Isn’t modern car insurance fantastic? It’s like having a mini-safety net for your vehicle compared to the old, complicated policies. Insurance, as a whole, has been getting better every year and – crucially – much cheaper, too. You no longer need to hand over wallet-wilting sums of cash for your annual policy. Shift your focus away from those usual car insurance big-hitters and you will find yourself a fantastic bargain, as there are some cracking budget car insurance policies to be found.
Yes, headline-grabbing policies such as those from State Farm, Geico, and Progressive are wonderful, but you no longer have to spend top dollar for a superb car insurance experience. Want to know more? Well, that’s where we come in. These are the very best budget car insurance policies you can get.
Every year, NerdWallet puts hundreds of car insurance policies to the test so you don’t have to, with the best coverage in the US. That means we can definitively tell you which budget car insurance is perfect for you. Take a look below and you will spot our regularly curated list of the best budget car insurance you can get, as well as a helpful budget car insurance buying guide.
How to Choose the Best Budget Car Insurance for You
Picking the perfect budget car insurance isn’t easy, and there are all sorts of factors to consider when making your purchase. Before you head to the checkout, you will want to make sure you have all the bases covered. To make your decision a bit easier, we’ve highlighted the main criteria you need to look out for.
Should I Buy a Policy Directly or Through an Agent?
Budget car insurance policies are, as you would expect, cheaper to buy directly than through an agent, with prices starting as low as $48 per month or so. As a result, if you have the cash, we recommend you buy one directly. You can then find the right policy from any company and switch your insurance when you want to upgrade. If you don’t have the cash, you will need to go for an agent deal, but these don’t tend to be great value for budget policies as you end up spending much more by the time your policy ends.
Which Car Insurance Coverage Do I Need?
With budget policies, there isn’t much choice when it comes to coverage. Bar one exception, every budget car insurance offers liability coverage. Rest assured, though: Liability coverage is easy to understand, whether you’re a first-time buyer or insurance veteran. Just check which liability limits the policy is offering as lower limits may no longer be sufficient in case of a major accident.
If comprehensive and collision coverage is more your thing, you only have one choice. Geico’s policy might begin to be showing its age, but it’s still on sale and remains an excellent budget insurance device.
What Should I Look for in a Car Insurance Policy?
While flagship policies are fitted with the best, biggest and highest coverage, you can still find budget car insurance with high-quality coverage. Cheap policies usually have a minimum liability limit of $25,000, but some slightly more expensive alternatives offer higher limits for better protection.
The majority of budget car insurance we recommend use liability coverage, which is more than good enough for the price you’re paying. However, we’re starting to see comprehensive and collision coverage crop up at the lower end of the scale as well, which provide even better protection. Read our full reviews if you want to know how good a policy’s coverage is.
Deductibles and Premiums
Budget policies aren’t equipped with low deductibles. But that’s not to say their premiums are high – far from it, with reasonably low premiums often making an appearance in affordable policies. To get an idea of what to expect from a policy’s premium, look at the deductible (the higher the deductible, the lower the premium) and how much coverage is inside (the more coverage, the higher the premium).
Deductible is crucial, and each policy’s deductible is different. When considering your next budget policy, keep an eye out for the policy’s deductible – the lower the number, the higher you can expect the premium to be. If you’re stuck, we’ve rounded up the lowest-deductible policies in one place.
How Much Coverage Do I Need?
It’s amazing how much coverage you can eat through with accidents, lawsuits, and medical bills. You will want at least $25,000 of liability coverage and look out for policies with higher limits, as you can add more coverage when your liability limit eventually fills up.
How We Test Budget Car Insurance
Budget car insurance is tested using a variety of in-house and publicly available benchmark methods. We test coverage and premium using the policy details, available from the insurance company’s website. Both of these details provide us with coverage and premium scores, which can be used to directly compare against other policies.
Coverage testing is performed using a comparison of the policy’s coverage against the state’s minimum requirements. This test provides us with figures for overall coverage accuracy, as well as maximum coverage and minimum coverage.
For premium, we set the policy’s deductible to a standardized amount, switch off all discounts, and calculate the annual premium. When the policy premium is calculated, we record the amount.
When testing a policy’s coverage, we always use a competitor policy for direct comparison while considering coverage in a variety of different scenarios, including low-risk and high-risk drivers. Depending on the coverage available, we may also capture comprehensive or collision coverage, as well as testing any available deductible and premium settings.
Best Budget Car Insurance You Can Get in 2023
1. Geico: Best Budget Policy Overall
Geico hit a rich vein of form with the first few of its budget policies to launch in the US, and its newest policy is no different. The Geico policy is far, far better than it has any right to be for a policy that costs this little and with upgrades across the board, it’s an even more tantalising option than ever before.
Yes, the policy we would recommend above all other wallet-friendly options on the market is the Geico policy. This budget policy is powered by a surprisingly comprehensive coverage, which in our tests provided protection that easily matched policies costing twice the price. Its liability coverage, which includes a massive $50,000 limit, is also remarkable for the price and the large deductible options are a delight, too.
You might expect to see these sorts of high-level specs in a flagship policy, so it’s a proper treat to see these features in a policy that costs a fraction of the price. The Geico policy is the very definition of a budget car insurance, setting the benchmark for affordable policies to come. At this price, you can’t do much better.
Key specs – Coverage: Liability, Uninsured Motorist, Medical Payments; Deductible: $500, $1,000, $2,000; Premium: $48 per month
2. State Farm: The Most Affordable Budget Policy
A $42 per month policy used to bring about negative connotations, but the State Farm policy is far better than its bargain price suggests. Running a specially tweaked version of coverage that caters to low-risk drivers, the State Farm policy exceeds all expectations for a policy so cheap. Despite the comparatively weak coverage (it only has $25,000 of liability limit), it runs surprisingly well and has
a bright future with a premium that isn’t half bad for the price.
Its sturdy policy materials and compact design should help it last the test of time and the coverage lasted long enough in our tests as well. It may be lacking when it comes to raw coverage limits, and there are far better alternatives if your buying budget can stretch beyond $42 per month, but when it comes down to sheer affordability, the State Farm policy is the undisputed champion.
Key specs – Coverage: Liability, Uninsured Motorist, Medical Payments; Deductible: $500; Premium: $42 per month.
Certainly, let’s continue:
3. Progressive: The Cheapest Comprehensive Coverage
It isn’t Progressive’s most up-to-date policy, but it remains a reliable choice. If your budget can’t quite stretch to a brand-new comprehensive policy, then Progressive, despite being a few years old in its current form, will still serve you well.
The Progressive policy’s coverage quality still holds up, as does its affordable premium. Likewise, the liability limit, while not quite a match for the latest insurance offerings, is still more than capable against a variety of potential accidents. If you were worried that you might be outdated on the coverage side of things, Progressive ensures you’re well-covered.
If you want comprehensive coverage on a budget, then Progressive is your best bet.
Key specs – Coverage: Comprehensive, Collision, Liability; Deductible: $500, $1,000; Premium: $55 per month.
4. Allstate: Best Budget Policy for Customer Service
At first glance, Allstate offers a fairly standard budget car insurance policy, with the kind of specifications you’d expect for this price. What sets Allstate apart from the sea of similarly priced insurance policies is its renowned customer service. Allstate ensures that policyholders have a smooth experience, from claims processing to general inquiries.
Best of all, engaging with Allstate’s customer service won’t increase your premium, ensuring you get top-tier service without breaking the bank.
Key specs – Coverage: Liability, Uninsured Motorist, Medical Payments; Deductible: $500; Premium: $50 per month.
5. Liberty Mutual: Best-Value for Additional Features
Liberty Mutual might be stretching the definition of a budget car insurance, but its idea of what constitutes affordable is packed with value. If you’re looking for a policy that offers additional features like accident forgiveness and rental car coverage, then Liberty Mutual is the way to go.
Despite being priced slightly higher than other policies on this list, Liberty Mutual offers a comprehensive package that’s hard to beat in terms of value.
Key specs – Coverage: Comprehensive, Collision, Liability, Accident Forgiveness, Rental Car; Deductible: $500, $1,000; Premium: $60 per month.
6. USAA: Best Budget Policy for Military Families
USAA isn’t just the best budget policy for military families; it’s tailored specifically for them. With exclusive discounts for service members and their families, USAA offers a unique blend of affordability and coverage.
While its coverage options are standard, the personalized service and understanding of military life make USAA stand out in the crowded insurance market.
Key specs – Coverage: Liability, Uninsured Motorist, Medical Payments; Deductible: $500; Premium: $45 per month.
7. Farmers: A Solid Choice for Multi-Car Households
Farmers Insurance offers one of the best discounts for households with multiple vehicles. If you’re looking to insure more than one car without spending a fortune, Farmers is a great choice.
With a solid coverage foundation and the potential for significant savings with multi-car discounts, Farmers provides a balance of value and protection.
Key specs – Coverage: Comprehensive, Collision, Liability; Deductible: $500, $1,000; Premium: $58 per month.
8. Nationwide: Best for Safe Drivers
Nationwide rewards safe drivers with significant discounts. If you have a clean driving record and are looking for a policy that recognizes and rewards your safe habits, Nationwide is the way to go.
With competitive rates and a focus on promoting safe driving, Nationwide stands out as a top choice for those who prioritize safety on the road.
Key specs – Coverage: Liability, Uninsured Motorist, Medical Payments; Deductible: $500; Premium: $52 per month.
This concludes the list of best budget car insurance policies for 2023. Remember to always compare policies and read the fine print before making a decision. Safe driving!
