How to Choose the Best Car Insurance
The best auto insurance balances the protection you need with a premium you can sustain. Prices have climbed sharply—motor vehicle insurance rose about 20% year over year in 2024—so use every lever available: consider a telematics/usage‑based program, bundle policies, stack easy billing discounts (paperless, auto‑pay, pay‑in‑full), and shop at renewal (BLS), (Insurance Information Institute), (NAIC), (LexisNexis 2025), (J.D. Power 2025).
Use the following research‑based tips to match coverage to your situation in 2025 and identify reliable ways to lower costs without sacrificing essential protection.
Determine the amount of coverage you need
State minimums satisfy legal requirements but can leave major gaps after a serious crash. Many regulators and insurers suggest carrying higher liability limits—commonly 100/300/50 or more—and adding Uninsured/Underinsured Motorist (UM/UIM) where available. In no‑fault states, set Personal Injury Protection (PIP) to match your medical coverage and risk tolerance. Review your state’s framework and effective dates before choosing limits (AAA Digest of Motor Laws), (IIHS compulsory insurance).
Consider your state’s minimum requirements
Minimums vary by state and have changed in several places. Highlights with effective dates: California increased minimum liability to 30/60/15 on Jan. 1, 2025 (scheduled to rise again in 2035) (CA SB 1107); Virginia ended its uninsured motorist fee and now requires insurance with minimums of 50/100/25 effective Jan. 1, 2025 (Virginia Code), (AAA Virginia); New Jersey’s standard policies have been at least 25/50/25 since 2023, with a scheduled increase to 35/70/25 in 2026 (NJ Governor). Also note unique frameworks: Michigan’s no‑fault system with required PIP options, $1,000,000 Property Protection Insurance, and 50/100/10 residual liability minimums (Michigan DIFS); Florida’s no‑fault system requires $10,000 PIP and $10,000 Property Damage Liability; BI is not universally required (FLHSMV). For a current, state‑by‑state reference, use the IIHS tracker and the AAA Digest.
Look for discounts
Most insurers offer multiple savings opportunities: safe/claims‑free, good student, multi‑vehicle, bundling homeowners and car insurance with the same company, defensive driving, anti‑theft/safety equipment, low‑mileage and usage‑based/telematics, and billing discounts (paperless, auto‑pay, pay‑in‑full). Today, the largest advertised single lever is telematics/usage‑based insurance (UBI): State Farm Drive Safe & Save (up to 30%) details; Nationwide SmartRide (up to 40%) details; Liberty Mutual RightTrack (up to 30%) details; Travelers IntelliDrive (up to 30%) details; USAA SafePilot (up to 30%) details. Discount availability and amounts vary by state; verify during quoting (III), (NAIC).
Compare quotes
Request quotes from at least three providers and ensure limits/deductibles match for a true comparison. Given elevated premium levels, also price a telematics option to see if your driving behavior can unlock additional savings. Provide accurate information (drivers, mileage, prior claims/violations) so rates reflect your actual risk profile (NAIC), (BLS).
How much you drive
Mileage, commute length, driving times (late night vs. daytime), and driving style affect price. Quote tools typically ask for commute miles; accurate figures prevent overpaying. Low‑mileage drivers and consistently cautious drivers often benefit most from UBI programs, which are seeing rising participation as affordability pressures persist (III), (NAIC), (LexisNexis 2025), (J.D. Power 2025).
Factors that affect your auto insurance cost
State’s minimum requirements
States set minimum BI/PD liability (and sometimes UM/UIM and PIP). Higher required limits generally raise baseline premiums. Recent changes—California to 30/60/15 (2025) and Virginia to 50/100/25 (2025), with New Jersey’s scheduled step‑up in 2026—illustrate how updates can affect costs. Confirm your state’s current rules via the IIHS tracker and the AAA Digest, and consult state sources for specifics (CA), (VA), (NJ).
Financial situation
Your deductible is the part you pay before the insurer covers the rest of a covered claim. Lower deductibles increase premiums; higher deductibles reduce premiums but raise your out‑of‑pocket risk. Choose a deductible you can handle in an emergency and revisit it as your finances change (NAIC), (III).
Vehicle
Insurers price by each model’s loss history and repair costs. Small and sports cars typically show worse collision/injury losses; many midsize non‑luxury SUVs and minivans perform better than average. Luxury vehicles, large pickups/SUVs, and many EVs have higher repair severities due to expensive parts and ADAS/EV calibration needs. Theft risk—especially for popular full‑size pickups—raises comprehensive costs (IIHS/HLDI), (CCC Crash Course 2025), (NICB theft 2023), (NICB Hot Wheels 2024).
Driving record
At‑fault crashes, speeding, and major violations (like DUI) typically trigger surcharges, while a clean, claims‑free history earns lower rates at many carriers. Optional telematics programs can reward safe driving (and may penalize risky behavior where permitted); review program terms before enrolling (NAIC), (CCC Crash Course 2025).
How much coverage you need
More coverage and higher limits increase premiums, but they also offer stronger financial protection. Consider raising liability beyond state minimums (e.g., to 100/300/50 or higher) and adding UM/UIM or enhanced PIP where applicable if your assets or risk profile warrant it (AAA Digest), (NAIC).
Credit score
Many states allow credit‑based insurance scores because they are predictive of loss; where permitted, lower scores often correlate with higher premiums. Some states restrict or prohibit credit use, so the effect varies by location. Maintain good credit habits to help your rate where allowed (NAIC credit guide).
Location
Rates vary by state and ZIP based on crash/medical costs, theft, weather, litigation, and regulatory factors. NAIC’s latest state reports continue to show among the highest average auto expenditures in Louisiana, Florida, and Michigan, and among the lowest in Maine, Idaho, and Vermont. Elevated CPI readings in 2025 indicate premium pressure persisted nationally, with variation by state as approvals and loss trends differed (NAIC 2025 state reports), (BLS CPI 2025), (NOAA disasters context).
Marital Status
Where permitted, married drivers often pay less on average, and households insuring multiple vehicles can qualify for multi‑car/household discounts. Some states restrict or prohibit using marital status in auto pricing; for example, Michigan bans it by statute. Check your state DOI’s guidance for current rules (MCL 500.2111), (NAIC).
Gender
Whether gender can be used in auto pricing depends on state law. Some states prohibit it—California’s rating‑factor rules do not allow gender, and Michigan bans sex in auto rating by statute—while others permit it. Always verify current rules with your state regulator (CA 10 CCR § 2632.5), (MI statute), (NAIC).
Claims history
Insurers view prior claims as a predictor of future loss. Drivers with at‑fault claims typically face surcharges, while claims‑free drivers often qualify for lower rates or a claims‑free discount. Consider paying small losses out‑of‑pocket if it’s financially prudent and permitted by your policy to preserve your claims‑free status (NAIC).
Discounts
Stacking discounts can materially reduce your premium. Common options include bundling, multi‑vehicle, safe/claims‑free, good student, defensive driving, anti‑theft/safety equipment, low mileage, and paperless/auto‑pay/pay‑in‑full. The biggest single lever for many drivers in 2025 is telematics/UBI, which advertises the highest potential savings: Nationwide SmartRide (up to 40%), and several peers at up to 30%. Program availability and results vary; some programs adjust premiums up or down based on driving, so review terms before enrolling (III), (NAIC), (SmartRide), (Drive Safe & Save), (RightTrack), (IntelliDrive), (SafePilot), (LexisNexis 2025), (J.D. Power 2025).