How to compare car insurance quotes

As car insurance rates continue to climb – up 18.6% in the 12-month period ended July 2024 – drivers are shopping around for better rates. In fact, according to the LexisNexis Insurance Demand Meter, 41% of insured households looked around for a better deal in 2023.

But shopping for new insurance isn’t as simple as looking at a list of companies and prices and picking the cheapest. 

When evaluating companies and quotes, you want to make sure you’re getting the best coverage at the best possible price.

In order to do that, you need to compare, among other items, the same types of coverage, the same coverage amounts and deductibles and the same discounts. 

The best way to start comparing quotes is to know what type of coverage you want, such as the state minimum or full coverage; the amount of coverage you want, such as 100/300/100 ($100,000 for bodily injury per person, $300,000 for bodily injury per incident and $100,000 for property damage per incident) or 50/100/50; and the discounts you qualify for, such as good driver discounts, low-mileage discounts and bundling discounts to name just a few.

You should also know which companies you want to work with, based on their customer service reputation, financial stability and other factors.

Once you have all that information, you can start comparing quotes – experts advise shoppers to get at least three different quotes. Be sure to review each carefully. The Insurance Information Institute, an organization that provides research and education on the insurance industry, says it’s vital that shoppers compare apples to apples when choosing their policy.

Key highlights

• It’s best to compare rates yearly or when major life changes occur, such as a marriage, divorce, moving, or adding a child to your policy.
• Experts recommend getting quotes from at least three or four insurers to compare prices. Be sure you’re using the same info for each quote in order to make an accurate comparison.
• You can get a free auto insurance quote using an online calculator, and in some cases may be able to apply for and purchase coverage within minutes.

How to compare car insurance quotes

Begin the process with a few basic steps:

• Review your current car insurance policy looking at price and coverage levels
• Gather your personal information
• Decide what coverage you want, such as collision and comprehensive, and whether you are willing to have a higher deductible.
• Conduct research on potential car insurance providers in your state and their customer satisfaction rates
• Get at least three quotes with the same coverage level and deductible
• Compare all quotes side-by-side

Be prepared to share information about your car, your driving habits and yourself, including but not limited to:

• Your automobile’s vehicle identification number (VIN)
• Its make, model, and year
• How many miles you drive annually
• Whether you use your car to commute to work
• Where you park your car (e.g. on the street vs. in a garage)
• Names and ages of all drivers who will be using your vehicle
• Whether you’ve been cited for any moving violations or been in an accident
   

What kinds of car insurance coverage do I need?

The main types of car insurance are liability insurance, collision insurance and comprehensive insurance:

• Liability coverage helps pay for the damage you do to others.
• Collision insurance covers damage to your car from a collision with another vehicle or an object.
• Comprehensive insurance covers damage to your vehicle by vandalism, theft or environmental hazards, such as hail.

You should first think about how much liability coverage you will need, keeping in mind the state minimum – the most basic car insurance – could leave you at risk. In many states, the minimum is 25/50/25. However, experts agree that isn’t sufficient for most drivers, especially those with assets that need to be financially protected. Most insurance experts advise getting coverage of 100/300/100.;

Depending on the state, you also may be required to carry additional coverage; some states require uninsured/underinsured motorist coverage, usually at a level that matches your liability limits. In no-fault states, there will also be a required limit for personal injury protection (PIP). You should consider increasing this limit if you don’t have good health insurance or a high deductible.

After liability coverage, consider adding collision and comprehensive insurance, particularly if you have a newer vehicle – and remember that if you have a loan, your lender will require this coverage. Then, consider your deductible – the amount you will pay on a claim before the insurance company reimburses you. The higher the deductible chosen, the lower your premium will be. 

But, says Ron Wadley, who owns Insurance for Texans, a full-service insurance brokerage in the Dallas-Fort Worth metro area, a higher deductible means you’ll be paying more out of pocket when you file a claim.

Finally, do a quick scan online of insurance companies to see which ones have good customer satisfaction records. If two insurance companies' quotes come up much the same, you might want to opt for the one with the better track record. There are many lists of the best insurance companies you can consult to evaluate insurers’ customer service levels.

“There are two things we always tell our clients to focus on first,” says Wadley. “The first is to make sure you have enough liability insurance to protect yourself.”

Wadley says customers may be tempted to go with only enough liability coverage to meet the state minimum requirements. But in the event of a serious accident where you are deemed to be at fault, that can be a big risk.

“That leaves you at risk for being sued and will have serious effects on your finances and any assets you might own,” he says. “In some states, they can also take action to garnish your wages.”

The second thing Wadley says you should consider is whether choosing a high deductible is wise. Taking a higher deductible, such as $2,000 versus $500 will substantially lower your rates, but will you have the finances to put your vehicle back on the road in the event of a collision?

“Too many people don’t think through what would happen if they have to pay out $2,000 before the insurance kicks in to look after repairs,” he says.

When to compare car insurance quotes

Most experts recommend comparing car insurance rates every year when your policy comes up for renewal. Of course, very few people take the time to do so.

Online tools and resources are making it easier to make such comparisons, and it’s worth the time because the savings could be significant.

Here are a few other times when it will be worth comparing car insurance, as your rates are likely to be affected:

• You move
• You buy a car
• You add or drop drivers from your policy
• You experience a significant change in your credit score
• You have an accident or multiple traffic violations within 12 months
• You add a new driver to your policy

Comparing car insurance companies quotes

Rates by company

We compared the top eight national insurance companies for average policy rates at three coverage levels – the state minimum liability coverage, liability-only coverage at 50/100/50 and a full coverage policy with liability at 100/300/100 and $500 collision and comprehensive insurance deductibles.

But, remember, you want to look at more than just price. What type of reputation does the insurer have? What type of discounts is it offering?

The rates below were collected from auto insurance comparison site CarInsurance.com and its data partner Quadrant Information Services for single, 40-year-old male and female drivers of a 2023 Honda Accord LX with a good insurance score and no violations on their record for full coverage insurance policy with liability limits of 100/300/100 and a $500 comprehensive and collision deductible.

Rates by state

It’s important to remember that car insurance companies base their rates on many factors, such as your driving history, your age, your car’s make and model, and where you live. 

Insurers all weigh these risks differently. And rates in different states – and cities within those states – can vary widely. So, when comparing rates, you want to look at the rates for where you live, down to the ZIP code.

Rates by gender

Auto insurance companies in many states charge women less than men for car insurance because female drivers statistically have fewer accidents. However, the states of California, Hawaii, Massachusetts, Michigan, North Carolina and Pennsylvania do not allow insurers to use gender as a rating factor. 

The table below looks at the national averages for men and women at different ages.

Wadley at the Insurance for Texans brokerage says if you have a young driver or a problematic driving record (see below) you might want to consider being more selective in the insurers you consider.

“Every company will assign different weights to your driving profile,” he notes. “Some companies are hard on new or young drivers and charge them higher rates, while there are others that don’t like older drivers.”

Wadley says this is one example of where an independent brokerage can help steer a client towards certain insurers.

Rates by infraction

Car insurance companies consider driving history a major factor when calculating a rate. They increase rates for drivers with accidents, tickets and other violations because they’re a higher risk.

However, not every violation affects your rates the same way. Typically, the more serious the violation, the higher your rate. A speeding ticket, for example, is not as serious as driving under the influence of alcohol or drugs and won’t affect your rates as much as a DUI conviction.

Expert tips on comparing car insurance quotes

Beyond price and ensuring you’ve got the right coverage levels, there are a few other things you may want to think about.

The Insurance Information Institute says there are optional coverages to consider:

• Medical payment coverage, which will pay for treatment of injuries to the driver and passengers of the policyholder’s car. This is required by law in some states.
• Uninsured/underinsured motorist coverage, which has your back if you or a member of your family is hit by an uninsured driver or a driver without sufficient coverage. This is required by law in some states.
• Gap insurance. When you buy or lease a new car it will lose as much as 20% of its value as soon as you drive off the lot. Gap insurance will cover the difference between what a vehicle is currently worth and the amount you owe if your car is a total loss

Mistakes to avoid when comparing car insurance quotes

Buying car insurance can seem a little daunting at times, but the process has been evolving and getting easier to do, especially online. Here are a few common mistakes to avoid.

• Not knowing how much coverage you need. Too little coverage could leave you severely exposed in the event of an accident, while too much coverage will simply mean you’re paying too much.
• Providing false information on your application. While it might help to initially lower your quoted rates, it could catch up with you down the road and result in serious consequences.
• Getting only the state-minimum coverage. It may be the cheapest way to put your vehicle on the road, but if you end up in a serious accident and you’re at fault, you could suffer the financial consequences for a long time.
• Failing to add a teen driver. Sure, it’s going to increase your rates, but if your teen causes an accident and they’re not on the policy, don’t be surprised if the insurance company refuses coverage.
• Choosing for a deductible you can’t afford. It’s a good idea if you have the savings to pay the deductible, but if you don’t, it will just be one more headache you have to deal with on top of the stress involved in being in an accident.

What else can I do to reduce my insurance rates?

Insurance companies offer a number of car insurance discounts to clients that can result in big savings. Common discounts include bundling several types of insurance with one provider, discounts for safe drivers, good student discounts and discounts for certain professions.

Here are 10 tips that can help you unlock lower rates on car insurance:

1. Shop around and compare car insurance quotes
2. Bundle your policies
3. Raise your deductible
4. Ask about discounts for teen and student drivers
5. Shop for a car that gets more favorable insurance rates
6. Improve your driving record by avoiding tickets and accidents
7. Drop coverage you don’t need
8. Buy only state-required minimum liability coverage
9. Go for pay-per-mile insurance
10. Ask about group insurance or an affinity discount

Frequently asked questions

How long does it take to compare car insurance quotes?

Provided you’ve already gathered all the necessary information – like your driver’s license, current policy, VIN, etc. – you can use a free online car insurance calculator to get quotes within minutes. Some insurers will allow you to complete the entire application and purchase process online and activate your new policy the same day. Others will connect you with a local agent who must finalize your coverage purchase. Either way, do not cancel your existing car insurance policy until after your new policy is in effect.

Which car insurance company is cheapest?

The cost of auto insurance varies widely across the U.S. and is influenced by a number of factors ranging from age to the kind of car you drive. But according to our research, Nationwide has the cheapest average annual rate for car insurance for good drivers, $1,548 per year. Travelers sample premium is just a few dollars more, $1,587 annually. And if you’re a current or retired member of the military, you could save even more with USAA, which has an average rate of $1,381.

For comparison’s sake, the average annual rate for car insurance is $1,895.

Who needs to be on my car insurance policy?

Generally speaking, any family member who lives in your household and is a licensed driver must be listed on your car insurance policy if they are going to drive your vehicle. If non-family members also drive your vehicle regularly, such as a neighbor who assists you with daily life needs, they should be included on your insurance, too. 

Methodology

Editors collected rate information from auto insurance comparison site CarInsurance.com and its data partner Quadrant Information Services for single, 40-year-old male and female drivers of a 2023 Honda Accord LX with a good insurance score and no violations on their record for full coverage insurance policy with liability limits of 100/300/100 and a $500 comprehensive and collision deductible.

In addition, we collected rates for full coverage insurance policy for single, 40-year-old male and female drivers of a 2023 Honda Accord LX with either one speeding ticket, an at-fault accident, or a DUI on their record. Lastly, we collected rate data for male and female drivers ranging in age from 16 to 75.

We analyzed more than 53 million quotes, more than 34,000 ZIP codes and 170 insurance companies nationwide.

Note: 100/300/100 means up to $100,000 for the medical bills of those you injure, up to $300,000 per accident for bodily injury liability for all persons injured in one accident, and $100,000 to repair other drivers’ cars and property that you damage.