Best Car Insurance for Good Credit

A good credit score is a great way to save on auto insurance.

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Best car insurance for good credit

 

Having a good established credit score can make life much smoother. It’s easier to get loans, apply for housing, and can even help lower your car insurance rates. Whether you know it or not, your credit score is a big rating factor in determining your car insurance rate. Between those who have bad credit and excellent credit, there’s nearly a 50% premium different which comes out to nearly $1400 a year! Even if you have good credit, finding affordable car insurance is still difficult. Let’s explore how to shop for the best car insurance with a good credit report.

Car insurance for drivers with good credit scores
  1. What are the cheapest insurance companies for good credit?
  2. Why does your credit score matter?
  3. How else can you save with good credit?
  4. Do car insurance quotes hurt my credit?
  5. Additional resources

 


 

What are the cheapest car insurance companies by credit rating?

 

In order to answer this question, we created a user profile (outlined here) and surveyed some top companies across the US looking at credit scores, ranging from good to excellent. Here are the results:

6-Month Insurance Premium by Credit Score

CompanyGood (670-739)Very Good (740-799)Great (800-850)
Allstate$2,375$2,251$2,110
GEICO$1,804$1,688$1,579
Farmers$1,879$1,723$1,579
Liberty Mutual$2,513$2,232$2,068
Nationwide$1,736$1,656$1,567
Progressive$1,646$1,452$1,271
State Farm$1,486$1,314$1,161
USAA$1,195$1,118$1,041

 

Even within the “good” credit tiers, there are rate discrepancies between popular insurance companies. USAA offers the cheapest rates for good credit across the board. But if you don't qualify for USAA, State Farm has the best rates based solely on credit score.

 


 

Why does credit score impact car insurance?

 

While your credit report may seem unrelated to car insurance, insurance companies consider bad credit an indicator of risk. Studies show drivers with “bad credit” (300-579) file more claims than do drivers with good credit. When drivers with poor credit do file claims, they result in more expensive claim payouts, costing insurance companies more money.

Like having a bad driving record or being a young driver, poor credit is considered a risk by insurance companies. Any time an insurance company senses additional risk, they raise premiums.

 


 

How to save on car insurance with good credit

 

While generally, you won't pay as much as someone with bad credit, but you’re probably paying more than you’d want for car insurance. Outside of looking at the proposed insurance companies we’ve listed, here are some ways to save on car insurance with a good credit report.

Keep that credit score up

As we’ve demonstrated, your credit standing can influence your premium. By keeping your credit score up, you’ll ensure your financial health with other institutions while keeping your car insurance premiums as low as possible.

Be smart with your coverage

Unless you have a classically cool vehicle, your car is going to depreciate in value. As a result, the auto insurance coverage you once had on your ‘99 Geo might not be necessary today. Here’s a good way to tell whether you're over-insured:

  • Do you have a loan on the vehicle?

If you have a loan on the vehicle or are leasing it, you’re required to maintain physical coverage by your loan or lease agreement.

  • If the vehicle is owned, what’s the value of the vehicle compared to its premium?

You can determine the value of your vehicle by using your vehicle's information coupled with Kelley Blue Book or NADA. Next, speak with an insurance agent at your company and ask how much premium your physical coverage (so, comprehensive and collision) costs.

If the value of the premium (plus your deductible, as you would have to also pay your deductible in the event of a claim) is greater than the value of the vehicle, you might not need this coverage. This is because you’re paying more to insure the vehicle than it’s actually worth.

If you own your vehicle, but it’s still relatively new or you plan to resell it in the future in order to get another vehicle, you probably want to maintain physical coverage in order to protect your investment.

  • If it’s determined you need to keep physical coverage but you’re still looking to save, consider raising your deductible.

Your premium and deductible are inversely related — meaning if you raise your deductible, you lower your premium. Be aware, however, by raising your premium you take on greater financial responsibility in the event of a claim — which brings us to our third cost-cutting solution: be smart with your claims.

Learn more about how much car insurance you need.

Be smart with your claims

Being smart with your claims means don’t file a claim if you can help it. “If you can help it” is a short and sweet way to say if the dollar value of premium increase plus your deductible is greater than the out-of-pocket expense of repairing the vehicle, don’t file a claim.* Here’s how to tell:

  1. Get an estimate for the repair damages at a local repair shop.
  2. Use our State of Insurance Report to see how much an at-fault accident would raise your premium for your state. Consider that amount of increase over a period of 3 years, as that’s how long your insurance company would charge you.
  3. Compare the value of the premium increase plus your deductible to the out-of-pocket repairs in step 1. If it’s cheaper to file a claim, file a claim.

We understand the point of insurance is to protect your car and keep it looking new. But you need to consider the premium ramifications for filing any at-fault claims. In many instances, it’s in your best financial interest to pay for claims out-of-pocket rather than going through your insurance company.

Bear in mind, however, we are referring to collision claims. Comprehensive claims, damage caused by animals, theft, or weather-related events, for example, are unlikely to raise your rate as much or at all. Moreover, not-at-fault accidents shouldn’t affect your rate.

*Please note: If you’re involved in an at-fault accident with another person and they do not want to settle matters out-of-pocket, you are probably out of options as you're required to exchange insurance information.

Learn more about when to file a claim.

Follow our lead

In order to see which company was the cheapest for “good” credit, we surveyed some top insurance companies. While our profile probably doesn’t fit you, you should still consider our model as one to follow. Only by looking at as many companies as possible can you determine if you could be getting a better rate elsewhere. Do that here with us.

 



How do car insurance companies check your credit?

Insurance companies verify your credit with a soft credit check, as opposed to a hard inquiry that would potentially hurt your credit score. Soft credit inquiries do not affect your credit, so rest assured, you can shop for auto insurance quotes to your heart's content without worry. 

 


 

Additional resources

 

Learn more about ways to save on car insurance:

 

Compare insurance rates from top companies!

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Methodology and data sources

The Zebra conducted comprehensive auto insurance pricing analysis using its proprietary quote engine, comprising data from insurance rating platforms and public rate filings. The Zebra examined nearly 53 million rates to explore trends for specific auto insurance rating factors across all United States zip codes, averaged by state, including Washington, DC.

Analysis used a consistent base profile for the insured driver: a 30-year-old single male driving a 2013 Honda Accord EX with a good driving history and coverage limits of $50,000 bodily injury liability per person/$100,000 bodily injury liability per accident/$50,000 property damage liability per accident with a $500 deductible for comprehensive and collision. For coverage level data, optional coverage (that must be rejected in writing) is included where applicable, including uninsured motorist coverage and personal injury protection.

National property and casualty losses information is from the Insurance Information Institute and the NOAA National Centers for Environmental Information U.S. Billion-Dollar Weather and Climate Disasters report.

For vehicle make and model data, analysis referenced the most popular vehicles in the U.S. by 2016 year-end sales according to Goodcarbadcar.net’s automakers’ data.

Finally, some rate data may vary slightly throughout report based on rounding.