Haris Ashley
The cost of insurance can vary depending on several factors, including age, location, and driving history. Generally, liability-only insurance is the cheapest option, but it may not offer sufficient coverage in the event of a serious accident. USAA, a company that provides insurance exclusively to military members, veterans, and their families, consistently ranks as one of the most affordable options. Other inexpensive alternatives include Erie, Nationwide, Auto-Owners, Geico, State Farm, and Travelers.
| Characteristics | Values |
|---|---|
| Type of Insurance | Car insurance |
| Cheapest Insurance Company | USAA |
| Runner-up Insurance Company | Erie |
| Average Annual Cost | $2,068 |
| Cheapest Full Coverage Insurance | Travelers |
| Cheapest Liability-Only Insurance | Farm Bureau |
| Cheapest for DUI | Progressive |
| Cheapest for Young Adults | Erie |
| Cheapest for Teens | Farm Bureau |
| Cheapest for Veterans, Military Members, and Their Families | USAA |
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What You'll Learn
Cheapest car insurance companies
The cheapest car insurance companies depend on a variety of factors, such as age, location, and driving history. For instance, a 20-year-old driver would pay $81 for coverage, whereas a 35-year-old driver would pay $41 for the same coverage. Similarly, the average car insurance rate for minimum coverage is $86 per month in Georgia, but drivers in Idaho pay $33 per month for the same coverage.
USAA, which caters exclusively to the US military community, offers some of the lowest rates across many categories. Their average annual rate is $1,335, which is 35% below the national average. They also have the lowest rates for motorists with clean driving records, and for those with a single speeding violation or accident on their record.
Erie has the second-lowest rates for motorists with clean driving records, about 30% below the national average. They also have the lowest rates for young adults between 18 and 25 years old, drivers with speeding tickets, and parents adding a teen driver to their policy.
Other companies with sample rates far below the national average include Nationwide, Auto-Owners, and Geico. According to NerdWallet's 2025 analysis, the cheapest car insurance companies include GEICO, Progressive, State Farm, and Travelers.
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Discounts for safe driving
Car insurance is mandatory in almost every state in the US, and it can be expensive. The average cost of car insurance is $2,068 annually, and this is up from $1,459 a year ago. The cost of car insurance is influenced by many factors, such as age, location, and driving history.
Safe driving discounts are a great way to save on insurance premiums. Many insurers offer these discounts, which can be as high as 40% off. These discounts are usually based on telematics programs, also known as usage-based insurance (UBI). These programs record and evaluate driving habits, such as speed and braking, through a smartphone app or a plug-in device. While these programs can lead to significant savings, it's important to note that some companies may raise premiums if the results show unsafe driving. Additionally, privacy concerns have been raised about the collection and use of driving data.
Some specific examples of safe driving discounts include:
- State Farm's Drive Safe & Save program offers a discount of up to 30% based on driving behaviour. The discount is calculated using data collected through the State Farm app, which provides feedback on safe driving practices.
- GEICO offers defensive driving discounts of up to 10% in Arizona and 12% in Minnesota for completing an approved defensive driving course. The discount is applied automatically after successful completion of the course.
- Allstate offers up to a 25% discount with its Drivewise program.
- American Family offers up to a 20% discount with DriveMyWay.
- Farmers offers up to a 35% discount with Signal.
- Progressive customers who earn a discount with Snapshot save an average of $231 a year.
- USAA offers up to a 30% discount with SafePilot.
It's important to note that eligibility for safe driving discounts may vary by state and insurer, and certain criteria must be met to qualify. For example, some insurers require that the course be completed voluntarily and that the driver has not been involved in an at-fault accident or convicted of a traffic violation.
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Liability-only insurance
Liability insurance is a requirement in most states for driving a car, motorcycle, or RV. However, a few states, like New Hampshire and Virginia, waive this requirement if you can provide alternative proof of financial responsibility. While liability insurance is typically included in vehicle and property insurance policies, it can also be purchased separately. When selecting a liability insurance policy, it is recommended to choose a limit that matches or exceeds your total net worth to ensure your assets are adequately protected.
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Insurance for young drivers
While my search did not explicitly yield results for the cheapest kind of insurance, I found that car insurance is relatively inexpensive for older drivers. Younger drivers, on the other hand, tend to pay more for insurance. This is because insurers consider them riskier to insure due to their lack of experience.
- Compare quotes from multiple insurers. Shopping around for insurance is a vital step in finding the cheapest option.
- Add an older, more experienced driver to the policy. Adding a parent to a young person's policy, for example, can help bring the cost of insurance down. However, the named driver should not be the primary user of the vehicle.
- Choose a car that is cheap to insure. Cars with smaller engines tend to be cheaper to insure. Older cars may also be cheaper to insure, as they are less powerful and are often driven by older, more experienced drivers.
- Keep the mileage low. Insurance costs can increase significantly above a certain mileage threshold, typically around 8,000 miles.
- Avoid cars that are commonly driven by young people. Cars like the Ford Ka, Corsa, Fiesta, Polo, and Ka tend to be more expensive to insure because they are popular choices for young drivers.
- Choose a higher excess. Agreeing to pay a higher excess in the event of a claim can lower your premiums. Just make sure you can cover the excess if you need to make a claim.
- Build up your no-claims discount (NCD). If you don't make any claims, you can receive a discount of up to 30% on your premium.
- Improve your driving behaviour. Safe driving can help you avoid penalty points and improve your rating on apps that track your driving behaviour, such as Aviva's Quotemehappy Connect.
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Insurance for military members
When it comes to insurance for military members, USAA is consistently mentioned as one of the cheapest options. USAA provides its insurance products exclusively to US military personnel, veterans, and their families. They offer some of the lowest rates for various categories of drivers, including those with clean driving records, a single speeding violation, or an accident on their record. USAA also provides good coverage options, such as new car replacement, accident forgiveness, and rideshare insurance.
Another company that offers affordable insurance for military members is GEICO. They provide special military auto insurance rates and various discounts, including a Military Discount of up to 15% on car insurance, an Emergency Deployment Discount for members deployed in support of declared US military emergency deployments, and a Membership Discount with the Navy League of the United States. GEICO also offers career opportunities for those transitioning out of the military.
Erie Insurance is also mentioned as a relatively affordable option for military members, especially for young adults aged 18 to 25 who are buying their own policies. They offer fantastic rates for drivers with speeding tickets, parents adding a teen driver, and those buying full coverage insurance with higher liability limits.
While these companies offer competitive rates, it's important to remember that insurance costs can vary based on factors such as age, location, driving history, and credit score. It's always a good idea to compare quotes from multiple companies to find the best rates and coverage for your specific needs.
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Frequently asked questions
The cheapest type of car insurance is a liability-only policy, also known as minimum-coverage car insurance. This type of insurance covers injuries or damage caused to another car, driver, or passenger. However, it often doesn't provide sufficient coverage in the event of a serious accident and does not protect your car.
Some of the cheapest car insurance companies include USAA, Erie, Nationwide, GEICO, State Farm, and Travelers. It's worth noting that USAA insurance is only available to military members, veterans, and their families.
The cost of car insurance is influenced by various factors, including age, location, driving history, and credit score. Generally, older drivers with good credit scores and clean driving records enjoy cheaper rates. Additionally, location plays a significant role, with rates varying across different states.
