The average annual cost of a full-coverage auto insurance policy in the United States is $2,390, according to financial data analytics firm ValuePenguin. Based on analysis of insurance rate data from Quadrant Information Services, ValuePenguin has published a list of the 12 cheapest car insurance companies across the country.
Erie has come out on top, with the lowest average annual rate of $1,521, which is approximately 46% cheaper than the national average across all 50 states and the District of Columbia. In the 12 states and Washington D.C. where Erie does business, the insurer is often the cheapest insurer for drivers. ValuePenguin found that drivers in Pennsylvania who choose Erie could save up to 32% compared to the state average.
In second spot is State Farm, with an average annual rate of $1,737. State Farm is the largest auto insurance company in the country, offering rates that beat the average in 46 states and D.C. State Farm’s mean is just lower than the average annual rate of $1,781 provided by Farm Bureau Mutual (IA Group), a regional insurer that offers coverage in eight Midwestern and Western states.
ValuePenguin’s data is based on online insurance quotes obtained via Quadrant Information Services for a sample driver. For the purpose of the exercise, the driver was a single 30-year-old man, who drove a 2015 Honda Civic EX and had a clean driving record. The only variable that changed was the ZIP code where he lived in the US.
The coverage quoted included: bodily liability (limit of $50,000 per person/$100,000 per accident); property damage (limit of $25,000 per accident); uninsured/underinsured motorist bodily injury (limit of $50,000 per person/$100,000 per accident); comprehensive and collision ($500 deductible); and personal injury protection (the minimum amount when required by the state).
Based on ValuePenguin’s analysis, the 12 major US auto insurance companies with the cheapest average annual rates are:
1. Erie
Average Annual Rate: $1,521
2. State Farm
Average Annual Rate: $1,737
3. Farm Bureau Mutual (IA Group)
Average Annual Rate: $1,781
4. American Family
Average Annual Rate: $2,041
5. Auto-Owners Insurance
Average Annual Rate: $2,112
6. GEICO
Average Annual Rate: $2,158
7. Nationwide
Average Annual Rate: $2,293
8. Progressive
Average Annual Rate: $2,393
9. Metropolitan
Average Annual Rate: $2,447
10. Travelers
Average Annual Rate: $3,017
11. Allstate
Average Annual Rate: $3,545
12. Farmers
Average Annual Rate: $4,280
NA. USAA *only provides insurance coverage to current and former military members and their families.
Average Annual Rate: $1,307
While price comparison can be a useful benchmark in personal auto insurance, it’s not the be-all and end-all. The depth and breadth of coverages alongside claims resolution and other value-added services are equally, if not more important than price. This is where the advocacy of the insurance agent really comes into play.
In addition to that, insurance companies are facing many challenges in auto lines right now. Issues like distracted driving, which is at an all-time high, and inflated vehicle repair costs due to increased in-vehicle technology are driving loss costs up, meaning insurers are having to pursue rate in order to break even on their auto insurance books. As a result, many drivers are seeing increases to their annual rate, and even the ‘cheapest’ options above seem expensive to many households.
