instant auto insurance quote: All you need to know
One of the best ways to find cheap car insurance quotes is to shop around and compare coverage and rates from multiple companies.
Drivers are required to have auto insurance in almost every state. But if you find yourself with a handful of questions about car insurance, you’re not alone — and it’s wise to learn about insurance before you get quotes. Here’s everything you need to know about auto insurance quotes before you shop.
A car insurance quote is an estimate of how much you’ll pay for a policy. An insurance quote is calculated based on the information you provide, including your age, the car you drive, your driving history and where you live, among other factors.
Insurers each use their own unique formula to calculate a car insurance quote, so even if you provide the same information to Geico, Progressive or any other company, no two quotes will be the same. The more auto insurance quotes you get, the better chance you’ll have of finding the cheapest car insurance company for you.
What goes into a car insurance quote?
Several factors affect your auto insurance quote, and they differ from company to company. For instance, one insurance company might raise your rates by 10% for living in a high-crime area, while a different insurer might charge only 5% more. Both companies are looking at the amount of crime in your neighborhood, but calculate your insurance risk differently.
Factors that affect a car insurance quote include:
Personal characteristics such as your age, gender, marital status and education level typically affect an auto insurance quote because insurers can use statistics to predict how likely you are to crash. For instance, teen drivers generally have higher insurance rates because they’re more likely to get in a car accident than almost any other age group.
» MORE: Find the cheapest car insurance for teens
The coverage you choose will, not surprisingly, affect your car insurance quote. The more coverage you need, the higher the cost. NerdWallet research found that on average, “full coverage” car insurance will cost more than double what minimum coverage costs.
Full coverage car insurance refers to a combination of coverages, including higher liability limits, and collision and comprehensive insurance. Still, it’s best not to base the amount of coverage you buy strictly on price.
» MORE: How much car insurance rates go up after an accident
If you don’t drive very often, you may want to consider usage-based car insurance as a way to lower your insurance costs.
Details about your vehicle, including the make and model, and whether it has features like a GPS system or safety equipment all affect your car insurance quote. Why? Luxury vehicles and cars with expensive safety features or high-end audio cost more to repair, hiking up your rates. The likelihood of your car’s being stolen will also factor into your insurance quote.
Location plays an important part in how much your coverage costs. Population density, crime and crash rates around your neighborhood can all factor into the price of your insurance. In addition, the amount of coverage required to legally drive a car varies by state, as do average rates for similar policies.
For example, drivers with good credit and no recent accidents in Maine had the cheapest full coverage car insurance at $916 a year. Meanwhile, Louisiana was the most expensive state, with an annual rate of $2,971, according to NerdWallet’s 2020 state-by-state car insurance rate analysis.
» MORE: Find the cheapest car insurance in your state
Your credit score will likely affect the cost of your auto insurance. Insurers charge people with poor credit higher rates because they’re more likely to file claims, according to a 2007 report by the Federal Trade Commission.
If you live in California, Hawaii or Massachusetts, you’re in luck. Insurers are not legally allowed to factor in credit scores when calculating your car insurance quote.
Your car insurance history plays a key factor in determining your auto insurance quote, including:
- Whether your car insurance has lapsed. Drivers who have had an insurance lapse, even if they don’t own a car, may be classified as high-risk. Non-owner auto insurance can help customers avoid a gap in coverage.
- Insurance claims. Generally, a recent at-fault accident will raise car insurance rates 50% or more for a full coverage policy. Look for policies with accident forgiveness to help prevent a sharp increase.
- How long you’ve been at your last insurer. Many companies offer a loyalty discount. Still, some insurers will raise rates on loyal customers if they don’t think they’ll switch companies. This practice is called price optimization.
- Your previous insurance company. According to research from the Consumer Federation of America, if your last insurer was a nonstandard company that insures high-risk drivers, your new insurer may give you a higher quote.
- Questions you’ve asked an insurance agent, even if you didn’t file a claim. Raising insurance rates based only on an inquiry is banned in some states, but not all.
What information do you need to get a car insurance quote?
No matter how you decide to shop around for auto insurance quotes, make sure you have all the relevant information on hand and understand what goes into determining your final premium. That includes:
- Basic information such as your name, address, occupation and birthdate.
- Your current auto insurance company, if you have one.
- Driver’s license information for you and anyone else on the policy.
- Annual and current mileage on your car, how often you drive and why (such as for pleasure or commuting to work). Note: If you drive for a ridesharing company like Uber or Lyft, you’ll want to buy rideshare insurance or get a quote for a business auto policy.
- Vehicle information, including whether you own or lease your car, vehicle identification number and any safety features.
- Driving history for the past five years for all drivers on the policy, including tickets, accidents and other violations. Bear in mind — any company you choose will find your driving history before issuing a policy, so it’s best to be upfront to get an accurate car insurance quote.
How much coverage you need. If you already have a policy, the declarations page lists the coverages you currently have — you can use this to compare.
Choosing the right coverages for your car insurance quote
Beyond the coverage required by law, the amount of insurance you need is determined by your personal needs.
As discussed, full coverage car insurance can be expensive, and generally includes a combination of coverages including liability, collision and comprehensive insurance. You may need to purchase collision and comprehensive coverage if you have a car loan or you lease your vehicle, per your financing contract.
Full coverage might be worth the investment if:
- You own a new or expensive vehicle.
- You drive in heavy traffic as part of your daily commute.
- You can’t pay for repairs to your car if it gets wrecked or stolen.
- Your location is prone to extreme weather, animal collisions or high theft rates.
Here’s how these common types of insurance work:
Liability insurance pays out if you cause an accident and damage another person’s property or cause injuries. Most states require all drivers to have a minimum amount of liability insurance. There are two main types of liability insurance:
- Bodily injury liability covers medical expenses and lost wages for another person.
- Property damage liability pays for damage to another person’s car, property and valuables.
A “liability limit” is the maximum amount each of these coverages would pay out if you caused a wreck. Choosing higher liability limits will cause your auto insurance quote to rise, but will better protect your finances if you have a bad accident. Certain states will let you buy liability insurance with a limit for both injuries and property damage per accident.
These limits are generally shown as three numbers such as 100/300/50. In this case, your liability coverage would pay up to:
- $100,000 for injuries per person.
- $300,000 for injuries total, per accident.
- $50,000 for property damage per accident.
Collision insurance pays for damage to your own car if you hit another person or object, or if an uninsured or underinsured driver hits your car. Collision coverage also includes a deductible, which is the amount you pay out of pocket before your insurer will cover any damage.
Collision insurance won’t pay out more than your car’s cash value — after you pay the deductible amount. If you have an older car that isn’t worth much more than your deductible, you might not want to buy collision coverage.
For example, let’s say your deductible is $1,000 and your car is valued at $1,500. In that case, you will receive only a $500 check from your insurer, since the $1,000 deductible will be taken out of your car’s initial cash value. On top of that, your insurance rates may increase after filing a claim.
Comprehensive insurance pays out if your car is stolen or is damaged from almost anything except a car crash. This can include flood, fire, animals in the road or falling objects.
Although it will pay for damage to your vehicle for most reasons, comprehensive coverage doesn’t pay for injuries or damage you cause to someone else. It also won’t pay for damage to your vehicle from another car. As with collision insurance, you may not want to pay for comprehensive coverage if your car is older and not worth more than your deductible, or close to it.
Collision vs. comprehensive insurance
|Collision insurance pays for:||Comprehensive insurance pays for:|
||The value of your car if it’s stolen and not recovered, and damage from:
Other types of car insurance coverage
Most insurers offer additional coverages beyond these types, such as:
- Gap insurance, or guaranteed asset protection, pays the difference between how much you owe on your car lease or loan and the value of your car if it’s stolen or totaled in a crash. Typically you must have comprehensive and collision coverage to purchase gap insurance.
- Rental car reimbursement coverage pays for the cost of a rental car when you can’t use your vehicle because of a covered claim.
- Roadside assistance can come in handy if your car breaks down. It generally includes assistance if you have a flat tire or dead battery, lose your key, run out of gas or need your car towed. However, you can purchase roadside assistance from a variety of sources including your cell phone carrier — and using your insurer’s service would likely count as a claim against your policy, which could cause your rates to increase after a simple flat tire.
- Uninsured and underinsured motorist coverage pays out if another person causes an accident and doesn’t have any insurance or enough coverage to pay for your injuries. In many states, uninsured alone or both of these coverages are required.
How to get car insurance quotes
There are several ways you can get auto insurance quotes. You can buy directly online or over the phone, from a “captive agent” (who works for only one company), or from an independent agent or insurance broker.
First, some pro tips. Whichever option you choose, make sure you:
- Look into car insurance companies’ complaint records and customer satisfaction. Auto insurance reviews are a good place to start.
- Get at least three car insurance quotes so you can evaluate whether you’re getting a good price for the coverage you want.
- Understand coverage limits. When comparing quotes, check that each policy has comparable liability limits and deductibles.
Car insurance quotes online or over the phone
Getting an auto insurance quote online is one of the easiest ways to shop for car insurance. Most companies offer free online auto insurance quotes, including State Farm and Allstate, which let you start online but assign you a captive agent to finalize your quote on the phone. Purchasing a policy online (or over the phone) is referred to as buying car insurance “direct” from the insurer.
Buying insurance directly without the help of an agent gives you more freedom to adjust coverages and see quotes for yourself, but there are also drawbacks.
PROS AND CONS OF ONLINE CAR INSURANCE QUOTES
|Convenient, low-pressure experience||Online car insurance quotes may not be as close to your final price as quotes from an agent|
|Can compare quotes from several insurance companies in one session||Websites often provide less information than an agent, who can answer questions face-to-face|
|Ability to adjust policy details to see different prices||May receive follow-up calls and emails|
Captive insurance agents
You could also get a car insurance quote through a captive agent. A captive agent works for one specific insurance company, such as Allstate, Farmers Insurance or State Farm.
Any agent’s job is to help figure out what policy is best for you and provide a car insurance quote. In return, he or she earns a commission — or percentage of your premium — when you buy a policy. Unlike other agents, a captive agent may or may not also receive a salary from the company they work for.
PROS AND CONS OF CAPTIVE INSURANCE AGENTS
|Agents can talk through policy options and help determine what coverage you need||Satisfaction is often lower with captive agents than shopping through independent agents or online|
|Can develop a personal relationship with an agent who knows your family’s needs||Options are limited to what one specific company offers|
|Can help with complex needs, like multiple cars or several types of policies||Agents may be motivated to upsell to receive a larger commission|
Independent insurance agents and brokers
If you want to talk through your car insurance options, but don’t want to limit yourself to one company, getting a quote from an independent agent or broker might be a good choice.
Independent agents and brokers work with multiple insurers and can offer a wide range of options and policies. Big-name insurance companies such as Travelers and Progressive (as well as smaller companies) sell policies through independent agents. Because independent agents work on commission, they may strive to provide you the best customer service possible or, alternatively, steer you toward more expensive policies.
Independent brokers differ from independent agents in that they charge a broker’s fee and must disclose commission rates to customers. This transparency allows you to know exactly how much the broker is making from your business.
PROS AND CONS OF INDEPENDENT AGENTS AND BROKERS
|Can explain how policies compare between multiple companies||May not offer you the cheapest policy options|
|You can get personalized advice but still see options from various insurers||Not able to quote policies from insurers who only use captive agents|
|Brokers charge a fee; independent agents and brokers both work on commission|
Drivers who have had DUIs, speeding tickets or multiple accidents may need to find a nonstandard insurance company that specializes in policies for high-risk drivers. Many local and national agencies exist just to serve this customer base. For drivers who have a hard time getting coverage, these agencies can find car insurance quotes from companies willing to cover them.
How much should my car insurance be?
Because car insurance quotes can vary widely from person to person depending on your car, location and driving record, among other factors, we can’t predict the exact auto insurance quote you’ll receive, but our analyses determined these averages.
National average car insurance rates for minimum required coverage are:
- $606 per year for a 40-year-old with good credit and a clean driving record.
- $682 per year for a 25-year-old with good credit and a clean driving record.
Full coverage can cost more than double the price of minimum coverage insurance. Rates shown for full coverage include liability coverage, uninsured motorist protection, comprehensive and collision insurance.
Here are national average car insurance rates for full coverage.
- $1,427 per year for a 40-year-old with good credit and a clean record.
- $1,663 per year for a 25-year-old with good credit and a clean record.
- $3,906 per year for a 50-year-old married couple plus a teen driver, with two cars.
How to get the cheapest car insurance quote possible
Regularly shopping around for car insurance quotes is the only way to find the best policy and cheapest auto insurance for you. Even if you have a clean record and are happy with your insurance company, you might find a better deal elsewhere.
Still, your current insurance company may end up being your cheapest option. The only way to know is by comparing car insurance quotes.
Besides shopping around (at least once a year), you can try these other strategies to keep your premium down:
- Work on your credit. Another reason to pay your bills on time? Our 2020 car insurance rates analysis found that drivers with poor credit and a good driving record pay almost as much for car insurance as a driver with a DUI.
- Shop for insurance before buying a car. Insurers will charge you more (or less) depending on the type of car you drive. A recent NerdWallet study found that the cheapest cars to insure include the Subaru Outback, Jeep Wrangler and Honda CR-V.
- Drive cautiously. Car insurance is almost always expensive for drivers with a history of car accidents, speeding tickets, DUIs or other violations in the past three to five years.
- Look for discounts. You can save on your car insurance if you own a home, take a driver’s safety course or belong to certain organizations.
- Raise your deductibles. Opting to pay more out of pocket if you file a collision or comprehensive claim will help reduce your monthly premium.9
Car insurance quotes frequently asked questions
What is the average car insurance quote?
According to NerdWallet’s 2020 rate analysis, the national average cost of car insurance is $1,427 per year for good drivers with good credit. However, any auto insurance quotes you’ll get will be much more specific to you.
How do I get free car insurance quotes?
Most insurance companies offer free car insurance quotes through their website, on the phone or in person with an agent. You can also use an online car insurance comparison tool to see rates from multiple companies at once.
Does getting a car insurance quote affect credit?
Shopping around for car insurance quotes will not affect your credit score. Having a low credit score will generally increase your car insurance quote in all states except California, Hawaii and Massachusetts.
Can you get an auto insurance quote before buying a car?
You can — and should — get a car insurance quote before purchasing a vehicle. Auto insurance is an important aspect to consider when figuring out how much to budget for a new or used car, and prices can vary more than $200 per year, on average, even between a base model and a turbocharged upgrade.
Why are my car insurance quotes so high?
If you have a history of car accidents, speeding tickets or DUIs, your auto insurance quote will be higher than for a driver with a clean record. Similarly, if you own a luxury vehicle, live in a high-crime area or have poor credit, your car insurance quotes might be higher than average.
What insurance companies provide the cheapest quotes?
Where you find cheap car insurance quotes will differ from person to person based on your driving history, personal characteristics and other factors. NerdWallet’s 2020 auto insurance analysis of the best cheap car insurance companies found that among the largest insurers, Geico had the cheapest car insurance quotes with an average of $1,198 a year. State Farm and Progressive offered the next-cheapest auto insurance rates, respectively.
While USAA had the cheapest auto insurance quotes overall, it was not ranked because the company offers insurance only to active military members, veterans and their families.
INSURANCE RATES METHODOLOGY
For each of the seven largest insurers, NerdWallet averaged rates for 40-year-old men and women for all ZIP codes in any of the 50 states and Washington, D.C., in which the insurer was one of the largest insurance companies (by premiums written). “Good drivers” had no moving violations on record and an insurance credit score considered “good” by each insurer; a “good driving” discount was included for this profile. Sample drivers had the following coverage limits:
- $100,000 bodily injury liability coverage per person.
- $300,000 bodily injury liability coverage per crash.
- $50,000 property damage liability coverage per crash.
- $100,000 uninsured motorist bodily injury coverage per person.
- $300,000 uninsured motorist bodily injury coverage per crash.
- Collision coverage with $1,000 deductible.
- Comprehensive coverage with $1,000 deductible.
In states where required, minimum additional coverages were added; for minimum coverage prices, only state-mandated coverages were included. Couples in our analyses were 50-year-old men and women with clean driving histories, averaged across all ZIP codes with the same policy outlined above. To see rates for families with a teenage driver, we added an 18-year-old who was licensed two years ago, averaging rates for male and female teens. For couples and families, we added a 2016 Nissan Rogue S to create a two-car household.
We used a 2016 Toyota Camry LE in all cases and assumed 12,000 annual miles driven. In all cases, a paperless discount, e-signature discount and electronic funds transfer discount were automatically applied. These are sample rates generated through Quadrant Information Services. Your own rates will be different.