we selected the following as the five best cheap car insurance companies currently available on a national scale.
Best Cheap Car Insurance Companies:
- Travelers Insurance: Best For Safe Drivers
- GEICO: Best Discount Offerings
- Nationwide: Best Driving Habit Discount Program
- State Farm: Best Rates for Accident History
- Liberty Mutual: Best Option for Poor Credit
Being a responsible, experienced driver with a clean driving record is one of the best ways to score cheap car insurance. Most insurance companies see safe drivers as a safe bet: A client who won't file claims. So they can offer those customers lower rates.
Travelers Insurance offers significantly lower premiums for safe drivers compared to drivers at other insurance companies. In fact, Travelers says that its safe drivers save an average of $586 on their premiums.
Coverage & Discounts
Travelers Insurance offers all the same basic types of car insurance as most other companies. Additionally, Travelers offers some coverages that help it stand out, including GAP coverage, roadside assistance, and rental car coverage. It also features a new car replacement policy: If your car is totaled within the first five years of ownership, it will provide you with the same make and model.
When it comes to discounts, Travelers offers breaks for:
- Multi-car and multi-policy
- Safe driving/clean records
- Loyalty (being a long-term customer)
- Automatic payment
- Hybrid and electric vehicles
When it comes to digital integration, Travelers Insurance is utilizing digital tools to offer the best possible experience to its customers. Through the MyTravelers® online portal or the Travelers mobile app, customers can have 24/7 access to pay their bill, view or print insurance cards, view their coverage plans and other information, or even report a claim. Travelers also offers an integrated experience with your Amazon Echo, which allows you to ask Amazon’s Alexa for information on your policy or even contact your local Travelers agent.
In addition to the amazing technology integrations, Travelers offers outstanding customer service. In fact, most reviews we read raved about customers’ satisfaction with status updates during the claim process and claim resolutions. The insurer is also fully accredited by the Better Business Bureau and maintains an A+ BBB rating.
While inexpensive premiums help, you can also save a lot of money on your car insurance by choosing an insurance company that offers a wide variety of discounts. While most people know about typical rate reductions, like multi-car and multi-policy discounts, not everyone thinks to ask about other deals.
When we recently researched the best car insurance companies, we found that GEICO offered the most discount options out of all the major carriers. In fact, GEICO offers nearly 20 unique discounts, from 25% to 40% off for using airbags to 15% off if you're insuring a car you bought new less than five years ago.
Coverage & Discounts
GEICO offers some of the most extensive car insurance policies in the industry. While they provide the basic coverages that everyone needs—liability and collision/comprehensive—they also offer such GAP coverage, mechanical breakdown insurance, rideshare coverage for Uber and Lyft drivers, and more. What’s more, GEICO offers coverages for other motor-operated items like motorcycles, ATVs, boats, and RVs.
As we mentioned, though, what really makes GEICO worthwhile to customers is the sheer number of discounts the company offers. The things you can get breaks for include:
- Anti-lock brakes
- Anti-theft systems
- New vehicles
- Good drivers
- Seat belt uses
- Educated drivers
- Federal employees
- Multi-vehicle and multi-policy
- Customer loyalty
GEICO offers an outstanding online experience, starting with its quick online quote process (it's one of the few companies that allows you to complete an entire quote and registration online). GEICO customers can manage policies and make any needed policy changes anytime from anywhere via the GEICO website. GEICO also offers a very comprehensive mobile app. In fact, their mobile app received the #1 spot on Dynatrace's rating of insurance apps.
GEICO consistently receives top ratings from both its own customers as well as industry experts. In fact, GEICO currently holds an A+ rating with the Better Business Bureau and an A++ rating (the top possible) in financial strength with AM Best. Finally, J.D. Power has consistently provided Geico with high ratings in customer satisfaction.
Many car insurance companies now offer sizeable discounts for drivers who agree to report their mileage and driving habits. Some of these programs require that you install a device directly into your car, whereas others utilize a smartphone app.
One of the most generous of these programs is Nationwide's SmartRide, which offers drivers savings that can add up to 40% of their premium costs. You even get a break for just signing up.
Coverage & Discounts
Like the other companies on our list, Nationwide offers a full range of auto liability coverages plus other vehicle-protection options. Some of the most sterling choices include accident forgiveness coverage, which protects your premium rate if you are at fault in an accident, and a total loss deductible waiver, which waves your collision or comprehensive deductibles if you total your car or someone steals it.
When it comes to discounts, Nationwide offers deals for:
- Safe driver
- Good student
- Anti-theft device
- Automatic payment
- Paperless documents
However, the most important perk we mentioned with Nationwide is the SmartRide program. Essentially, when you join it, you will receive a device that you install in your vehicle to record your driving habits: the number of miles you drive, the amount of nighttime driving, how often you do fast acceleration, hard braking, etc. Depending on these measurements, the device calculates a discount each week; after several months, a final discount rate is registered and applied when you renew your policy. You get 5% off just for enrolling in the program, and Nationwide claims, you can save up to 40% on your auto insurance.
Nationwide is trying hard to compete with GEICO when it comes to the digital experience it provides to users. In fact, Nationwide recently launched Spire, a simple, user-friendly (particularly millennial users) digital insurance platform that is from your smartphone. Spire currently only includes auto insurance, but Nationwide has future plans to include other products and services on the app.
A survey of Nationwide insurance reviews does turn up a variety of customer complaints, mostly in connection to the slow claims process. With that being said, clients mostly approve of the rates they receive from Nationwide, and the company maintains full accreditation and an A+ rating with the Better Business Bureau.
As we mentioned, drivers who have steered clear of violations or accidents with clean records receive the choicest car insurance rates. However, even people with a less-than-spotless driving record need car insurance. When comparing rates and reviews, we found that State Farm actually offered the best rates for those with accident history by at least $200 per year.
Coverage & Discounts
State Farm, like most other companies we selected, offers fairly extensive car insurance coverages and other insurance options for customers. Unlike some other car insurance companies out there, though, State Farm is a multi-faceted carrier, providing homeowners and renters insurance, life and health insurance plans, not to mention disability coverage options.
State Farm does offer a wide variety of discounts, which you can access through the State Farm website. However, one of the perks of State Farm is the company's expansive network of local insurance agents. Therefore, we recommend that you sit down and consult with a local agent to maximize your saving potential if you’re considering State Farm.
While State Farm is a bit behind the curve in terms of things you can actively do digitally—it's big on making you go through your local agent—the company did recently start a SalesForce partnership so that it could provide a better interactive online experience for its customers.
In its most recent U.S. Auto Claims Satisfaction Study, J.D. Power ranked State Farm among the top 10 insurance companies in the nation. Also, many customers love State Farm because of its great local agents who help customers receive the best rates and outstanding customer service.
Many car insurance companies offer lower rates to customers with good credit scores and credit histories, figuring these individuals are more financially responsible and reliable (i.e., they'll pay premiums on time). Thankfully, some companies keep their rates fairly constant even for those with less-than-stellar scores. In fact, Liberty Mutual is one of the cheapest car insurance options out there for those with poor credit.
Coverage & Discounts
In addition to their economical premiums, Liberty Mutual offers some unique coverage options that really help them stand out from other insurance companies: accident forgiveness, lifetime repair guarantees, and new car replacement. Additionally, this company offers a special Teachers’ Auto Insurance that includes some perks like vandalism loss protection, personal property coverage, and collision coverage that are unique for school-related incidents.
Liberty Mutual has a variety of discounts, though some of them (like being a student with a high GPA or having a hybrid car) are only available in certain states. You can visit the Liberty Mutual website to view some of the company’s current available auto discounts or contact your nearest Liberty Mutual agent.
When it comes to online services, Liberty Mutual offers one of the most comprehensive websites in the industry. A variety of excellent tutorials and other educational resources resides on the MasterThis section of the website, as do lots of calculator tools for insurance coverages. Liberty Mutual customers can also use the website to manage policies, request roadside assistance, file a claim, or even track a claim’s progress. If you are not a Liberty Mutual customer but end up with an accident with someone who is, you can also file a claim against them through the website.
While Liberty Mutual is definitely one of the top insurance providers in the nation, the company's customer satisfaction and complaint records still seem a little disproportionate to the number of customers served. In fact, the National Association of Insurance Commissioners provides Liberty Mutual's car insurance branch with a 1.18 complaint index, which is higher than the average. With that being said, most of Liberty Mutual's complaints involve delays in the claims process or unsatisfactory offers after a loss.
How Can I Find Cheap Car Insurance?
Before committing to one car insurance company, it's always a wise decision to shop around and collect multiple quotes before committing to a provider; be sure to peruse the list of available discounts with each insurance company (and be sure of what's available in your state). On your own behalf, maintain a clean driving record, and find ways to improve your credit score. Also, if the company offers different types of property insurance, consider bundling your auto and homeowners policies for additional savings.
How Much Coverage Do I Need?
When you look into car insurance, it's important to remember that different types of coverage take care of a variety of damages. When determining how much car insurance you need, you should first verify what your state's required coverages include. After that, base your decisions on which coverages and deductibles you select on the age and value of your car. While things like GAP coverage and collision/comprehensive make sense for newer vehicles, they don't always provide any real benefits to drivers with older, high-mileage cars.
The Bottom Line
When you're on a tight budget, every bit of savings helps. Luckily, there are numerous ways to save money on your car insurance, and you can easily find the cheapest car insurance provider for your needs with a little bit of homework. Whether you're a safe driver who can benefit from Travelers' rates or someone who can save up to 40% by using Nationwide's SmartRide program, do your homework and compare rates side-by-side to make sure you score the cheapest car insurance that fits your needs.
When selecting the cheapest car insurance companies to feature in this list, we evaluated every car insurance company with national availability based on several categories. These considerations included the company’s financial strength via A.M. Best, satisfaction ratings from J.D. Power’s most recent Claims Satisfaction Survey, and customer-provided reviews from the Better Business Bureau, Consumer Reports, and other unbiased, data-collecting websites. In addition, we also sifted through comparison data from multiple consumer review websites and unbiased online write-ups for each company listed.