Updated: April 15, 2025
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Car insurance protects you and your family against financial loss in a covered accident that causes bodily injuries or property damage.
The best car insurance is the highest coverage you can afford. A policy may include liability insurance, comprehensive and collision coverage, personal injury protection and uninsured/underinsured insurance.
Various factors affect the cost of car insurance — like your age, location, car model and driver profile — so comparing quotes from different providers can help you get the best and most affordable option.
Car insurance is a contract between you and the insurance company. You pay a monthly or yearly premium, and your insurer agrees to pay for losses from covered accidents when you file a claim. A claim is a formal request you make to your insurer for payment of covered losses.
The right coverage depends on your needs as a driver. Depending on your policy, your insurance may cover vehicle damage, medical expenses and property damage for you or others.
Accidents can happen anytime. Whether it's your fault or not, you need proper protection against possible expenses. Auto insurance covers these expenses. Your insurance type determines which costs your policy covers.
The main auto insurance coverages are:
States have different auto insurance laws. Most states require minimum car insurance. This coverage protects against possible financial loss if you cause a car accident. It includes bodily injury liability and property damage liability for the other party but doesn't cover damage to you or your vehicle.
Collision insurance covers damage to your vehicle when you're at fault in an accident with another car or object, such as a fence, tree or light pole. It also covers single-car accidents that involve a rollover.
Lenders often require this coverage for financed or leased vehicles.
Comprehensive insurance covers damage to your car from incidents you didn't cause, such as theft, fire, vandalism and hail.
For many drivers, minimum coverage isn't enough. Comprehensive and collision insurance provides financial protection for your vehicle.
Optional coverages can enhance your protection beyond standard policies. They offer added security against uninsured drivers, medical expenses and financial gaps if your car is totaled. Understanding these options helps you customize your policy to fit your needs.
Protects you if the other driver doesn't have enough insurance
Covers medical expenses for you and your passengers
Provides broader medical and lost wage coverage; required in no-fault states
Pays the difference between your car's actual cash value and loan balance if your vehicle is totaled
Each state sets its own minimum car insurance requirements, primarily for liability coverage. These typically include:
Minimum coverage provides only baseline protection. While it meets state laws, it doesn't determine how much coverage you should buy. A liability-only policy won't cover you and your vehicle if you have an accident.
For better financial protection, we recommend buying liability coverage at 100/300/100, plus comprehensive and collision coverage.
When explaining car insurance for beginners, it’s important to cover claims. A claim is a formal request a policyholder files with their insurer to seek compensation for a covered loss. The insurer reviews the claim, determines its validity and issues payment to the policyholder if approved.
Acting quickly and staying organized helps avoid delays and speeds up your payout. Keep important information ready, such as the accident report and photos of the damage.
Here are the steps to make a car insurance claim:
To help get your claim approved, gather evidence from the accident scene. Get the other driver's contact and insurance details. Call the police right after the accident to file a report. Take photos of the scene and damage. Try to get the names and contact information of any witnesses.
Check your auto insurance policy and learn your provider's filing process. Some insurers want you to call your agent directly. Others offer online claim portals or mobile apps where you can file and track your claim. After you decide how to reach out, contact your insurance company or agent.
Work with your claims adjuster, the person handling your claim. Get their contact information since they'll investigate the accident and review repair estimates and settlement options. Your adjuster will tell you if your claim is approved or denied.
Many factors affect your car insurance cost. One is your deductible — the amount you pay for damages when filing certain claims.
Not all coverage types have deductibles. Minimum coverage has no deductible.
Deductibles apply only to:
A higher deductible usually means a lower premium because you pay more out-of-pocket when filing a claim. A lower deductible means a higher premium because the insurance company pays more.
You can set different deductibles for different coverage types. For example, you might choose a $500 collision deductible and a $1,000 comprehensive deductible.
If you have a $500 deductible for collision coverage and your at-fault accident results in $5,000 of damage to your vehicle, you pay your deductible of $500, and your insurer pays $4,500. But if you have a $1,000 deductible, you pay that amount, and your insurer pays $4,000.
The national average cost of car insurance is $1,358 per year or $113 per month for full coverage. Your actual price will vary based on location, ZIP code, age, gender, credit history, driving record, claims history and coverage level.
Car insurance may seem expensive, but its protection exceeds what you pay. For example, the average three-year cost of insurance is $4,272. This could give you up to $100,000 in bodily injury liability coverage per person, $300,000 per accident and $100,000 in property damage liability per accident.
Check your state's average auto insurance rates in the table below.
| Alabama | $1,002 | $477 |
| Alaska | $1,122 | $518 |
| Arizona | $1,553 | $756 |
| Arkansas | $1,333 | $518 |
| California | $1,608 | $675 |
| Colorado | $1,487 | $646 |
| Connecticut | $1,961 | $1,023 |
| Delaware | $2,163 | $1,323 |
| District of Columbia | $1,685 | $845 |
| Florida | $2,211 | $1,018 |
| Georgia | $1,484 | $735 |
| Hawaii | $890 | $386 |
| Idaho | $861 | $414 |
| Illinois | $1,174 | $489 |
| Indiana | $877 | $400 |
| Iowa | $1,077 | $344 |
| Kansas | $1,389 | $559 |
| Kentucky | $1,297 | $578 |
| Louisiana | $2,333 | $832 |
| Maine | $961 | $459 |
| Maryland | $1,577 | $911 |
| Massachusetts | $1,193 | $499 |
| Michigan | $1,905 | $825 |
| Minnesota | $1,295 | $581 |
| Mississippi | $1,172 | $484 |
| Missouri | $1,491 | $658 |
| Montana | $1,183 | $437 |
| Nebraska | $1,244 | $506 |
| Nevada | $1,985 | $1,065 |
| New Hampshire | $781 | $391 |
| New Jersey | $1,943 | $1,109 |
| New Mexico | $1,217 | $526 |
| New York | $2,620 | $1,451 |
| North Carolina | $1,178 | $563 |
| North Dakota | $969 | $424 |
| Ohio | $828 | $359 |
| Oklahoma | $1,175 | $503 |
| Oregon | $1,386 | $794 |
| Pennsylvania | $1,350 | $467 |
| Rhode Island | $1,443 | $754 |
| South Carolina | $1,899 | $963 |
| South Dakota | $1,236 | $381 |
| Tennessee | $1,137 | $459 |
| Texas | $1,702 | $805 |
| Utah | $1,233 | $671 |
| Vermont | $832 | $324 |
| Virginia | $1,159 | $570 |
| Washington | $1,387 | $714 |
| West Virginia | $1,375 | $644 |
| Wisconsin | $1,094 | $434 |
| Wyoming | $908 | $266 |
Buying car insurance involves assessing your coverage needs, comparing quotes and choosing a policy that fits your budget and lifestyle. Follow these steps to get the right protection at the best price:
Determine the coverage you need based on your finances, vehicle type and driving habits. For new or financed cars, get full coverage (liability, collision and comprehensive). For older vehicles you own outright, minimum coverage may be enough.
Rates vary significantly between insurance providers, so quotes from at least three companies. Use online comparison tools or work with an independent agent to find the best deal.
Many insurers offer discounts for bundling policies, having a clean driving record or enrolling in a defensive driving course. Ask about discounts to lower your premium.
Read the fine print to understand what's covered and what's not. Some policies exclude certain damages, like floods or rental car coverage. Make sure the policy meets your specific needs. This will help you determine if you need additional coverage.
Once you’ve selected the right policy, make your first payment and receive your insurance card. Keep digital and physical copies as proof of coverage.
“Car insurance is competitive. Insurers want to grow their market share and win your business. Shop your policy by getting multiple quotes to compare costs and coverage.” — Mark Friedlander, Director, Corporate Communications, Insurance Information Institute
Before choosing an insurance company, decide what you want in an insurer. Most providers offer similar core coverages. Your choice will depend on how much you value cost versus service quality.
Some new drivers want policies that meet state requirements while saving on monthly bills. MoneyGeek gathered average rates to find the cheapest car insurance companies.
Others prefer companies offering a balance of value and service quality. We also created a guide ranking the best car insurance options.
MoneyGeek's car insurance calculator will give you a customized estimate of your auto insurance cost. It's free to use, requires no personal information and we won't send you any spam.
Rates updated:
Apr 18, 2025
| Insurance Carrier | MoneyGeek Score | Average Monthly Payment | |
|---|---|---|---|
| 1 |  Capital Insurance Group | 94 /of 100 | $87 |
| 2 |  GEICO | 82 /of 100 | $109 |
| 3 | 83 /of 100 | $118 | |
| 4 | 83 /of 100 | $129 | |
| 5 | 79 /of 100 | $133 | |
| 6 | 77 /of 100 | $151 |
Although MoneyGeek partners with some of the companies we recommend, our content is written and reviewed by an independent team of writers, editors and licensed agents. Learn more about our editorial policies and expert editorial team.
Car insurance rates and coverage options vary, so compare quotes and understand your policy. This guide explains car insurance basics, including how it works, what it covers and how to find the best coverage for your needs.
Understanding car insurance basics is key to finding the right coverage. This FAQ section answers common questions to help you confidently navigate policies, costs and coverage options.
Car insurance protects you financially by paying for car repairs you'd otherwise cover yourself. A full coverage policy also protects you from noncollision incidents like a tree falling on your car or hitting an animal.
Most states require car insurance, but minimum requirements vary. In New Hampshire, insurance isn’t mandatory, but you must prove you can pay for any damage you cause.
The amount of car insurance you need depends on your car’s value, local risks and state requirements. Rising vehicle costs make full coverage worthwhile for many cars, not just luxury ones. Full coverage is beneficial in high-risk areas. However, liability-only coverage can be a practical choice if you drive an affordable car with low upkeep costs and have a tight budget.
Most states require drivers to have insurance before leaving the dealership. If affordability is an issue, compare multiple companies for discounts or home-and-auto bundles to reduce costs. If you drive infrequently, consider pay-per-mile insurance.
MoneyGeek is a trusted source for auto insurance information because of its scientific approach to researching and developing fact-based content.
Our analysis includes data only from reputable sources. For this guide, we consulted the Insurance Information Institute, the leading online source for risk management and insurance information. It empowers consumers through education about insurance value for better financial decisions.
Mark Fitzpatrick, MoneyGeek's Head of Insurance and resident personal finance expert, developed this car insurance guide for beginners.
We follow a strict editorial policy to provide research-driven, unbiased recommendations on important financial topics.
Our team of writers, experts, reviewers and editors creates content through this process:
About Mark Fitzpatrick
Mark Fitzpatrick, a Licensed Property and Casualty Insurance Producer, is MoneyGeek's resident Personal Finance Expert. With over five years of experience analyzing the insurance market, he conducts original research and creates tailored content for all types of buyers. His insights have been featured in publications like CNBC, NBC News and Mashable.
Fitzpatrick holds a master’s degree in economics and international relations from Johns Hopkins University and a bachelor’s degree from Boston College. He's also a five-time Jeopardy champion!
Passionate about economics and insurance, he aims to promote transparency in financial topics and empower others to make confident money decisions.
