The average American pays $1,700/year for auto insurance, but rates vary by hundreds of dollars between companies. This guide helps you find the best coverage at the lowest price.
Top Picks 2025
- Best Overall: GEICO (best rates, easy online)
- Best Customer Service: State Farm (local agents)
- Best for Bundling: Allstate (home + auto)
- Best for Safe Drivers: Progressive (Snapshot program)
- Best for Military: USAA (members only)
Best Auto Insurance Companies 2025
| Company | Avg Annual Rate | Best For | Rating |
|---|
| GEICO | $1,350 | Low rates, online | ★★★★★ |
| State Farm | $1,450 | Local agents, claims | ★★★★★ |
| Progressive | $1,500 | Safe driver discounts | ★★★★☆ |
| Allstate | $1,600 | Bundling, perks | ★★★★☆ |
| USAA | $1,200 | Military families | ★★★★★ |
| Liberty Mutual | $1,550 | Customization | ★★★★☆ |
Understanding Auto Insurance Coverage
Required Coverage
- Liability (Bodily Injury): Pays for others' injuries you cause
- Liability (Property Damage): Pays for others' property you damage
- Minimum varies by state: Usually 25/50/25 or higher required
Recommended Coverage
- Collision: Covers your car in accidents
- Comprehensive: Covers theft, weather, animals, vandalism
- Uninsured Motorist: Covers you if hit by uninsured driver
- Medical Payments: Covers medical costs regardless of fault
How to Save on Auto Insurance
Money-Saving Strategies
- Compare quotes: Get 5+ quotes (rates vary by 50%+)
- Bundle policies: Home + auto = 10-25% off
- Raise deductible: $500→$1,000 saves 15-30%
- Good driver discount: 3-5 years clean = 10-25% off
- Pay in full: Avoid monthly fees ($5-10/month)
- Good credit: Higher score = lower rates
- Low mileage discount: Drive less, pay less
- Telematics programs: Safe driving = up to 30% off
Factors That Affect Your Rate
| Factor | Impact | What You Can Do |
|---|
| Driving record | High | Drive safely, take defensive driving |
| Credit score | High | Improve credit |
| Age | High | Nothing (decreases with age) |
| Location | Medium | Consider when moving |
| Vehicle type | Medium | Choose safer, cheaper-to-insure cars |
| Coverage level | High | Adjust deductibles |
| Mileage | Medium | Report accurate mileage |
How Much Coverage Do You Need?
Recommended Minimums
- Liability: 100/300/100 ($100K per person, $300K per accident, $100K property)
- Collision: Required if financing, optional otherwise
- Comprehensive: Worth it for cars valued over $5,000
- Uninsured Motorist: Match your liability limits
- Deductible: $500-1,000 (higher = lower premium)
When to Drop Coverage
- Collision/Comprehensive: When car value drops below $4,000-5,000
- Rule of thumb: If premium > 10% of car value, consider dropping
- Rental reimbursement: If you have a second car
- Roadside assistance: If covered by AAA or credit card
Best Discounts to Ask For
- Multi-policy bundle: 10-25% off
- Good driver: 10-25% off
- Good student: 8-15% off
- Defensive driving course: 5-10% off
- Pay in full: 5-10% off
- Paperless/autopay: 3-5% off
- Safety features: 5-15% off (airbags, anti-theft)
- Low mileage: 5-15% off
- Loyalty: 5-10% off after 3-5 years
How to Compare Quotes
- Gather information: VIN, driver's licenses, current policy
- Get quotes from 5+ companies: Direct and through agents
- Compare same coverage: Apples to apples comparison
- Check financial strength: AM Best ratings
- Read reviews: Claims satisfaction matters
- Ask about discounts: May not be automatically applied
Common Auto Insurance Mistakes
- Only buying minimum coverage: May not be enough
- Not shopping around: Missing savings of hundreds
- Letting policy auto-renew: Rates often increase
- Wrong coverage on older cars: Paying for coverage you don't need
- Not reporting accurate mileage: Could save money
- Missing discount opportunities: Ask about all available
Filing a Claim
Claim Process Tips
- Document everything (photos, police report)
- Report promptly (most require within 24-72 hours)
- Get repair estimates before work begins
- Consider if claim is worth the rate increase
- Small claims ($500-1,000) may not be worth filing