Understanding Car Insurance Quotes

If you drive a car in the United States, you need car insurance. Car insurance protects you, your vehicle and others in case of a collision. Without proper coverage, you could face huge medical and automotive repair bills after an accident. Every state has its own guidelines for the minimum amount of insurance each driver must carry—but that might not be enough to give you the full protection that you need. With so many insurance carriers in the country, it can seem difficult to find the right car insurance quotes that fit your budget.

Don’t just settle on the lowest car insurance quote or on the first offer you receive. In order to find the most coverage at an affordable price, you should compare rates from different providers. Shopping around can save you hundreds of dollars per year. When you begin your car insurance research, consider how these factors can impact your pricing and use these tips to find the best car insurance companies.

How to collect car insurance rates

It’s possible to find quality insurance that’s inexpensive, but it takes some shopping around. Take time to pull quotes from multiple insurers for the coverage you need. While there might be some variation in the specific information required, most insurance companies will request the following information that will directly impact your auto insurance quotes. Companies consider a blend of your driving history, what type of car you want to insure, where you live and even your gender to create a rate specifically for you. As highlighted from Allstate, you will need to supply the following details before you can receive an accurate quote.

  • Driving record
  • Location where car will be parked
  • Driver information: age, gender, occupation, driver’s license and state of issuance
  • Credit score
  • Vehicle information: make, model, age and VIN
  • Coverages needed
  • Deductible

Factors that determine car insurance rates

Car insurance companies will readily give you a quote, often on their website, but it’s rarely clear what factors they use to determine your specific rate. Quotes can range by hundreds of dollars from one company to the next.

Two main factors that determine your insurance rate are your driving record and the make and model of your vehicle. But there are plenty of other considerations that go into the final calculation.

While carriers weigh the factors that determine the quotes they provide in different ways, these are some of the elements that generally have the most influence, according to the Insurance Information Institute:

Driving record

Individuals who have driving records with fewer accidents and traffic violations get lower premiums. If you cause an at-fault accident, you’ll likely see your premiums increase significantly. According to The Zebra, here are a few examples of how much your premium could increase.

Company No collision six-month premium Six-month premium after collision 
Allstate $993 $1,425
Farmers $781 $1,010
Geico $602 $934
Liberty Mutual $769 $1,181
Nationwide $667 $859
Progressive $777 $1,343
State Farm $665 $802
USAA $458 $607


Where you live plays a large part in the rate you receive. Those who often drive in urban areas pay higher rates than those in rural areas. And whether you park your car on the street or in a garage plays a big part as well. Parking where your car is more protected may help lower premiums.

Miles driven

The more you use your vehicle, the more you’ll likely pay. Driving fewer miles may lower insurance expenses.


Younger drivers, especially teenagers, tend to pay more.

Credit score

Insurers use your credit score to determine how likely you are to file a claim. The less likely you are to make a claim, the lower your insurance premium. The Zebra following notes the difference between fair and very good credit six-month premium rates.

Company Fair credit Very good credit
Allstate $1,086 $894
Farmers $825 $709
Geico $744 $625
Liberty Mutual $1,042 $767
Nationwide $726 $627
Progressive $988 $697
State Farm $831 $596
USAA $591 $455


Some cars can be more costly to insure than others. The cost of your car, cost of repairs, safety record, engine size and how likely it is to get stolen all factor in to the final cost.

Coverages needed

Nearly every state requires drivers to carry basic auto insurance, but you may need more than just the bare-bones coverage. Liability insurance covers damage to someone else or their property in a collision you cause while bodily injury insurance only covers for injury or death to another person. You can upgrade to add personal injury protection (PIP) insurance, which covers any harm to your health in a collision. While comprehensive insurance covers damages to your car caused by a collision or the weather or car theft, full coverage insurance includes comprehensive, liability and bodily protection. The more coverage you need, the higher your car insurance premium will be.

Deductible size

Raising your deductible can lower your insurance costs. By increasing your deductible from $200 to $500, you could lower that part of your insurance costs by 15 to 30 percent.


Women typically get better auto insurance quotes than men. That’s because they statistically get in fewer accidents, especially fewer serious accidents, than men.

How to compare car insurance companies and their rates

When shopping for car insurance, it’s important to understand that the cheapest car insurance quote isn’t always the best deal. Look for reputable companies that provide great service instead of opting for the company with the lowest price.

The Insurance Information Institute suggests getting at least three quotes from different insurance companies. That includes larger insurers, small local carriers and online carriers.

After getting several auto insurance quotes, carefully research each company for reputation, service and financial strength. Here are some things to look for when searching for the best car insurance companies:

  • Price: Because car insurance rates can vary greatly by lender, it’s important to look for a carrier that provides a quote within your price range. Some state insurance departments publish guides that detail what carriers charge in your area, which is a good starting point.
  • Discounts: Some insurance companies offer special discounts on car insurance rates if you already have another insurance policy through the same company. Many companies also offer military discounts or good driver discounts. These special deductions could save you hundreds of dollars each year.
  • License: Confirm that the car insurance company is licensed in your state before purchasing a policy. Your state insurance department can help you determine which companies are licensed to sell policies to you.
  • Financial stability: It’s important to pick an insurance company with solid finances to make sure it has the ability to pay out its legitimate claims. You can look up ratings for the financial strength of insurers from rating companies including Standard & Poor’s, A.M. Best, Fitch, Kroll Bond Rating Agency, and Moody’s.
  • Customer service: After an accident or theft, you want some great customer service. Read customers reviews and check customer satisfaction ratings from companies like the Better Business Bureau (BBB) and J.D. Power to assess a company’s customer service.

Remember that the right carrier is the one that offers the best coverage at car insurance rates that are affordable for you.

Car insurance rates by company

According to The Zebra, these are some of the average 6-month premiums you could expect from some of the largest car insurance companies.

Company Average 6-month premium
Allstate $850
Farmers $668
Geico $599
Liberty Mutual $698
Nationwide $586
Progressive $639
State Farm $536
USAA $427

Frequently asked questions

What is the difference between liability and full coverage car insurance?

Liability insurance covers damage to property and will compensate others for damages you or someone driving your car causes. Liability coverage also pays for bills associated with death or injury to another person caused by you or someone driving your car. Full coverage car insurance, on the other hand, covers liability, damage to your car in a collision, bodily injury coverage and even pays for damage caused to your vehicle by weather, vandalism or a falling tree branch.

How do I get the best car insurance rates?

Shopping around and comparing car insurance rates from different companies will help you find the best rate. Look at both large and small companies and make sure to have your personal information, car type, credit score and driving record on hand to receive the most accurate quote.

How can I make my car insurance cheaper?

Being a safe and cautious driver with no recent accidents or tickets on your record can help lower your insurance and keep it low. Another way to make your car insurance cheaper would be to drop some of your coverage or raise your deductible, but make sure you know your state minimum requirements and the implications if you have basic insurance and cause a collision.

Source: Bankrate / Featured image by Jackson David – Unsplash

Joseph Tanner

You may also like

More in Insurance