Your car insurance premium is supposed to fit you like a glove; it’s designed to reflect who you are in order to determine what kind of driver you will be for your insurance company. But from a consumer's perspective, the real question isn’t what kind of driver are you, it’s who has the cheapest insurance? So, in order to do just that, we surveyed top insurance companies, looking at rating factors broken down below. Through our analysis, we were able to determine who actually has the cheapest car insurance, even if you have young drivers, a DUI, at-fault accidents, and other violations.
Accidents can have major impacts on your car insurance premium. By accidents, we’re only talking about collision-type claims, which insurance companies will generally characterize as "at-fault" accidents. Other violations and tickets will be discussed in its own section. Here is our comparison breakdown by at-fault accidents.
Annual Premium by At-Fault Accidents
|Company||No Accidents||Damage less than $1000||Damage greater than $2000|
As you can see, no matter what company you chose, getting into an at-fault accident will raise your rates. From the data above, Nationwide can be the cheapest company to get insurance after an accident — depending on the value of the claim. If the value of the damage you caused is greater than $2,000, Nationwide might be the cheapest insurance for you. But, if the value of the claim is less than $1,000, Farmers is cheaper. Again, all other values are kept constant.
This is the golden rule with insurance and a theme we will continue to see throughout our analysis: as your driving profile changes so does your premium and not every company will view these changes equally. Which means, any time you’ve had an accident and your rate increases, you need to shop around to see if other companies might view your accident as less costly than your current company.
Violation is a pretty broad term for saying you did something you shouldn’t have. In our analysis, we're going to be analyzing violations that tend to have major financial implications; a DUI, driving with a suspended license, a hit and run, and reckless driving. Here's how the selected companies stack up against each other with the violations added to the user profile.
Ignoring all the other implications of getting a DUI, having one on your insurance record will, on average, raise your rate $1,249 a year. While Farmers, the second cheapest company if you don't have a DUI, actually raises your rates the most after you’ve had a DUI with a $2,026 increase.
Annual Premium by DUI Conviction
|Company||None||Premium at DUI||Premium Increase|
By adding a DUI to the user profile, Nationwide's premium increased over $1300 to be the 3rd most expensive surveyed company while Liberty Mutual became the cheapest. While Liberty Mutual isn't the cheapest without a DUI, the $785 increase is the cheapest financial penalty for drinking and driving. Again, this is why it’s so important to not become complacent with your insurance company. Just because Nationwide was the cheapest insurance company when you do not have a DUI on your premium, does not mean they will stay that way after the fact.
For more information on the ins and outs of car insurance after a DUI, see here.
While the average annual increase from driving with a suspended license is about $1100, there is some considerable variance between companies. While Liberty Mutual is pretty middle of the pack in terms of no violations, they’re actually the cheapest if you’ve been ticketed for driving with a suspended license.
Annual Premium by Driving with Suspended License Conviction
|Company||None||Premium at Suspended License||Premium Increase|
Looking at the data above, if you've been convicted of driving with a suspended license, your best bet for finding cheap auto insurance might be Liberty Mutual. As we've seen with other rating factors and will continue to see, companies that were originally the cheapest without any prior claims or convictions are no longer financially prudent options.
A hit-and-run on your insurance record is a doozy. In most states, it is the most expensive violation you can receive – even greater than a DUI. So, if you’re ticketed with one of these, trying to find an insurance company that won’t bankrupt you can be tricky.
Annual Premium with Hit & Run Charge
|Company||None||Premium after Hit & Run||Premium Increase|
Liberty Mutual is probably your best bet if you’ve been involved in a hit-and-run. Compared to the other insurers, the increase you’ll receive $500 cheaper at $868 (overall annual premium $2,381). Still, the combined increase of a DUI ($783) and a license suspension ($783) is still less expensive than the increase after a hit and run. Yikes. We did warn you, right?
The definition of reckless driving can vary by state, but in general, is described as a driving without general disregard to the rules of the road and other drivers — and it comes with a pretty hefty fine. On average with the insurers we surveyed, a reckless driving charge will raise your annual premium nearly 1200 bucks.
Annual Premium with Reckless Driving Charge
|Company||None||Premium at Reckless Driving||Premium Increase|
While Nationwide is not the cheapest after a DUI or hit-and-run, it is the cheapest after a reckless driving charge. So, if you have a reckless driving charge on your record, consider Nationwide, Liberty Mutual, and State Farm in your search.
If a parent's greatest fear is their child behind the wheel, having to pay for their car insurance premium might be a close second. On average, adding a teen driver increases your annual premium by about 83%. This is because of the risk presented by teen drivers; they're less experienced drivers and more likely to take risks behind the wheel which leaves your insurance company financially vulnerable. And, like any instance of risk for insurance companies, they calm their fears by charging higher premiums. So, let's look at some premiums by our selected insurers for adding a teen to the policy of a married couple.
Married Couple with a Teen Driver
Like we've seen with other rating factors, Nationwide is the cheapest company to add a teen with Farmers behind them. Bear in mind, the data above was averaging the premium of a teen male driver and teen female driver. If you have a teen male driver, on average, you can expect to pay $239 more than adding a female driver. Again, this is because of the additional risk presented by a young male driver compared to a female driver. Still, Nationwide is the cheapest insurer for our family's profile with a female or male teen driver.
For more information regarding teen drivers and auto insurance, see our guides here
Insurance companies place a lot of weight on your credit score as they see it as a highly accurate way to determine risk. Studies by the Federal Trade Commission have shown that drivers with low credit scores not only file more claims than drivers with higher credit scores, but the actual dollar amount is greater than higher scoring drivers. Thus, they’re cheaper clients. On average, moving from one credit tier to the next among our selected insurers saves you an average of $344 a year.
Annual Premium by Credit Score
|Company||Very Poor (300-579)||Fair (580-669)||Good (670-739)||Very Good (740-799)||Great (800-850)|
If you have bad credit, you should consider Farmers and Nationwide in your search. While you as a driver may not exactly fit the rest of our profile, it's a good place to start. This is especially true considering the average of "bad credit" is more than $1300 more expensive than the "excellent" group. If you have excellent credit, Nationwide is $140 cheaper than the average for that credit group.
Across the board, the longer and with the higher limits you have insurance, the cheaper your premium will be. Using historical data, insurance companies see those with above state minimum requirements as less likely to file a claim or get into an accident. Because of the decreased risk you present, insurance companies tend to lower your rates. In essence, the longer you've been insured for, the lower your rates will be, with all other metrics kept constant.
If you're new to the world of insurance, you should start your record with higher than state minimum limits. This will not only help protect your liability but also start a good relationship with insurance companies. Looking at the information below, you can see that having 5 years with 100/300/100 liability limits can save you an average of $219 a year!
Annual Premium By Insurance History - 5 Years
|Company||None||State Minimum Limits||100/300 BI Limits||Diff from None to 100/300|
If you're looking for insurance and you either don't have an insurance background or only have a history of the state minimum, Nationwide might be the cheapest company for you.
While the majority of people use their vehicle for pleasure, using your personal auto policy for business use can bump up your premium quite a bit. This has to do with the way your insurance companies views the risk - the increased use of the vehicle as well as unpredictable exposures to risk.
Annual Premium by Vehicle Use
As we can see, if you're using your vehicle for business use, the best place to start your search for cheap car insurance is Nationwide. By business, we aren't referring to a commercial policy but when you use your vehicle both personally and with some business use. While most companies will have their own versions of these rules, it can encompass delivery drivers or salespeople.
How much you drive, or your annual mileage, is a huge rating factor in places like California but can still positively and negatively affect your premium in other states. If you live in California, you can expect a 25% gap in average annual premiums between those who drive 0-7,500 miles a year and those who drive more than 15,000 miles a year. On average, however, the less you drive, the more it saves you — but not by much.
Annual Premium by Annual Mileage
|Company||0-7,500 Miles||7,501 to 10,000 Miles||10,001 to 15,000 Miles||15,501 Miles & Above|
Car insurance companies can raise your rates for above average annual mileage because they see the more time on the road opens you (and by consequence, themselves) to additional risk. So, if you're someone who drives above 12,000 miles a year (what is considered to be the national average), your best bet for car insurance is Nationwide.
For more information on annual mileage and car insurance, see our guide to low mileage auto insurance here.
Now that we’ve looked at some of the big rating factors, we should talk about ways to save on car insurance. Unlike the data we presented above, these tips aren't company-specific.
You’re not going to save the real big buckets by adding a bundling or good driver discount to your policy, but it helps. Here are some discounts with potential discount options (if applicable):
The phrase “use it or lose it” is actually pretty contradictory in the world of insurance. For most violations and claims, your insurance company will rate (i.e., charge) you for 3 years. Meaning, you’ll be paying for at collision claim through an increased premium for quite some time.
Given this, it’s important to weigh the pros and cons before filing a claim. Namely, is the damage significant enough to warrant the increased premium you will receive? Here’s how you can tell:
Although owning a car is a major financial investment, it’s still a depreciating investment. Meaning, the same coverage you had on your 1999 Honda Accord might no longer be necessary. Namely, physical coverage like comprehensive and collision. Here’s how to tell:
If it is determined you do still need physical protection, consider raising your deductible. By raising your deductible, you lower your premium as your insurance company takes less of a financial responsibility in the event something happens to your vehicle. Consider, however, what this would mean if your vehicle is totaled.
The moral of our analysis is pretty straightfoward: the only way to find the absolute best rate for you is to shop around frequently. By frequently, we are referring to any time your driving profile changes. Whether that's because of the driving factors we listed above but also if you had a birthday, if you moved, changed vehicles, got married, or even bought a house. Because you’re not locked into a contract with your insurance company, if you find a better rate elsewhere you are able to cancel your insurance and move on to a cheaper company. Use our insurance calculator here to see which company best fits your driving profile.
Between September and December 2017, 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.