Best car insurance companies for good credit
Having a good credit score can lead to cheaper car insurance rates. Credit score is a major rating factor used by car insurance companies to set potential customers' rates in determining your car insurance rate.
In fact, the difference between car insurance rates paid by those with excellent credit and those with very poor credit is more than $1,500 per year.
Read on to learn more about how to find the best affordable auto insurance if you have good credit.
What are the cheapest car insurance companies for drivers with good credit scores?
As part of our wide-ranging study of the U.S. auto insurance landscape, The Zebra analyzed insurance rates across common credit tiers, ranging from very poor to exceptional. Find below details on the rates popular insurance companies charge drivers with good credit scores.
Within “good” credit tiers, rate differences exist between some of America's best insurance companies. USAA offers the cheapest insurance rates for drivers with good credit, followed by Nationwide and State Farm.
Dynamic auto insurance data methodology
Methodology: The auto insurance rates displayed above and throughout this page are dynamic, meaning the data will refresh when the most recent information is made available. Rates are based on a sample driver profile — a 30-year-old single male driver with a Honda Accord and full coverage. This profile was adjusted based on common pricing factors used by major car insurance companies, like age, coverage level, driving record and others.
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.
Learn more about how credit scores impact car insurance rates in this short video:
How to save on car insurance if you have 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 your 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:
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.
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.
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:
- Get an estimate for the repair damages at a local repair shop.
- 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 three years, as that’s how long your insurance company would charge you.
- 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.
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.
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. Plus, some states have gone away with the use of checking credit as a raing factor. These states include Hawaii, Massachusetts, Pennsylvania, North Carolina, California, and Montana.
Weigh your options and get the best value from your next insurance policy.
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About The Zebra
The Zebra is not an insurance company. We publish data-backed, expert-reviewed resources to help consumers make more informed insurance decisions.
- The Zebra’s insurance content is written and reviewed for accuracy by licensed insurance agents.
- The Zebra’s insurance content is not subject to review or alteration by insurance companies or partners.
- The Zebra’s editorial team operates independently of the company’s partnerships and commercialization interests, publishing unbiased information for consumer benefit.
- The auto insurance rates published on The Zebra’s pages are based on a comprehensive analysis of car insurance pricing data, evaluating more than 83 million insurance rates from across the United States.